<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, 2005
                        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 22, 2005, COMPUTED BY REFERENCE TO THE NASDAQ
SMALLCAP MARKET CLOSING PRICE ON SUCH DATE, WAS $17,582,555.

THE NUMBER OF OUTSTANDING SHARES OF REGISTRANT'S COMMON STOCK AS OF AUGUST 22,
2005 WAS 7,450,235.

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 25, 2005

<PAGE>

                     UNITED AMERICAN HEALTHCARE CORPORATION

                                    FORM 10-K

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                       Page
<S>                                                                                    <C>
PART I
      Item 1.  Business.............................................................     1
      Item 2.  Properties...........................................................    12
      Item 3.  Legal Proceedings....................................................    12
      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................................................     25
      Item 9a. Controls and Procedures..............................................    25
      Item 9b. Other Information....................................................    25

PART III
      Item 10. Directors and Executive Officers of the Registrant...................    25
      Item 11. Executive Compensation...............................................    26
      Item 12. Security Ownership of Certain Beneficial Owners and Management.......    26
      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, 2005, there were 132,258
enrollees in UAHC Health Plan of Tennessee, Inc. (formally called OmniCare
Health Plan, Inc.) ("UAHC-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 UAHC-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, UAHC-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 following table shows the approximate number of UAHC-TN members serviced by
the Company as of August 1, 2005:

<TABLE>
<CAPTION>

      Medicaid               Non - Medicaid              Total
-----------------------    ---------------------   ---------------------
<S>                        <C>                     <C>
      118,724                    13,534                 132,258
</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,
                        ---------------------------------------------------------------------------
                                  2005                      2004                    2003
                        -------------------------  ---------------------   ------------------------
                                            (in thousands, except percentages)
<S>                     <C>               <C>      <C>             <C>     <C>               <C>
Revenues
UAHC-TN                 $     21,794      98.7%    $    21,921     99.3%   $     24,314      87%
OmniCare-MI*                       -         -               -        -           3,395      12%
</TABLE>

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

MANAGED PLANS

The Company has entered into a long-term management agreement, through a wholly
owned subsidiary of the Company, with UAHC-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 UAHC-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 UAHC-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                                    UAHC-TN            OmniCare-MI(1)
------------------------------------------------    ------------------      --------------
<S>                                                 <C>                     <C>
(1) Duration:
    (a) Effective dates:
         (i)   Commencement                            July 1, 1996         May 1, 1985
         (ii)  Expiration                              June 30, 2010        Nov. 1, 2002
    (b) Term extension:
         (i) Automatically renewable                Yes - 3 successive          N/A
                                                      5-year periods
         (ii) Terms of renewal/ continuation              5 years               N/A
         (iii) Next review period                     January 1, 2010           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

UAHC-TN. UAHC-TN was organized as a Tennessee corporation in October 1993, and
is headquartered in Memphis, Tennessee. The Company was active in the
development of UAHC-TN, and through the Company's wholly owned subsidiary,
United American of Tennessee, Inc., wholly owns UAHC-TN. UAHC-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. UAHC-TN's TennCare HMO contract
was executed in October 1996, retroactive to the date of licensure.

In November 1993, UAHC-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 UAHC-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.

UAHC-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 UAHC-TN members
disproportionately exceeded UAHC-TN's normal per member per month ("PMPM")
experience and adversely affected its earnings for and since that period.
UAHC-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 UAHC-TN. UAHC-TN entered into its
changed contract with TennCare effective July 1, 2001.

At June 30, 2001, UAHC-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, UAHC-TN received approval from TennCare
to expand its service area to western Tennessee and to withdraw from Davidson
County. Additionally, a significant competitor of UAHC-TN ceased doing business
in October 2001, and TennCare assigned approximately 40,000 of that plan's
members to UAHC-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 UAHC-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 successive contractual
amendments, TennCare extended the ASO reimbursement system applicable to
UAHC-TN, first through June 30, 2004, then through December 31, 2004, and then
through June 30, 2005.

UAHC-TN sought reimbursement from TennCare for exceptionally high medical
expenses incurred by new UAHC-TN enrollees in fiscal year 2002, including for
actuarially estimated claims incurred but not yet reported to UAHC-TN. In
response, TennCare amended its contract with UAHC-TN in September 2002,
retroactive to July 1, 2001 in some respects and to May 1, 2002 in other
respects. The amendment stated that UAHC-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 UAHC-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: UAHC-TN retroactively elected an
available risk option for the ten months from July 1, 2001 through April 30,
2002; TennCare retroactively agreed to reimburse UAHC-TN on a no-risk ASO basis
for medical services effective beginning May 1, 2002, and TennCare agreed to pay
UAHC-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
UAHC-TN in October 2002, TennCare further agreed to pay additional funds to
UAHC-TN if future certified actuarial data confirmed they were needed by UAHC-TN
to meet that requirement.

UAHC-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 and additional funds were not recorded in fiscal 2002
financial statements but have been recorded in subsequent fiscal years as fiscal
2002 claims are processed. For the year ended June 30, 2005, an additional $0.02
million of such medical claims were processed, and the same amount was
recognized as revenue by UAHC-TN.

UAHC-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 UAHC-TN's substantially increased enrollment from members TennCare
assigned to it from defunct other plans.

Through an amendment with an effective date of July 1, 2005, TennCare has
implemented a modified risk arrangement with all its contracted MCOs, including
UAHC-TN, which are at risk for losing up to 10% of administrative fee revenue
and may receive up to 15% incentive bonus revenue based on performance relative
to benchmarks. TennCare has also announced plans to disenroll non-medically
needy adults who are not eligible for Medicaid from TennCare coverage statewide,
and to impose benefit limits on the 396,000 adults left in the program who are
eligible

                                       6
<PAGE>

for Medicaid. The announced plans would preserve full coverage for the 612,000
children on the program. As a result, UAHC-TN expects to lose only approximately
12,000 of its present 132,258 members over a 12-month period beginning in the
first quarter of fiscal year 2006, being its only working uninsured and
uninsurable adult members.

As of August 1, 2005, UAHC-TN's total enrollment was 132,258 members, of whom
90% were Medicaid enrollees and 10% were Non-Medicaid enrollees.

MANAGED PLAN PREVIOUSLY 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.

As a Michigan HMO, OmniCare-MI was 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.

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.

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

                                       7
<PAGE>

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 UAHC-TN will be granted the necessary approvals for new products
or will maintain federal qualifications or state licensure.

The licensing and operation of UAHC-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. UAHC-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.

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, UAHC-TN has (and OmniCare-MI while managed by the Company had)
professional liability insurance that covers liability claims arising from
medical malpractice. UAHC-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

                                       8
<PAGE>

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
UAHC-TN and, therefore, the revenues of the Company. UAHC-TN's primary market
competitors in western Tennessee are TLC, Better Health Plans and TennCare
Select. UAHC-TN primarily competes on the basis of enrollment, provider networks
and other related plan features and criteria. Management believes that UAHC-TN
is able to compete effectively with its primary market competitors.

                                       9
<PAGE>

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, 2005 was 106 compared to 119 at
August 1, 2004. The Company's employees do not belong to a collective bargaining
unit and management considers its relations with employees to be good.

                                       10
<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.

                                       11
<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 obtain satisfactory bank loan credit arrangements, if
            needed.

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

ITEM 2. PROPERTIES

The Company currently leases approximately 30,000 aggregate square feet from
which it conducts its operations in Michigan and Tennessee. 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 May 27, 2005 and June 16, 2005, complaints were filed in two similar lawsuits
against the Company and certain of its present and past officers in the United
States District Court for the Eastern District of Michigan. The plaintiffs in
the two respective cases are Gregory Zaluski and William Coleman, each on behalf
of himself and all others similarly situated. Both complaints allege that in the
period from May 26, 2000 through April 22, 2005, the Company made materially
false and misleading statements in violation of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder, with the alleged result of
artificially inflating the market price of the Company's stock during that
period. Both complaints allege that as a direct result of facts publicly
disclosed by the Company in April 2005, the Company's stock price dropped by
about $3.39. Each plaintiff claims to represent a class consisting of others
similarly situated, namely, those who purchased the Company's stock during the
specified period. The plaintiffs are seeking to recover damages on behalf of
themselves and the class, and any other relief the court may grant. The
plaintiffs, intending to have the two cases consolidated, have agreed that the
Company need not respond to the complaints until the court appoints lead
plaintiffs and lead counsel and until such lead plaintiffs file a consolidated
amended complaint.

In a lawsuit described in our Form 8-K Report of February 7, 2005, Provider
Creditors Committee on behalf of Michigan Health Maintenance Organizations
Plans, Inc. v. United American Health Care Corporation and others, the
plaintiffs have filed a second amended complaint still seeking damages in excess
of $62 million from the Company and other defendants based on allegations that
the Company breached its management agreement with OmniCare Health Plan in
Michigan ("OmniCare-MI") and that the Company's actions as the management
company of OmniCare-MI resulted in such alleged damages. The Company on

                                       12
<PAGE>

July 15, 2005, filed an answer and affirmative defenses and a motion for partial
summary disposition seeking dismissal of numerous counts. The Company intends to
vigorously defend the lawsuit.

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 are traded on the Nasdaq SmallCap Market
under the trading symbol "UAHC".

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

<TABLE>
<CAPTION>
                            2005 SALES PRICE                    2004 SALES PRICE
                   ---------------------------------    ------------------------------------
FISCAL QUARTER           HIGH             LOW                HIGH                LOW
--------------     ---------------   ---------------    ----------------   -----------------
<S>                <C>               <C>                <C>                <C>
First                    $5.63            $3.52              $3.25              $1.52
Second                   $7.89            $3.97              $4.15              $2.57
Third                    $6.58            $5.21              $5.32              $3.33
Fourth                   $5.83            $1.56              $6.44              $3.70
</TABLE>

As of August 22, 2005, the closing price of the Common Stock was $2.36 per share
and there were approximately 119 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>
                                             2005            2004            2003            2002            2001
                                         ------------    ------------    ------------    ------------    ------------
                                                            (in thousands, except per share data)
<S>                                      <C>             <C>             <C>             <C>             <C>
Operating Data (Year ended June 30):
Operating revenues                       $     22,079    $     22,084    $     24,530    $    165,176    $    105,330
Earnings (loss) from continuing
  operations                                    5,474           7,871           7,333          (9,259)          4,562
Loss from discontinued operation, net
  of income taxes                                (129)           (700)         (2,127)         (1,704)         (3,333)
Net earnings (loss)                             5,345           7,171           5,206         (10,963)          1,229
Earnings (loss) per common share from
  continuing operations - basic          $       0.74    $       1.09    $       1.06    $      (1.35)   $       0.67
Net earnings (loss) per common share -
  basic                                  $       0.72    $       0.99    $       0.75    $      (1.60)   $       0.18
Net earnings (loss) per common share -
  diluted                                $       0.69    $       0.99    $       0.75    $      (1.60)   $       0.18
Weighted average common shares
  outstanding - diluted                         7,674           7,266           6,950           6,839           6,808

Balance Sheet Data (June 30):
Cash and investments                     $     13,573    $      8,767    $      4,693    $     18,810    $     24,766
Goodwill                                        3,452           3,452           2,952           2,952           2,952
Total assets                                   24,235          20,081          15,114          33,336          41,657
Medical claims and benefits payable               172             406             591          24,495          19,815
Debt                                                -             847           1,766           2,869           3,492
Shareholders' equity                           20,483          14,885           7,140           1,747          12,313
                                         ------------    ------------    ------------    ------------    ------------
</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

                                       14
<PAGE>

November 1, 2002) Michigan, with a targeted mix of Medicaid and commercial
enrollment. 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 UAHC Health Plan, Inc. (formerly
called OmniCare Health Plan, Inc.) ("UAHC-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 UAHC-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 successive contractual
amendments, TennCare extended the ASO reimbursement system applicable to UAHC-TN
first through June 30, 2004, then through December 31, 2004, and then through
June 30, 2005. These matters are more fully discussed and analyzed below under
the heading "Review of Consolidated Results of Operations - 2005 Compared to
2004."

      REVIEW OF CONSOLIDATED RESULTS OF OPERATIONS - 2005 COMPARED TO 2004

UAHC-TN DEVELOPMENTS

UAHC-TN's results of operations for fiscal 2004 and 2005 are best understood in
the context of certain earlier events involving several of TennCare's major
contracted MCOs, which ceased doing business in fiscal 2002. Beginning in
February, March and April 2002, UAHC-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 UAHC-TN from failed MCOs also had medical costs in excess of
UAHC-TN's premiums received. Beginning in April 2002, UAHC-TN wrote to TennCare
seeking risk adjustments and reimbursements to compensate UAHC-TN for such
medical expenses, including for actuarially estimated claims incurred but not
yet reported to UAHC-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 UAHC-TN - have no medical cost risk

                                       15
<PAGE>

(i.e., no risk for medical losses), earn fixed administrative fees and are
subject to increased oversight. Through successive contractual amendments,
TennCare extended the ASO reimbursement system applicable to UAHC-TN, first
through June 30, 2004, then through December 31, 2004, and then through June 30,
2005. Through an amendment with an effective date of July 1, 2005, TennCare has
implemented a modified risk arrangement with all its contracted MCOs, including
UAHC-TN, which are at risk for losing up to 10% of administrative fee revenue
and may receive up to 15% incentive bonus revenue based on performance relative
to benchmarks. TennCare has also announced plans to disenroll non-medically
needy adults who are not eligible for Medicaid from TennCare coverage statewide,
and to impose benefit limits on the 396,000 adults left in the program who are
eligible for Medicaid. The announced plans would preserve full coverage for the
612,000 children on the program. As a result, UAHC-TN expects to lose only
approximately 12,000 of its present 132,258 members over a 12-month period
beginning in the first quarter of fiscal year 2006, being its only working
uninsured and uninsurable adult members.

Pursuant to a Notice of Administrative Supervision issued by the Commissioner of
the State of Tennessee's Department of Commerce and Insurance on April 20, 2005,
to our subsidiary, UAHC-TN was placed under administrative supervision of the
Commissioner and "has until December 31, 2005 to demonstrate to the
Commissioner's satisfaction" that its "continued operation and business, absent
the supervision or other oversight by the Commissioner, is not hazardous,
financially or operationally, to its enrollees, its creditors or the public."

UAHC-TN received no prior notice of the notice and order of administrative
supervision and had no opportunity to respond to its factual assertions. UAHC-TN
and the Company are fully cooperating with the State of Tennessee in accordance
with the terms of the order, and we do not currently anticipate any material
developments during the supervision period.

The administrative supervision order prohibits UAHC-TN from taking certain
actions, including making any payments, without the approval of the
Commissioner's appointed Administrative Supervisor during the supervision. It is
important to recognize that administrative supervision is significantly
different than receivership and that UAHC-TN is not in receivership.

The administrative supervision notice asserted a number of findings of fact,
which the Commissioner stated formed the basis for her order. UAHC-TN and the
Company do not agree with many of those findings. The notice also asserted that
its findings of fact described potential grounds for termination of UAHC-TN's
TennCare contract. Although we acknowledge that any such termination would have
a material adverse effect on UAHC-TN and the Company, we do not agree that those
findings are accurate. Moreover, the State of Tennessee in August 2005 extended
UAHC-TN's TennCare contract through June 30, 2006, by an amendment to the
contract effective as of July 1, 2005.

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 UAHC-TN, purchased the remaining 25% of the
outstanding common stock of UAHC-

                                       16
<PAGE>

TN. UAHC-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 that was paid by December 31, 2004.

As of June 30, 2005, UAHC-TN's total enrollment was 131,247 members, compared to
129,484 at June 30, 2004.

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 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

                                       17
<PAGE>

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, the
sale of assets did not occur and the Company accordingly recorded a loss from
discontinued operations of $0.7 million in the fourth quarter of fiscal year
2004. The Company renegotiated sublease terms with Michigan HMO (formerly doing
business as OmniCare Health Plan in Michigan), which continued to occupy and pay
rent for reduced space in such premises. Michigan HMO's occupancy and rent
obligation for the subleased premises ceased on February 28, 2005 sooner than
the primary lease end in May 2005. The Company recorded a liability in the first
quarter of fiscal year 2005 as it relates to the sublease obligation.

SPECIFIC COMPARISONS OF 2005 TO 2004

Total revenues were $22.1 million for the fiscal year ended June 30, 2005
compared to $22.1 million for the fiscal year ended June 30, 2004, practically
unchanged year-over-year.

Medical premiums revenues were $0.02 million for the fiscal year ended June 30,
2005, a decrease of $0.5 million (96%) from medical premiums revenues of $0.5
million for the fiscal year ended June 30, 2004. The decrease came from UAHC-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 June 30, 2005.

Fixed administrative fees related to the ASO program were $20.9 million for the
fiscal year ended June 30, 2005, an increase of $0.5 million (3%) from fixed
administrative fees of $20.4 million for the fiscal year ended June 30, 2004.
The increase in fixed administrative fees is principally due to a slight
increase in members of UAHC-TN.

Total expenses were $16.0 million for the fiscal year ended June 30, 2005,
compared to $15.3 million for the fiscal year ended June 30, 2004, an increase
of $0.7 million (4%). The increase was principally due to an increase in costs
associated with the Administrative Supervision Order for UAHC-TN discussed
above, and an increase in claims processing costs.

Because of TennCare's ASO reimbursement system, medical services expenses were
$0.02 million in the fiscal year ended June 30, 2005, a decrease of $0.5 million
(96%), as compared with medical services expenses of $0.5 million in the fiscal
year ended June 30, 2004. The $0.02 million of medical services expenses
represent fiscal 2002 claims processed and reimbursed by TennCare in fiscal 2005
as explained in item 1 under the heading "Managed Plans - Managed Plan Owned by
the Company."

Marketing, general and administrative expenses were $15.7 million for the fiscal
year ended June 30, 2005, as compared with marketing, general and administrative
expenses of $14.5 million for the comparable period a year earlier, a increase
of $1.2 million (9%). The increase was principally due to an increase in costs
associated with the administrative supervision order for UAHC-TN discussed
above, and an increase in claims processing costs.

                                       18
<PAGE>

Depreciation and amortization expense decreased $0.2 million (22%), to $0.05
million for the fiscal year ended June 30, 2005 from $0.23 million for the
fiscal year ended June 30, 2004.

Interest expense decreased $0.06 million (88%), to $0.06 million for the fiscal
year ended June 30, 2005 from $0.07 million for the fiscal year ended June 30,
2004, principally due to debt reduction.

Earnings from continuing operations before income taxes were $6.1 million and
$6.8 million for the fiscal years ended June 30, 2005 and 2004, respectively.
Such decrease in earnings from continuing operations of $0.7 million, or $0.08
per basic share, is principally due to an increase in marketing, general and
administrative expenses.

Income tax expense increased $1.8 million (160%), to $0.7 million for the fiscal
year ended June 30, 2005 from $(1.1) million for the fiscal year ended June 30,
2004. The Company's effective tax rate for the fiscal year ended June 30, 2005
is 11% and differs from the statutory rate of 34%. This difference is the result
of the utilization of net operating loss carryforwards for which a valuation
allowance had previously been applied.

The Company recognized a loss of $0.1 million from discontinued operations for
the fiscal year ended June 30, 2005, principally due to a liability relating to
a sublease as described above, partially offset by the release of certain
liabilities related to a patient care software system no longer in use by the
Company. For the fiscal year ended June 30, 2004, the Company recognized a loss
from discontinued operations of $0.7 million. The charges for discontinued
operations are 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 $5.3 million, or $0.72 per basic share, for the fiscal year
ended June 30, 2005, compared to net earnings of $7.2 million, or $0.99 per
basic share, for the fiscal year ended June 30, 2004, an decrease of $1.9
million (23%). Such decrease in net earnings is principally due to an increase
in marketing, general and administrative expenses and a higher effective tax
rate for the period.

           REVIEW OF CONSOLIDATED RESULTS OF OPERATIONS - 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 UAHC-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 June 30, 2005.

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

                                       19
<PAGE>

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
UAHC-TN discussed above.

Because of TennCare's 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 above.

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.

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 $0.6
million, or $0.03 per basic share, is principally due to the recognition of a
deferred tax asset, an increase in members of UAHC-TN and an increase in
reimbursement rates effective July 1, 2003.

                                       20
<PAGE>

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.

                         LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2005, the Company had (i) cash and cash equivalents and short-term
marketable securities of $13.5 million, compared to $8.8 million at June 30,
2004; (ii) working capital of $13.7 million, compared to working capital of $8.1
million at June 30, 2004; and (iii) a current assets-to-current liabilities
ratio of 4.70-to-1, compared to 2.56-to-1 at June 30, 2004.

Net cash from operating activities was $5.6 million in fiscal 2005 compared to
net cash from operating activities of $5.0 million in fiscal 2004. Investing
activities in fiscal 2005 included the purchase of marketable securities of $2.8
million. Debt repayments were $0.8 million in fiscal 2005.

Cash and marketable securities increased by $4.8 million at June 30, 2005
compared to June 30, 2004 due primarily to operating activities.

Accounts receivable decreased by $0.1 million at June 30, 2005 compared to June
30, 2004, primarily due to third-party liability recovery program reimbursements
due from TennCare.

Property, plant and equipment decreased by $0.1 million at June 30, 2005
compared to June 30, 2004, due to the recording of depreciation of $0.2 million.

Medical claims payable decreased by $0.2 million at June 30, 2005 compared to
June 30, 2004, which is directly related to the payment of outstanding medical
claims.

The Company's wholly owned subsidiary, UAHC-TN, had a required minimum net worth
requirement using statutory accounting practices of $7.6 million at June 30,
2005. UAHC-TN had excess statutory net worth of $5.5 million at June 30, 2005.

UAHC-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 UAHC-TN's substantially increased enrollment from members TennCare
assigned from defunct other plans, together with adapting to TennCare's
stabilization program.

                                       21
<PAGE>

Beginning July 1, 2002, TennCare implemented an 18-month stabilization program,
which entailed changes to TennCare's contracts with MCOs, including UAHC-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 successive contractual
amendments, TennCare extended the ASO reimbursement system applicable to
UAHC-TN, first through June 30, 2004, then through December 31, 2004, and then
through June 30, 2005. Through an amendment with an effective date of July 1,
2005, TennCare has implemented a modified risk arrangement with all its
contracted MCOs, including UAHC-TN, which are at risk for losing up to 10% of
administrative fee revenue and may receive up to 15% incentive bonus revenue
based on performance relative to benchmarks. TennCare has also announced plans
to disenroll non-medically needy adults who are not eligible for Medicaid from
TennCare coverage statewide, and to impose benefit limits on the 396,000 adults
left in the program who are eligible for Medicaid. The announced plans would
preserve full coverage for the 612,000 children on the program. As a result,
UAHC-TN expects to lose only approximately 12,000 of its present 132,258 members
over a 12-month period beginning in the first quarter of fiscal year 2006, being
its only working uninsured and uninsurable adult members.

The Company and the Department of Finance and Administration of the State of
Tennessee, Bureau of TennCare ("TennCare") are parties to two escrow agreements
under which the Company has funded, on August 5, 2005, two escrow accounts held
by TennCare at the State Treasury. One, in the amount of $2,300,000, is security
for repayment to TennCare of any overpayments to UAHC-TN that may be determined
by a pending audit of all UAHC-TN process claims since 2002; and the other, in
the amount of $420,500, is security for any money damages that may be awarded to
TennCare in the event of any future litigation between the parties in connection
with certain pending investigations by state and federal authorities. The escrow
accounts bear interest at a rate no lower than the prevailing commercial
interest rates for savings accounts at financial institutions in Nashville,
Tennessee. The escrow accounts will terminate August 5, 2007 or sooner in
certain events, except if litigation is pursued by either party, in which event
the escrow accounts will continue until the end of such litigation. All amounts
(including interest earnings) credited to the escrow accounts will belong to the
Company, except to the extent, if any, they are paid to TennCare to satisfy
amounts determined to be owed to TennCare as provided in the escrow agreements.
Both escrow agreements recite that TennCare does not at this time assert there
has been any breach of UAHC-TN's TennCare contract and that the Company has
funded the escrow accounts as a show of goodwill and good faith in working with
TennCare.

Pursuant to a Notice of Administrative Supervision issued by the Commissioner of
the State of Tennessee's Department of Commerce and Insurance on April 20, 2005,
to our subsidiary, UAHC-TN was placed under administrative supervision of the
Commissioner and "has until December 31, 2005 to demonstrate to the
Commissioner's satisfaction" that its "continued operation and business, absent
the supervision or other oversight by the Commissioner, is not hazardous,
financially or operationally, to its enrollees, its creditors or the public."

                                       22
<PAGE>

UAHC-TN received no prior notice of the notice and order of administrative
supervision and had no opportunity to respond to its factual assertions. UAHC-TN
and the Company are fully cooperating with the State of Tennessee in accordance
with the terms of the order, and we do not currently anticipate any material
developments during the supervision period.

The administrative supervision order prohibits UAHC-TN from taking certain
actions, including making any payments, without the approval of the
Commissioner's appointed Administrative Supervisor during the supervision. It is
important to recognize that administrative supervision is significantly
different than receivership and that UAHC-TN is not in receivership.

The administrative supervision notice asserted a number of findings of fact
which the Commissioner stated formed the basis for her order. UAHC-TN and the
Company do not agree with many of those findings. The notice also asserted that
its findings of fact described potential grounds for termination of UAHC-TN's
TennCare contract. Although we acknowledge that any such termination would have
a material adverse effect on UAHC-TN and the Company, we do not agree that those
findings are accurate. Moreover, the State of Tennessee in August 2005 extended
UAHC-TN's TennCare contract through June 30, 2006, by an amendment to the
contract effective as of July 1, 2005.

The Company's de facto sublease to OmniCare-MI of the Company's leased premises
in Detroit, Michigan, from November 1, 2002 to the end of the lease in May 2005
cost the Company approximately $40,000 per month through November 2004. Due to
the subsequent sale of OmniCare-MI members to Coventry of Michigan approved on
May 10, 2004 and effective October 1, 2004, the sale of assets did not occur and
the Company accordingly recorded a loss from discontinued operations of $0.7
million in the fourth quarter of fiscal year 2004. The Company renegotiated
sublease terms with Michigan HMO (formerly doing business as OmniCare Health
Plan in Michigan), which continued to occupy and pay rent for reduced space in
such premises. Michigan HMO's occupancy and rent obligation for the subleased
premises ceased on February 28, 2005 sooner than the primary lease end in May
2005. The Company recorded a liability in the first quarter of fiscal year 2005
as it relates to the sublease obligation. Those events would increase the
Company's rent expense under that lease, but management cannot currently predict
the timing and amount thereof.

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 new modified risk arrangement for
the TennCare program beginning July 1, 2005 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, and maintain
minimum statutory net worth requirements of UAHC-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. 123(R), "Share-Based Payment", which is a replacement to SFAS No. 123
"Accounting for Stock Based Compensation" and supersedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees", was issued in December 2004. The
revisions are intended to provide investors and other users of financial
statements with more complete and neutral financial information by requiring
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. SFAS No. 123(R) covers a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. SFAS No. 123, as originally issued in 1995,
established a preferable fair-value-based method of accounting for share-based
payment transactions with employees. However, that Statement permitted entities
the option of continuing to apply the guidance in APB Opinion No. 25, as long as
the footnotes to financial statements disclosed what net income would have been
had the preferable fair-value-based method been used. Publicly traded entities
(other than those filing as small business issuers) will be required to apply
SFAS No. 123(R) as of the first annual reporting period that begins after June
15, 2005. The Company is currently evaluating the financial statement impact of
the adoption of SFAS No. 123(R).

SFAS No. 151, "Inventory Costs," which amends ARB No. 43 Chapter 4, "Inventory
Pricing," was issued in November 2004. The amendments made by SFAS No. 151
provide clarity relating to abnormal amounts of idle facility expense, freight,
handling costs, and wasted materials (spoilage), which should be recognized as
current-period charges and require the allocation of fixed production overheads
to inventory based on the normal capacity of the production facilities. The
guidance is effective for inventory costs incurred during fiscal years beginning
after June 15, 2005. The adoption of this standard is expected to have no effect
on the Company's financial condition or results of operations.

SFAS No. 154, "Accounting Changes and Error Corrections - replacement of APB
Opinion No. 20 and FASB Statement No. 3," (SFAS No. 154) was issued in May 2005.
SFAS No. 154 changes the accounting for and reporting of a change in accounting
principle by requiring retrospective application to prior periods' financial
statements of changes in accounting principle unless impracticable. SFAS No. 154
is effective for accounting changes made in fiscal years beginning after
December 15, 2005. We do not expect the adoption of SFAS No. 154 to have a
material impact on our results of operations, financial position or cash flows.

ITEM 8. FINANCIAL STATEMENTS

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

                                       24
<PAGE>

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

None.

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.

ITEM 9B. OTHER INFORMATION

On August 23, 2005, Peter F. Hurst, Jr. resigned as our Director.

                                    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 4, 2005.

                                       25
<PAGE>

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 4, 2005.

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 4, 2005.

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 4, 2005.

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 4, 2005 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

                                       26
<PAGE>

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,
December 31, 2002, and March 31, 2005; (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, April 15, 2003, November 22, 2004, January 11, 2005, February 7,
2005, April 21, 2005, and April 28, 2005; or (vi) the Company's Form 8-K/A
reports filed with the Commission July 21, 1993, November 12, 1997, March 10,
2003, and April 22, 2005. 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 November 22,
                  2004, reporting that on November 19, 2004, the partners of
                  Follmer Rudzewicz PLC notified the Company that they were
                  joining UHY LLP, a newly-formed New York limited liability
                  partnership, effective as of August 1, 2004. UHY LLP is a
                  legal entity that is separate from Follmer Rudzewicz PLC, and
                  thus, on November 22, 2004, the Company engaged UHY LLP as the
                  Company's new independent public accountant to audit the
                  Company's financial statements, effective immediately.

            2)    The Company filed a Current Report on Form 8-K on December 15,
                  2004, reporting the extension of the ASO reimbursement system
                  for UAHC-TN through December 31, 2005.

            3)    The Company filed a Current Report on Form 8-K on January 11,
                  2005, reporting the establishment of the United American
                  Healthcare Corporation Supplemental Executive Retirement Plan
                  (SERP)

            4)    The Company filed a Current Report on Form 8-K on February 7,
                  2005, reporting the filing of a lawsuit against the Company
                  and others by the Provider Creditors Committee of OmniCare-MI.

            5)    The Company filed a Current Report on Form 8-K on March 22,
                  2005, reporting the change of address and name change of
                  UAHC-TN and the filing of a lawsuit against the Company and
                  its subsidiaries by a former employee of UAHC-TN, Felecia
                  Corbin-Johnson.

            6)    The Company filed a Current Report on Form 8-K on April 15,
                  2005, reporting the departure of Osbie Howard, as a director
                  and principal officer, his severance agreement, the
                  appointment of Stephanie Dowell as a principal officer, and
                  the Company's press release which announced such departure and
                  appointment and that the Company had notified officials of the
                  Tennessee Department of Finance and Administration of a prior
                  business relationship with Tennessee State Senator John Ford.

                                       27
<PAGE>

            7)    The Company filed a Current Report on Form 8-K on April 21,
                  2005, reporting on a Notice of Administrative Supervision to
                  UAHC-TN from the Commissioner of the State of Tennessee's
                  Department of Commerce and Insurance and the Company's related
                  press release.

            8)    The Company filed a Current Report on Form 8-KA at 6:00am on
                  April 22, 2005, as Amendment No. 1 to the Form 8-K described
                  in 7) above, to file a copy of the Notice of Administrative
                  Supervision as an exhibit.

            9)    The Company filed a Current Report on Form 8-K/A at 6:00am on
                  April 22, 2005, as Amendment No. 2 to the Form 8-K described
                  in 7) above, to supply an inadvertently omitted word.

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.

                                       28
<PAGE>

UNITED AMERICAN HEALTHCARE CORPORATION (REGISTRANT)

SIGNATURE                                      CAPACITY
---------                                      --------

/s/ WILLIAM C. BROOKS                          Chairman, President and CEO
-----------------------------                  (Principal Executive Officer)
William C. Brooks

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

/s/ STEPHANIE M. DOWELL                        President and CEO, UAHC-TN
-----------------------------
Stephanie M. Dowell

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

/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.

Date: August 25, 2005

                                       29
<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, 2005 and 2004....................................................   F-4

Consolidated Statements of Operations for each of the years in the three-year period
     ended June 30, 2005....................................................................................   F-5

Consolidated Statements of Shareholders' Equity and Comprehensive Income for
     each of the years in the three-year period ended June 30, 2005.........................................   F-6

Consolidated Statements of Cash Flows for each of the years in the three-year period
    ended June 30, 2005.....................................................................................   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 sheet of United American
Healthcare Corporation and Subsidiaries as of June 30, 2005, and the related
consolidated statement of operations, shareholders' equity and comprehensive
income, and cash flows for the year 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 audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the 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 financial position of United American
Healthcare Corporation and Subsidiaries as of June 30, 2005, and the results of
their operations and their cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.

/s/ UHY LLP

Southfield, Michigan
August 11, 2005

                                      F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
United American Healthcare Corporation:

We have audited the accompanying consolidated balance sheet of United American
Healthcare Corporation and Subsidiaries as of June 30, 2004, and the related
consolidated statements of operations, shareholders' equity and comprehensive
income, and cash flows for each of the two years in the period ended June 30,
2004. 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 the results of
their operations and their cash flows for each of the two years in the period
ended June 30, 2004, in conformity with accounting principles generally accepted
in the United States of America.

/s/ Follmer Rudzewicz PLC

Southfield, Michigan
August 5, 2004

                                      F-3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                         JUNE 30,
                                                                                --------------------------
                                                                                   2005            2004
                                                                                ----------      ----------
<S>                                                                             <C>             <C>
ASSETS
Current assets
    Cash and cash equivalents                                                    $  9,843        $  7,767
    Marketable securities                                                           3,730           1,000
    Accounts receivable - State of Tennessee                                        1,360           1,230
    Other receivables                                                                 583           1,206
    Prepaid expenses and other                                                        172             147
    Deferred income taxes                                                           1,950           1,939
                                                                                 --------        --------
       Total current assets                                                        17,638          13,289

Assets held for sale                                                                    -             100
Property and equipment, net                                                           179             323
Goodwill                                                                            3,452           3,452
Marketable securities                                                               2,380           2,331
Other assets                                                                          586             586
                                                                                 --------        --------
                                                                                 $ 24,235        $ 20,081
                                                                                 ========        ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
    Current portion of debt                                                      $      -        $    847
    Medical claims payable                                                            172             406
    Accounts payable and accrued expenses                                           1,096           1,140
    Accrued compensation and related benefits                                         711             582
    Accrued rent                                                                      235             837
    Other current liabilities                                                       1,538           1,384
                                                                                 --------        --------
       Total current liabilities                                                    3,752           5,196

                                                                                 --------        --------
Total liabilities                                                                   3,752           5,196

Shareholders' equity
    Preferred stock, 5,000,000 shares authorized; none issued                           -               -
    Common stock, no par, 15,000,000 shares authorized; 7,450,235 and
      7,418,519 shares issued and outstanding at June 30, 2005 and 2004,
      respectively                                                                 12,476          12,226
    Retained earnings                                                               8,047           2,702
    Accumulated other comprehensive (loss), net of deferred federal income
      taxes                                                                           (40)            (43)
                                                                                 --------        --------
Total shareholders' equity                                                         20,483          14,885
                                                                                 --------        --------
                                                                                 $ 24,235        $ 20,081
                                                                                 ========        ========
</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,
                                                              --------------------------------------
                                                                2005            2004          2003
                                                              --------        -------       --------
<S>                                                           <C>             <C>           <C>
REVENUES
  Fixed administrative fees                                   $20,916        $20,391        $14,750
  Medical premiums                                                 23            532          7,841
  Interest and other income                                     1,140          1,161          1,939
                                                              -------        -------        -------
     Total revenues                                            22,079         22,084         24,530

EXPENSES
  Medical services                                                 23            532            434
  Marketing, general and administrative                        15,742         14,483         15,680
  Depreciation and amortization                                   177            227            296
  Interest expense                                                  8             66            140
                                                              -------         ------        -------
     Total expenses                                            15,950         15,308         16,550
                                                              -------         ------        -------
Earnings from continuing operations before income taxes         6,129          6,776          7,980
Income tax expense (benefit)                                      655         (1,095)           647
                                                              -------         ------        -------
Earnings from continuing operations                             5,474          7,871          7,333

DISCONTINUED OPERATIONS
   Loss from discontinued operations                             (129)          (700)        (2,127)
                                                              -------         ------        -------
Net earnings                                                  $ 5,345          7,171        $ 5,206
                                                              =======         ======        =======

NET EARNINGS PER COMMON SHARE - BASIC
   Earnings from continuing operations                           0.74           1.09           1.06
   Loss from discontinued operations                            (0.02)         (0.10)         (0.31)
                                                              -------         ------        -------
   Net earnings per common share                              $  0.72           0.99        $  0.75
                                                              =======         ======        =======
       Weighted average shares outstanding                      7,425          7,207          6,941
                                                              =======         ======        =======
NET EARNINGS PER COMMON SHARE - DILUTED
   Earnings from continuing operations                           0.71           1.08           1.06
   Loss from discontinued operations                            (0.02)         (0.10)         (0.31)
                                                              -------         ------        -------
   Net earnings per common share                              $  0.69           0.98        $  0.75
                                                              =======         ======        =======
       Weighted average shares outstanding                      7,674          7,266          6,950
                                                              =======         ======        =======
</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, 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                    -             -         7,171            (82)         7,089
                                         ------       -------       -------        -------        -------
BALANCE AT JUNE 30, 2004                  7,419       $12,226       $ 2,702        $   (43)       $14,885
                                         ------       -------       -------        -------        -------

Issuance of common stock                     31           250                                         250
Comprehensive income:
   Net earnings                                                       5,345                         5,345
 Unrealized gain on marketable
  securities                                                                             3              3
                                         ------       -------       -------        -------        -------
Total comprehensive income (loss)                                     5,345              3          5,598
                                         ------       -------       -------        -------        -------
BALANCE AT JUNE 30, 2005                  7,450        12,476         8,047            (40)        20,483
                                         ======       =======       =======        =======        =======
</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,
                                                                   -----------------------------------------
                                                                     2005             2004           2003
                                                                   ---------       ---------       ---------
<S>                                                                <C>             <C>             <C>
OPERATING ACTIVITIES
    Net earnings                                                   $  5,345        $  7,171        $  5,206
    Adjustments to reconcile net earnings to net cash
       provided by (used in) operating activities:
       Bad debt expense                                                   -               -             847
       Loss on disposal of assets                                         6             700             577
       Loss (gain) on liquidation of investment                           3             (82)             24
       Depreciation and amortization                                    177             227             640
       Deferred income taxes                                            (11)         (1,369)            520
       Stock awards                                                     219             385             127
    Changes in assets and liabilities
       Accounts receivable- State of Tennessee                         (130)            (17)            581
       Other receivables                                                623             289             514
       Refundable federal income taxes                                    -               -             284
       Prepaid expenses and other                                       (25)             20             454
       Other assets                                                       -               -              91
       Medical claims payable                                          (234)           (185)        (23,904)
       Accounts payable and accrued expenses                            (44)         (1,376)          1,648
       Accrued rent                                                    (602)           (315)            367
       Accrued compensation and related benefits                        129              63            (269)
       Other current liabilities                                        154             (46)           (354)
                                                                   --------        --------        --------
       Net cash provided by (used in) operating activities            5,610           5,465         (12,647)
                                                                   --------        --------        --------
INVESTING ACTIVITIES
    Purchase of marketable securities                                (2,779)           (171)           (334)
    Proceeds from the sale of marketable securities                       -               -          15,784
    Purchase of property and equipment                                   61             (72)            (68)
                                                                   --------        --------        --------
       Net cash provided by (used in) investing activities           (2,718)           (243)         15,382
                                                                   --------        --------        --------
FINANCING ACTIVITIES
    Payments made on debt                                              (847)         (1,419)         (1,104)
    Issuance of common stock                                             31             271              36
                                                                   --------        --------        --------
       Net cash used in financing activities                           (816)         (1,148)         (1,068)
                                                                   --------        --------        --------
       Net increase in cash and cash equivalents                      2,076           4,074           1,667
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                        7,767           3,693           2,026
                                                                   --------        --------        --------
CASH AND CASH EQUIVALENTS AT END OF YEAR                           $  9,843           7,767        $  3,693
                                                                   ========        ========        ========
</TABLE>

                                      F-7
<PAGE>

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

<TABLE>
<CAPTION>
                                                                               YEAR ENDED JUNE 30,
                                                                    ---------------------------------------
                                                                       2005           2004           2003
                                                                    ---------      ---------      ---------
<S>                                                                 <C>            <C>            <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Interest paid                                                  $       8      $      63      $     133
                                                                    =========      =========      =========
     Income taxes paid                                              $      82      $       -      $       -
                                                                    =========      =========      =========
      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, 2005, 2004 AND 2003

NOTE 1 - DESCRIPTION OF BUSINESS

United American Healthcare Corporation, together with its wholly owned
subsidiaries (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. UAHC Health Plan of
            Tennessee, Inc. (formerly called OmniCare Health Plan, Inc.)
            ("UAHC-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 require
            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, 2005 and
            2004.

                                      F-9
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

      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, 2005, 2004
            and 2003.

                                      F-10
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

      h.    LONG-LIVED ASSETS. Following the criteria set forth in 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 premiums 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 to reflect TennCare's administrative services only
            ("ASO") arrangement in which UAHC-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 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

                                      F-11
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

            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.    EARNINGS PER SHARE. Basic net earnings per share excluding dilution
            has been computed by dividing net earnings by the weighted-average
            number of common 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, 2005, June 30, 2004 and June 30,
            2003 the Company had outstanding stock options of 249,212, 59,488
            and 9,241, respectively, having a dilutive effect on earnings per
            share.

      o.    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.

                                      F-12
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

NOTE 3 - ACQUISITIONS

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

In February 1994, the Company and its wholly owned subsidiary, UA-TN, entered
into a long-term agreement to manage UAHC-TN (then called OmniCare Health Plan,
Inc.) and, effective July 1994, acquired a 50% equity interest in UAHC-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
UAHC-TN. This increased the Company's ownership in the voting common stock of
UAHC-TN to 75%. The purchase price for the additional common stock and preferred
stock of UAHC-TN was $0.1 million and $10.9 million, respectively, of which $8.7
million was the conversion of UAHC-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 UAHC-TN, in exchange for additional preferred stock of UAHC-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 UAHC-TN's net operating loss carryforwards ("NOL" or "NOLs")
generated prior to January 31, 1996. The remaining NOLs related to UAHC-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 UAHC-TN, purchased the remaining 25% of the
outstanding common stock of UAHC-TN. UAHC-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 that was paid 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-13
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

NOTE 4 - MARKETABLE SECURITIES

A summary of estimated fair value, which approximates amortized cost, of
marketable securities as of June 30, 2005 and 2004 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                     2005          2004
                                                   --------     ---------
<S>                                                <C>          <C>
Available for sale - Current:
 Certificates of deposit                           $  3,730     $   1,000
 Equity and other securities                                            -
                                                   --------     ---------
                                                                    1,000

Available for sale - Noncurrent:
 U.S. government obligations                          2,380         2,331
                                                   --------     ---------
                                                   $  6,110     $   3,331
                                                   ========     =========
</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
$2.4 million and $2.3 million at June 30, 2005 and 2004, respectively.

NOTE 5 - CONCENTRATION OF RISK

During the years ended June 30, 2005, 2004 and 2003, approximately 98.2%, 99.3%
and 87%, 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 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 administrative services
only arrangement.

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 a cost-based fee. Management fee revenues from OmniCare-MI as a
percentage of the Company's total revenues were 8% and 20% for the fiscal years
ended June 30, 2003 and 2002, respectively. See Note 10 for further discussion
of the OmniCare-MI management agreement.

                                      F-14
<PAGE>


             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

NOTE 6 - PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                             2005             2004
                                                         -----------       ---------
<S>                                                      <C>              <C>
Furniture and fixtures                                   $      831       $     878
Equipment                                                     1,007           2,665
Computer software                                               130             202
                                                         ----------       ---------
                                                              1,968           3,745
Less accumulated depreciation and amortization               (1,789)          3,422
                                                         ----------       ---------
                                                         $      179       $     323
                                                         ==========       =========
</TABLE>

NOTE 7 - LONG TERM DEBT

The Company retired its term loan with Standard Federal Bank, N.A. on September
23, 2004. The Company's outstanding debt at each June 30 is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                2005                2004
                                                               ------              -----
<S>                                                            <C>                 <C>
Term loan                                                      $    -              $ 597
Promissory note                                                     -                250
                                                               ------              -----
             Total debt                                             -                847
 Less debt payable within one year                                  -                847
                                                               ------              -----
Long-term debt, less current portion                           $    -              $   -
                                                               ======              =====
</TABLE>

NOTE 8 - MEDICAL CLAIMS PAYABLE

The Company has recorded a liability of $0.2 million, $0.4 million, and $0.6
million at June 30, 2005, 2004, and 2003 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, 2005, 2004 and 2003.

The following table provides a reconciliation of the unpaid claims for the years
ended June 30, 2005, 2004 and 2003 (in thousands):

                                      F-15
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

<TABLE>
<CAPTION>
                                                            2005       2004        2003
                                                          -------     ------     --------
<S>                                                       <C>         <C>        <C>
Balance at beginning of fiscal year                       $   406     $  591     $ 24,495

Incurred losses related to current year                         -          -            -
Incurred losses related to prior year                          23        532          434
Reserve reversal related to prior year                          -          -            -
                                                          -------     ------     --------
Total losses incurred                                          23        532          434

Paid claims related to current year                             -          -            -
Paid claims related to prior year                             257        717       24,338
                                                          -------     ------     --------
Total paid claims                                             257        717       24,338
                                                          -------     ------     --------
Balance at end of fiscal year                             $   172     $  406     $    591
                                                          =======     ======     ========
</TABLE>

                                      F-16
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

NOTE 9 - INCOME TAXES

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

<TABLE>
<CAPTION>
                                                         2005          2004         2003
                                                      ----------   -----------   ----------
<S>                                                   <C>          <C>           <C>
Continuing operations:
Current expense                                       $     666    $      275    $     127
Deferred expense (credit)                                 3,630           408        1,592
Change in valuation allowance                            (3,641)       (1,778)      (1,072)
                                                      ---------    ----------    ---------
                                                      $     655    $   (1,095)   $     647
                                                      =========    ==========    =========
</TABLE>

A reconciliation of the provision for income taxes for each year ended June 30
follows (in thousands): 2005 2004 2003

<TABLE>
<S>                                                        <C>         <C>         <C>
Income tax expense (benefit) at the statutory tax rate     $   1,911   $   2,073   $  1,990
State and city income tax                                        479         313        177
Fixed asset write-offs                                         2,251           -          -
Tax-exempt interest on municipal bonds                             -           -          -
Utilization of NOL carryforward                               (1,479)     (1,462)         -
Valuation allowance                                           (3,641)     (1,778)    (1,072)
Other, net                                                     1,134        (241)      (448)
                                                           ---------   ---------   --------
                                                           $     655   $  (1,095)  $    647
                                                           =========   =========   ========
</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, 2005. 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-17
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

As of June 30, 2005, 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>
                                                                              2005         2004
                                                                           ---------    ---------
<S>                                                                        <C>          <C>
Deferred tax assets
    Accrued rent                                                           $     80     $    150
    Bad debt expense                                                          1,360        1,360
    Deferred compensation                                                       139          149
    Net operating loss carryforward of consolidated losses                    3,770        4,863
    Net operating loss carryforward of purchased subsidiary                       -          598
    Alternative minimum tax credit carryforward                                 561          392
    Property and equipment                                                       (4)       2,247
    Unrealized loss on marketable securities                                      -          (11)
                                                                           --------     --------
Total gross deferred tax assets                                               5,906        9,748
    Valuation allowance                                                      (3,956)      (7,809)
                                                                           --------     --------
Total gross deferred tax liabilities                                              -            -
                                                                           --------     --------
    Net deferred tax asset                                                 $  1,950     $  1,939
                                                                           ========     ========
</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.

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 cost the Company approximately $40,000 per month through November
2005. Due to the subsequent liquidation of OmniCare-MI, effective October 1,
2004, the Company renegotiated sublease terms with

                                      F-18
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

Michigan HMO (formerly doing business as OmniCare Health Plan), which continued
to occupy and pay rent for reduced space in such premises. Michigan HMO's
occupancy of and rent obligation for the subleased premises ceased on February
28, 2005, sooner than the primary lease end in May 2005. The Company recorded a
liability in the first quarter of fiscal year 2005 as it relates to the sublease
obligation.

NOTE 11 - BENEFIT AND OPTION PLANS

The Company offers a 401(k) retirement and savings plan that covers
substantially all of its employees. Effective and since 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 $61,491, $65,862 and $45,653 for the years ended
June 30, 2005, 2004 and 2003, 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, 2005 and 2004 were
$0 and $7,812, 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 November 5,
2004 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 1,000,000 to 1,500,000 shares. 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, April 29, 2004, November 5, 2004, December
2, 2004, November 5, 2004 and December 2, 2004, nonqualified options for a total
of 325,000, 26,000, 5,000, 8,000, 50,000, 75,000, 25,000, 196,500, 280,000,
45,000, 153,000, 45,000, and 153,000 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.

                                      F-19
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

Such options expire March 1, 2008 and became 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, 2005, 2004 AND 2003

Information regarding the stock options for fiscal 2005, 2004 and 2003 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, 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
Granted                     198            4.73            9.4 years                44               4.73
Exercisable                   -               -                    -               313               2.67
Exercised                   (16)           2.04                                    (16)              2.09
Expired                       -               -                    -                 -                  -
Forfeited                   (60)           1.30                    -               (17)                 -
                          -----         -------           ----------              ----            -------
Options
 outstanding at
June 30, 2005               902         $  3.30           7.32 years               628            $  2.84
                          -----         -------           ----------              ----            -------
</TABLE>

Options for 214,500 common shares were available for grant under the amended and
restated 1998 Plan at the end of fiscal 2005.

SFAS No. 123, "Accounting for Stock-Based Compensation," prescribes a method of
accounting for stock-based compensation that recognizes compensation cost based
on the fair value of options at grant date. In lieu of applying this fair value
based method, a company may elect to disclose only the pro forma effects of such
application. The Company has adopted the disclosure-only provisions of SFAS No.
123. In December 2002, SFAS No. 148, "Stock-Based Compensation," was issued,
which requires that the Company illustrate the effect on net income and earnings
per share if it had applied the fair value principles included in SFAS No. 123
for both annual and interim financial statements. 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 year

                                      F-21
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

2005, 2004 and 2003 would have been the pro forma amounts indicated below (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                  2005          2004           2003
                                              -----------     ---------     ---------
<S>                                           <C>             <C>           <C>
Net earnings as reported                      $     5,345     $   7,171     $   5,206
Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all
      awards, net of related tax effects              588         1,047            74
Pro forma net earnings                        $     4,757     $   6,124     $   5,132
Earnings (loss) per share:
      As reported - Basic                     $      0.72     $    0.99     $    0.75
      As reported - Diluted                          0.70          0.98          0.75
      Pro forma -  Basic                      $      0.64     $    0.84     $    0.74
      Pro forma - Diluted                            0.62          0.84          0.74
                                              -----------     ---------     ---------
</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 2005: dividend yield of 0%; expected volatility of 55.43%; risk
free interest rate of 4.35%; and expected life of 10.0 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.

NOTE 12 - LEASES

The Company leases its facilities and certain furniture and equipment under
operating leases expiring at various dates through December 2010. 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, 2005, 2004 and 2003 totaled $0.9
million, $0.6 million and $1.9 million, respectively. Based on the current
commitments, the Company estimates rent expense of $0.4 million for fiscal years
through 2110.

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, 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. Due to the
subsequent liquidation of OmniCare-MI, effective October 1, 2004, the Company
renegotiated sublease terms with Michigan HMO (formerly doing business as
OmniCare Health Plan), which

                                      F-22
<PAGE>


             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

continued to occupy and pay rent for reduced space in such premises. Michigan
HMO's occupancy of and rent obligation for the subleased premises ceased on
February 28, 2005, sooner than the primary lease end in May 2005. The Company
recorded a liability in the first quarter of fiscal year 2005 as it relates to
the sublease obligation.

NOTE 13 - CONTRACTUAL RISK AGREEMENT

Beginning July 1, 2002, TennCare, a State of Tennessee program that provides
medical benefits to Medicaid and working uninsured recipients, implemented an
18-month stabilization program, which entailed changes to TennCare's contracts
with managed care organizations (" MCOs"), including the Company's subsidiary,
UAHC-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 successive
contractual amendments, TennCare extended the ASO reimbursement system
applicable to UAHC-TN, first through June 30, 2004, then through December 31,
2004, and then through June 30, 2005. Through an amendment with an effective
date of July 1, 2005, TennCare extended its contract with UAHC-TN through June
30, 2006 and has implemented a modified risk arrangement with all its contracted
MCOs, including UAHC-TN, which are at risk for losing up to 10% of
administrative fee revenue and may receive up to 15% incentive bonus revenue
based on performance relative to benchmarks.

In September 2002, UAHC-TN and the State of Tennessee, doing business as
TennCare, amended the Contractor Risk Agreement between them. Pursuant to the
amendment, the State of Tennessee agreed to pay UAHC-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 UAHC-TN in October 2002, the State of
Tennessee agreed to pay additional funds to UAHC-TN if future certified
actuarial data confirm they are needed by UAHC-TN to meet its statutory net
worth requirement as of June 30, 2002.

UAHC-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 and additional funds were not recorded in fiscal 2002 financial
statements but have been recorded in subsequent fiscal years as fiscal 2002
claims are processed. For the fiscal year ended June 30, 2005, an additional
$0.02 million of such medical claims were processed, and the same amount was
recognized as revenue by UAHC-TN pursuant to the State's TennCare amendment and
further agreement discussed above in this Note 13.

                                      F-23
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

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, the sale of assets did not occur, and the Company
recorded a loss from discontinued operations of $0.7 million in fiscal year
2004. Due to the subsequent liquidation of OmniCare-MI, effective October 1,
2004, the Company renegotiated sublease terms with Michigan HMO (formerly doing
business as OmniCare Health Plan in Michigan), which continued to occupy and pay
rent for reduced space in such premises. Michigan HMO's occupancy of and rent
obligation for the subleased premises ceased on February 28, 2005, sooner than
the primary lease end in May 2005. The Company recorded a liability in the first
quarter of fiscal year 2005 as it relates to the sublease obligation.

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 a 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.

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

<TABLE>
<CAPTION>
                                                                   2005            2004             2003
                                                              -------------    -------------    -------------
<S>                                                           <C>              <C>              <C>
Management fees                                               $          -      $         -     $      3,395
                                                              ------------     ------------     ------------
Loss from discontinued operations net of zero income taxes    $       (129)    $       (700)    $     (2,127)
                                                              ============     ============     ============
</TABLE>

                                      F-24
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2005, 2004 AND 2003

NOTE 15 - SUBSEQUENT EVENTS

The Company and the Department of Finance and Administration of the State of
Tennessee, Bureau of TennCare ("TennCare") are parties to two escrow agreements
under which the Company has funded, on August 5, 2005, two escrow accounts held
by TennCare at the State Treasury. One, in the amount of $2,300,000, is security
for repayment to TennCare of any overpayments to UAHC-TN that may be determined
by a pending audit of all UAHC-TN process claims since 2002; and the other, in
the amount of $420,500, is security for any money damages that may be awarded to
TennCare in the event of any future litigation between the parties in connection
with certain pending investigations by state and federal authorities. The escrow
accounts bear interest at a rate no lower than the prevailing commercial
interest rates for savings accounts at financial institutions in Nashville,
Tennessee. The escrow accounts will terminate August 5, 2007 or sooner in
certain events, except if litigation is pursued by either party, in which event
the escrow accounts will continue until the end of such litigation. All amounts
(including interest earnings) credited to the escrow accounts will belong to the
Company, except to the extent, if any, they are paid to TennCare to satisfy
amounts determined to be owed to TennCare as provided in the escrow agreements.
Both escrow agreements recite that TennCare does not at this time assert there
has been any breach of UAHC-TN's TennCare contract and that the Company has
funded the escrow accounts as a show of goodwill and good faith in working with
TennCare.

NOTE 16- UNAUDITED SELECTED QUARTERLY FINANCIAL DATA

The following table presents selected quarterly financial data for the years
ended June 30, 2005 and 2004 (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>
2005
Total revenues                $ 5,408       $ 5,399       $ 5,573       $ 5,699       $22,079
Net earnings                    1,466         1,930         1,516           433         5,345
Net earnings per common
share assuming dilution       $  0.19       $  0.26       $  0.19       $  0.05       $  0.69

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
</TABLE>

                                      F-25
<PAGE>

NOTE 17 - 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>
  2005
Revenues - external customers             $      -        $ 20,939      $           -        $ 20,939
Revenues - intersegment                     18,763               -            (18,763)              -
Interest and other income                      285             856                  -           1,141
                                          --------        --------      -------------        --------
Total revenues                            $ 19,048        $ 21,795      $     (18,763)       $ 22,080
                                          ========        ========      =============        ========
Interest expense                          $      8               -                  -               8
Earnings from continuing operations          3,422           2,052                  -           5,474
Loss from discontinued operations             (129)              -                  -            (129)
Segment assets                              57,700          14,489            (47,955)         24,234
Purchase of equipment                            -               -                  -               -
Depreciation and amortization                  177               -                  -             177
                                          ========        ========      =============        ========
  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             344                  -             640
</TABLE>

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

HMO and Managed Plan: UAHC Health Plan of Tennessee, Inc.

                                      F-64
<PAGE>

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. 123(R), "Share-Based Payment", which is a replacement to SFAS No. 123
"Accounting for Stock Based Compensation" and supersedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees", was issued in December 2004. The
revisions are intended to provide investors and other users of financial
statements with more complete and neutral financial information by requiring
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. SFAS No. 123(R) covers a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. SFAS No. 123, as originally issued in 1995,
established a preferable fair-value-based method of accounting for share-based
payment transactions with employees. However, that Statement permitted entities
the option of continuing to apply the guidance in APB Opinion No. 25, as long as
the footnotes to financial statements disclosed what net income would have been
had the preferable fair-value-based method been used. Publicly traded entities
(other than those filing as small business issuers) will be required to apply
SFAS No. 123(R) as of the first annual reporting period that begins after June
15, 2005. The Company is currently evaluating the financial statement impact of
the adoption of SFAS No. 123(R).

SFAS No. 151, "Inventory Costs," which amends ARB No. 43 Chapter 4, "Inventory
Pricing," was issued in November 2004. The amendments made by SFAS No. 151
provide clarity relating to abnormal amounts of idle facility expense, freight,
handling costs, and wasted materials (spoilage), which should be recognized as
current-period charges and require the allocation of fixed production overheads
to inventory based on the normal capacity of the production facilities. The
guidance is effective for inventory costs incurred during fiscal years beginning
after June 15, 2005. The adoption of this standard is expected to have no effect
on the Company's financial condition or results of operations.

SFAS No. 154, "Accounting Changes and Error Corrections - replacement of APB
Opinion No. 20 and FASB Statement No. 3," (SFAS No. 154) was issued in May 2005.
SFAS No. 154 changes the accounting for and reporting of a change in accounting
principle by requiring retrospective application to prior periods' financial
statements of changes in accounting principle unless impracticable. SFAS No. 154
is effective for accounting changes made in fiscal years beginning after
December 15, 2005. We do not expect the adoption of SFAS No. 154 to have a
material impact on our results of operations, financial position or cash flows.

                                      F-65
<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 Registrant's 1995 Form
                to Management Agreement between         10-K
                United American Healthcare
                Corporation and Personal Physician
                Care, Inc. dated
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER          DESCRIPTION OF DOCUMENT                              REFERENCE TO                      HEREWITH
-------         -----------------------                         ----------------------                 --------
<S>             <C>                                     <C>                                            <C>
                March 18, 1987

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 Registrant'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>
<S>             <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

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



</TABLE>

<PAGE>

<TABLE>
<S>             <C>                                     <C>                                            <C>
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.

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.
</TABLE>

<PAGE>

<TABLE>
<S>             <C>                                     <C>                                            <C>
10.60           Amendment of Business Loan              Exhibit 10.60 to Registrant's 2002
                Agreement with Standard FederalBank     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

10.63           United American Healthcare              Form 8-K filed January 11, 2005
                Corporation Supplemental Executive
                Retirement Plan

10.64           Severance Agreement dated as of         Form 10-Q filed April 28, 2005
                April 15, 2005 between United
                American of Tennessee, Inc and
                Osbie L. Howard

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
</TABLE>

<PAGE>

<TABLE>
<S>             <C>                                     <C>                                                <C>
                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.

16.6            Letter dated November 22, 2004,         Form 8-K filed November 22, 2004
                from Follmer Rudzewicz PLC to the
                Securities and Exchange Commission

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             Form 8-K filed January 14, 2000
                6, 2000

99.3            Press release dated April 15, 2005.     Form 8-K filed April 15, 2005

99.3            Press release dated April 21, 2005.     Form 8-K filed April 21, 2005

99.4            Notice of Administrative                Form 8-K/A filed April 21, 2005
                Supervision issued by the
                Commissioner of the State of
                Tennessee Department of Commerce
                and Insurance, dated April 20, 2005.
</TABLE>