**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  FORM 10-QSB
 
 **[
                  X ]**
              **QUARTERLY
                  REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934**
 
 For
        the quarterly period
        ended**September****30,
        2007**
 
 **[  
                  ]**
              **TRANSITION
                  REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934**
 
 For
        the transition period
        fromto
 
 **Commission
        file number 000-27621**
  **UNITED
                  AMERICAN CORPORATION**(Exact
                  name of small business issuer as specified in its
                  charter)
  **Florida**
                (State
                  or other jurisdiction of
                incorporation
                  or organization)
              **95-4720231**
                (I.R.S.
                  Employer
                Identification
                  No.)4150
                    Ste-Catherine Quest, Suite 200, Montreal, Quebec, Canada H3Z
                    0A1
                (Address
                  of principal executive offices)514-313-6010
                (Issuer’s
                  telephone number)(Former
                  name, former address and former fiscal year, if changed since last
                  report)
  Check
          whether the issuer (1) 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 issuer was required to file such reports),
          and
          (2) has been subject to such filing requirements for the past 90 days. **[
          X ]Yes [   ]No**
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). **[ 
         ]Yes [ X ]No**
 State
          the
          number of shares outstanding of each of the issuer’s classes of common stock, as
          of the latest practicable date:  51,079,985 common shares as of
          November 14, 2007.
  Transitional Small Business Disclosure
        Format: **[   ]Yes [ X ]No**


**TABLE
        OF CONTENTS**
   PART
        I
– FINANCIAL INFORMATION


PageItem
                  1.
              Financial
                  Statements
              1Item
                  2.
              Management’s
                  Discussion and Analysis
              23Item
                  3.
              Controls
                  and Procedures
              30
  PART
        II – OTHER INFORMATION
 Item
                  1.
              Legal
                  Proceedings
              32Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              32Item
                  3.
              Defaults
                  Upon Senior Securities
              32Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              32Item
                  5.
              Other
                  Information
              32Item
                  6.
              Exhibits
              32




**PART
        I - FINANCIAL INFORMATION**
 
 **Item
        1.                           Financial
        Statements**
 
 Our
                  unaudited condensed consolidated financial statements included
                  in this
                  Form 10-QSB are as follows:Unaudited
                  Condensed Consolidated Balance Sheet as of September 30,
                  2007
              2Unaudited
                  Condensed Consolidated Statements of Operations and Comprehensive
                  Income
                  (Loss) for the nine months and three months ended September 30,
                  2007 and
                  2006;
              3Unaudited
                  Condensed Consolidated Statements of Cash Flows for the nine months
                  ended
                  September 30, 2007 and 2006;
              4Notes
                  to Unaudited Condensed Consolidated Financial Statements;
              5
   These
        unaudited condensed consolidated financial statements have been prepared
        in
        accordance with accounting principles generally accepted in the United States
        of
        America for interim financial information and the SEC instructions to Form
        10-QSB.  In the opinion of management, all adjustments considered
        necessary for a fair presentation have been included.  Operating
        results for the interim period ended September 30, 2007 are not necessarily
        indicative of the results that can be expected for the full year.
  1




**UNITED
                  AMERICAN
                  CORP****CONDENSED
                  CONSOLIDATED BALANCE
                  SHEET****SEPTEMBER
                  30,
                  2007****(UNAUDITED)****ASSETS****(IN
                  US$)**Current
                  Assets:Cash
                  and cash
                  equivalents
              
              $
              58,016Accounts
                  receivable,
                  net
              
              
              1,776,716Prepaid
                  expenses and
                  other current assets
              
              
              55,325Loan
                  receivable -
                  related company
              
              
              452,563Total
                  Current Assets
              
              
              2,342,620Fixed
                  assets, net of
                  depreciation
              
              
              349,753**TOTAL
                  ASSETS**
              
              $
              2,692,373**LIABILITIES
                  AND STOCKHOLDERS'
                  EQUITY (DEFICIT)****LIABILITIES**Current
                  Liabilities:Loans
                  payable -
                  related parties
              
              $
              162,049Other
                  payables
              
              
              636,631Convertible
                  debentures
              
              
              90,961Derivative
                  liability
              
              
              18,885Accounts
                  payable and
                  accrued expenses
              
              
              2,105,042Total
                  Current Liabilities
              
              
              3,013,568**Total
                  Liabilities**
              
              
              3,013,568**STOCKHOLDERS'
                  EQUITY
                  (DEFICIT)**Common
                  stock, $.001 Par Value;
                  100,000,000 shares authorizedand
                  51,079,985 shares issued and outstanding
              
              
              51,080Additional
                  paid-in
                  capital
              
              
              4,865,893Accumulated
                  deficit
              
              
              (5,287,392
              )Accumulated
                  other
                  comprehensive income (loss)
              
              
              49,224**Total
                  Stockholders' Equity (Deficit)**
              
              
              (321,195
              )**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              $
              2,692,373






**The
      accompanying notes are an integral part of the condensed consolidated financial
      statements.**




2




**UNITED
                  AMERICAN
                  CORPORATION****CONDENSED
                  CONSOLIDATED STATEMENTS
                  OF OPERATIONS AND****COMPREHENSIVE
                  INCOME
                  (LOSS)****FOR
                  THE NINE AND THREE MONTHS
                  ENDED SEPTEMBER 30, 2007 AND 2006****(UNAUDITED)****IN
                  US$**
              
              
              **IN
                  US$****NINE
                  MONTHS**
              
              
              **THREE
                  MONTHS****SEPTEMBER
                  30,**
              
              
              **SEPTEMBER
                  30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****OPERATING
                  REVENUES**Sales
              
              $
              21,209,287
              
              
              $
              10,838,193
              
              
              $
              8,039,237
              
              
              $
              6,490,857**COST
                  OF
                  SALES**Inventory,
                  beginning
                  of period
              
              
              -
              
              
              
              51,652
              
              
              
              -
              
              
              
              15,862Purchases
              
              
              19,005,817
              
              
              
              9,587,898
              
              
              
              7,690,158
              
              
              
              5,827,902Inventory,
                  end of
                  period
              
              
              -
              
              
              
              (11,034
              )
              
              
              -
              
              
              
              (11,034
              )**Total
                  Cost of Sales**
              
              
              19,005,817
              
              
              
              9,628,516
              
              
              
              7,690,158
              
              
              
              5,832,730**GROSS
                  PROFIT**
              
              
              2,203,470
              
              
              
              1,209,677
              
              
              
              349,079
              
              
              
              658,127**OPERATING
                  EXPENSES**Selling
                  and
                  promotion
              
              
              95,182
              
              
              
              73,728
              
              
              
              1,954
              
              
              
              17,508Professional
                  and
                  consulting fees
              
              
              319,778
              
              
              
              234,673
              
              
              
              101,463
              
              
              
              95,485Commissions
                  and
                  wages
              
              
              1,052,665
              
              
              
              821,408
              
              
              
              160,285
              
              
              
              379,839Other
                  general
                  and administrative expenses
              
              
              20,529
              
              
              
              116,382
              
              
              
              6,802
              
              
              
              44,291Depreciation,
                  amortization and impairment
              
              
              178,931
              
              
              
              184,700
              
              
              
              61,096
              
              
              
              65,950**Total
                  Operating Expenses**
              
              
              1,667,085
              
              
              
              1,430,891
              
              
              
              331,600
              
              
              
              603,073**GAIN
                  (LOSS) BEFORE OTHER
                  INCOME**
              
              
              536,385
              
              
              
              (221,214
              )
              
              
              17,479
              
              
              
              55,054**OTHER
                  INCOME
                  (EXPENSE)**Gain
                  on
                  derivative liability
              
              
              8,803
              
              
              
              -
              
              
              
              -
              
              
              
              -Interest
                  expense
              
              
              (78,203
              )
              
              
              (28,453
              )
              
              
              (13,663
              )
              
              
              (11,826
              )**Total
                  Other Income (Expense)**
              
              
              (69,400
              )
              
              
              (28,453
              )
              
              
              (13,663
              )
              
              
              (11,826
              )**NET
                  INCOME (LOSS) BEFORE PROVISION
                  FOR****INCOME
                  TAXES AND
                  MINORITY INTEREST**
              
              
              466,985
              
              
              
              (249,667
              )
              
              
              3,816
              
              
              
              43,228Minority
                  interest
              
              
              -
              
              
              
              112,154
              
              
              
              -
              
              
              
              64,334**NET
                  INCOME (LOSS) BEFORE
                  PROVISION****FOR
                  INCOME
                  TAXES**
              
              
              466,985
              
              
              
              (137,513
              )
              
              
              3,816
              
              
              
              107,562**Provision
                  for Income
                  Taxes**
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -**NET
                  INCOME (LOSS)
                  APPLICABLE****TO
                  COMMON
                  SHARES**
              
              $
              466,985
              
              
              $
              (137,513
              )
              
              $
              3,816
              
              
              $
              107,562**NET
                  INCOME (LOSS) PER BASIC AND
                  DILUTED SHARES****BASIC**
              
              $
              0.01
              
              
              $
              (0.00
              )
              
              $
              0.00
              
              
              $
              0.00**FULLY
                  DILUTED**
              
              $
              0.01
              
              
              
              (0.00
              )
              
              $
              0.00
              
              
              
              0.00**WEIGHTED
                  AVERAGE NUMBER OF
                  COMMON****SHARES
                  OUTSTANDING - BASIC**
              
              
              51,079,985
              
              
              
              49,969,985
              
              
              
              51,079,985
              
              
              
              49,969,985**WEIGHTED
                  AVERAGE NUMBER OF
                  COMMON****SHARES
                  OUTSTANDING - FULLY DILUTED**
              
              
              52,508,556
              
              
              
              49,969,985
              
              
              
              52,508,556
              
              
              
              49,969,985**COMPREHENSIVE
                  INCOME
                  (LOSS)**Net
                  income
                  (loss)
              
              $
              466,985
              
              
              $
              (137,513
              )
              
              $
              3,816
              
              
              $
              107,562Other
                  comprehensive income (loss)Currency
                  translation adjustments
              
              
              (20,896
              )
              
              
              45,692
              
              
              
              (14,222
              )
              
              
              (8,085
              )Comprehensive
                  income
                  (loss)
              
              $
              446,089
              
              
              $
              (91,821
              )
              
              $
              (10,406
              )
              
              $
              99,477






The
      accompanying notes are an integral part of
      the condensed consolidated financial statements.




3




**UNITED
                  AMERICAN
                  CORPORATION****CONDENSED
                  CONSOLIDATED STATEMENTS
                  OF CASH FLOWS****FOR
                  THE NINE MONTHS ENDED
                  SEPTEMBER 30, 2007 AND 2006****(UNAUDITED)****IN
                  US$****2007**
              
              
              **2006****CASH
                  FLOWS FROM OPERATING
                  ACTIVITIES**Net
                  income
                  (loss)
              
              $
              466,985
              
              
              $
              (137,513
              )**Adjustments
                  to
                  reconcile net income (loss) to net cash****provided
                  by (used in) operating activities:**Depreciation,
                  amortization and impairment
              
              
              178,931
              
              
              
              184,700Gain
                  on derivative liability
              
              
              (8,803
              )
              
              
              -**Changes
                  in assets and
                  liabilities**(Increase)
                  in accounts receivable
              
              
              (141,208
              )
              
              
              (559,049
              )Decrease
                  in inventory
              
              
              -
              
              
              
              40,618(Increase)
                  in prepaid expenses and other current assets
              
              
              (10,433
              )
              
              
              (108,846
              )Increase
                  in deferred revenue
              
              
              -
              
              
              
              8,290Increase
                  in accounts payable andand
                  accrued expenses
              
              
              68,453
              
              
              
              155,245Total
                  adjustments
              
              
              86,940
              
              
              
              (279,042
              )**Net
                  cash provided by (used in) operating
                  activities**
              
              
              553,925
              
              
              
              (416,555
              )**CASH
                  FLOWS FROM INVESTING
                  ACTIVITIES**Acquisitions
                  of
                  fixed assets
              
              
              (83,194
              )
              
              
              (117,935
              )(Increase)
                  decrease in loan receivable - related company
              
              
              30,368
              
              
              
              -**Net
                  cash (used in) investing activities**
              
              
              (52,826
              )
              
              
              (117,935
              )**CASH
                  FLOWS FROM FINANCING
                  ACTIVITES**(Decrease)
                  in bank overdraft
              
              
              -
              
              
              
              (16,535
              )Proceeds
                  from loan payable - related parties, net of
                  repayments
              
              
              (430,876
              )
              
              
              505,333**Net
                  cash provided by (used in) financing
                  activities**
              
              
              (430,876
              )
              
              
              488,798Effect
                  of foreign
                  currency
              
              
              (81,760
              )
              
              
              45,692**NET
                  INCREASE (DECREASE)
                  IN****CASH
                  AND
                  CASH EQUIVALENTS**
              
              
              (11,537
              )
              
              
              -**CASH
                  AND CASH EQUIVALENTS
                  -****BEGINNING
                  OF YEAR**
              
              
              69,553
              
              
              
              -**CASH
                  AND CASH EQUIVALENTS - END OF
                  PERIOD**
              
              $
              58,016
              
              
              $
              -**CASH
                  PAID DURING THE PERIOD
                  FOR:**Interest
                  expense
              
              $
              51,203
              
              
              $
              22,453






The
      accompanying notes are an integral part of
      the condensed consolidated financial statements.




4


**UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
  **NOTE
                        1-**
                    **ORGANIZATION
                        AND BASIS OF
                        PRESENTATION**
 The
          unaudited condensed consolidated financial statements included herein have
          been
          prepared, without audit, pursuant to the rules and regulations of the Securities
          and Exchange Commission (“SEC”).  The condensed consolidated financial
          statements and notes are presented as permitted on Form 10-QSB and do not
          contain information included in the Company’s annual consolidated statements and
          notes.  Certain information and footnote disclosures normally included
          in financial statements prepared in accordance with accounting principles
          generally accepted in the United States of America have been condensed
          or
          omitted pursuant to such rules and regulations, although the Company believes
          that the disclosures are adequate to make the information presented not
          misleading.  It is suggested that these condensed consolidated
          financial statements be read in conjunction with the December 31, 2006
          audited
          consolidated financial statements and the accompanying notes
          thereto.  While management believes the procedures followed in
          preparing these condensed consolidated financial statements are reasonable,
          the
          accuracy of the amounts are in some respects dependent upon the facts that
          will
          exist, and procedures that will be accomplished by the Company later in
          the
          year.
 
 These
          condensed consolidated unaudited financial statements reflect all adjustments,
          including normal recurring adjustments which, in the opinion of management,
          are
          necessary to present fairly the consolidated operations and cash flows
          for the
          periods presented.
 
 United
          American Corporation (the “Company”) was incorporated under the laws of the
          State of Florida on July 17, 1992 under the name American Financial Seminars,
          Inc. with authorized common stock of 1,000 shares at $1.00 par value. Since
          its
          inception the Company has made several name changes and increased the authorized
          common stock to 50,000,000 shares with a par value of $.001. On February
          5,
          2004, the name was changed to United American Corporation.
 
 The
          Company was first organized for the purpose of marketing a software license
          known as “Gnotella”, however, in late 2001 this activity was
          abandoned.
 
 On
          July
          18, 2003, the Company entered into a share exchange agreement with 3874958
          Canada Inc. (a Canadian corporation and an affiliate of the Company by
          common
          officers) to transfer 26,250,000 shares of its common stock for 100 shares
          of
          American United Corporation (a Delaware corporation and wholly owned subsidiary
          of 3874958 Canada Inc.) which represented 100% of the outstanding shares
          of
          American United Corporation. The Company in this transaction acquired internet
          telecommunications equipment valued at $874,125. These assets did not go
          into
          service until 2004.  The 26,250,000 shares of the Company were issued
          into an escrow account on October 6, 2003, the effective date of the
          transaction. Later, American United Corporation was dissolved. The equipment
          value was based on an independent valuation. The shares issued were to
          3874958
          Canada Inc., whose sole owner at the time, was the President and CEO of
          the
          Company.  This transaction did not constitute a reverse merger even
          though the Company issued in excess of 50% of its then current issued and
          outstanding shares.
  5
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    1-**
                **ORGANIZATION
                    AND BASIS OF PRESENTATION
                    (CONTINUED)**
 
 The
          transaction was viewed as a reorganization of equity under common control
          since
          the beneficial owner of the majority shares in the Company was the same
          before
          and after the transaction.
 
 In
          January 2004, the Company took ownership of all 100 shares issued and
          outstanding of 3894517 Canada, Inc. (a Canadian corporation), whose 100%
          owner
          was at the time President and CEO of the Company. At this time, 3894517
          Canada,
          Inc. became the operating unit of the Company for the services they were
          providing utilizing the equipment acquired in 2003 from American United
          Corporation. There was no consideration paid for these 100 shares.
 
 In
          2004,
          the Company entered the telecommunications business by the creation of
          United
          American Telecom, a division focused on terminating call traffic in the
          Caribbean, and by the creation of Teliphone, a former division focused
          on
          providing Voice-over-Internet –Protocol (VoIP) calling services to residential
          and business customers.
 
 Teliphone,
          Inc. was founded on August 27, 2004 in order to develop a VoIP network
          which
          enables users to connect an electronic device to their internet connection
          at
          the home or office which permits them to make telephone calls to any destination
          phone number anywhere in the world. VoIP is currently growing in scale
          significantly in North America. Industry experts predict the VoIP offering
          to be
          one of the fastest growing sectors from now until 2009. This innovative
          new
          approach to telecommunications has the benefit of drastically reducing
          the cost
          of making these calls as the distances are covered over the Internet instead
          of
          over dedicated lines such as traditional telephony. Teliphone has grown
          primarily in the Province of Quebec, Canada through the sale of its product
          offering in retail stores and over the internet.
 
 Related
          party transactions the Company has entered into are advances to the entities
          consolidated within 3894517 Canada, Inc. which is a wholly-owned subsidiary,
          all
          of which have been eliminated herein. Additionally, from time to time
          shareholders or entities under common control will advance amounts to the
          Company to assist in cash flow. These are all short-term amounts and interest
          bearing at rates ranging between 10-20%.
  6
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    1-**
                **ORGANIZATION
                    AND BASIS OF PRESENTATION
                    (CONTINUED)**
  On
          October 23, 2006, the Company’s shareholders voted in the majority to spin-off
          its entire holdings of 25,737,785 shares of the common stock of Teliphone
          Corp.
          with an effective date of October 30, 2006. In accordance with APB 29,
          “Accounting for Nomonetary Transactions”, the Company distributed the capital
          stock they owned in Teliphone Corp. to their stockholders (a “spin-off”). As a
          result, the Company recognized the value of the assets and liabilities
          spun-out
          based on the respective recorded amounts after reduction for any impairment
          of
          value due to the fact that this was a nonreciprocal transfer to owners.
          (See
          Note 10).
 
 Subsequently
          on July 1, 2007, the Company dissolved its wholly-owned subsidiary 3894517
          Canada Inc. as it was no longer required for the Company to effectuate
          its
          normal day-to-day operations. (See Note 12- Subsequent Events)
 
 **Going
          Concern**
 
 As
          shown
          in the accompanying consolidated financial statements the Company has started
          to
          show net profits ($466,985 for the nine months ended September 30, 2007),
          but
          prior to this time, the Company had incurred significant  net losses,
          and accumulated a deficit of $5,287,392 through September 30, 2007 and
          has a
          working capital deficiency of $670,948 as of September 30, 2007.
 
 Despite,
          the prior recurring losses, the Company has been successful in establishing
          distribution channels in Africa and generating significant revenue growth
          in the
          past six months. There is no guarantee that the Company will be able to
          continue
          to grow at this pace, raise enough capital or generate revenues from other
          areas
          of the world to sustain its operations.  These conditions raise
          substantial doubt about the Company’s ability to continue as a going concern for
          a reasonable period.
 
 Management
          believes that the Company’s capital requirements will depend on many factors.
          These factors include the increase in sales through existing channels as
          well as
          the Company’s ability to continue to expand its customer base in the
          international telecommunications market.
 
 In
          the
          near term, the Company does not require additional financing to continue
          its
          operations as it has achieved a profitable level of operations. The Company’s
          ability to continue as a going concern for a reasonable period is dependent
          upon
          management’s ability to continue to achieve profitable
          operations.  There can be no assurance that management will be able to
          continue operations at a profitable level and hence, the Company would
          have to
          raise sufficient capital, under terms satisfactory to the Company, if at
          all.
  7
  **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    1-**
                **ORGANIZATION
                    AND BASIS OF PRESENTATION
                    (CONTINUED)**
 
 **Going
          Concern (Continued)**
 
 The
          condensed consolidated financial statements do not include any adjustments
          relating to the carrying amounts of recorded assets or the carrying amounts
          and
          classification of recorded liabilities that may be required should the
          Company
          be unable to continue as a going concern.
  **NOTE
                    2-**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING
                    POLICIES**
  **Principles
          of Consolidation**
 
 The
          condensed consolidated financial statements include the accounts of the
          Company
          and all of its wholly owned and majority owned subsidiaries. All significant
          intercompany accounts and transactions have been eliminated in consolidation.
          All minority interests are reflected in the condensed consolidated financial
          statements.
 
 **Use
          of Estimates**
 
 The
          preparation of financial statements in conformity with accounting principles
          generally accepted in the United States of America requires management
          to make
          estimates and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements and the reported amounts of revenues and expenses
          during the reporting period.  On an on-going basis, the Company
          evaluates its estimates, including, but not limited to, those related to
          bad
          debts, income taxes, foreign currency risks, derivative liabilities and
          contingencies. The Company bases its estimates on historical experience
          and on
          various other assumptions that are believed to be reasonable under the
          circumstances, the results of which form the basis for making judgments
          about
          the carrying value of assets and liabilities that are not readily apparent
          from
          other sources. Actual results could differ from those estimates.
 
 **Cash
          and Cash Equivalents**
 
 The
          Company considers all highly liquid debt instruments and other short-term
          investments with an initial maturity of three months or less to be cash
          equivalents.
  8
  **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    2-**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES **(CONTINUED)****
 
 **Comprehensive
          Income**
 
 The
          Company adopted Statement of Financial Accounting Standards No, 130, “Reporting
          Comprehensive Income,” (SFAS No. 130). SFAS No. 130 requires the reporting of
          comprehensive income in addition to net income from operations.
 
 Comprehensive
          income is a more inclusive financial reporting methodology that includes
          disclosure of information that historically has not been recognized in
          the
          calculation of net income.
 
 **Fair
          Value of Financial Instruments (other than Derivative Financial
          Instruments)**
 
 The
          carrying amounts reported in the condensed consolidated balance sheet for
          cash
          and cash equivalents, and accounts payable approximate fair value because
          of the
          immediate or short-term maturity of these financial instruments.  For
          the notes payable, the carrying amount reported is based upon the incremental
          borrowing rates otherwise available to the Company for similar borrowings.
          For
          the convertible debentures, fair values were calculated at net present
          value
          using the Company’s weighted average borrowing rate for debt instruments without
          conversion features applied to total future cash flows of the
          instruments.
 
 **Currency
          Translation**
  For
          subsidiaries outside the United States that prepare financial statements
          in
          currencies other than the U.S. dollar, the Company translates income and
          expense
          amounts at average exchange rates for the year, translates assets and
          liabilities at year-end exchange rates and equity at historical rates.
          The
          Company’s reporting currency is that of the US dollar while its functional
          currency is that of the Canadian dollar for its subsidiaries. The Company
          records these translation adjustments as accumulated other comprehensive
          income
          (loss). Gains and losses from foreign currency transactions commenced in
          2004
          when the Company utilized a Canadian subsidiary to record all of the
          transactions. The Company recognized a loss of $20,896 and $45,692 for
          the nine
          months ended September 30, 2007 and 2006, respectively.
 
 **Revenue
          Recognition**
 
 In
          2004,
          when the Company emerged from the development stage with the acquisition
          of
          American United Corporation/ 3874958 Canada Inc. and after assuming ownership
          of
          3894517 Canada Inc. they began to recognize revenue from their VoIP services
          when the services were rendered and collection was reasonably assured in
          accordance with SAB 101.
  9
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    2-**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES**(CONTINUED)****
 
 **Revenue
          Recognition (Continued)**
 
 There
          are
          limited estimates required in connection with recognition of revenue because
          voice traffic is measured in automated switches and routers, and contractual
          rates for traffic are used to bill or declare revenue on a monthly basis.
          However, for certain voice contracts, historical traffic may be retroactively
          re-rated within a contract period. This traffic re-rating is calculated
          and
          recognized immediately in the month the new contractual rate is
          established.  Although relatively infrequent, there can be material
          disputes with customers over volume or traffic recognized on our customers’
switches. The Company’s practice is to maintain recorded revenue based on our
          traffic data until the merits of a dispute are identified.
 
 **Accounts
          Receivable**
 
 The
          Company conducts business and extends credit based on an evaluation of
          the
          customers’ financial condition, generally without requiring collateral. Exposure
          to losses on receivables is expected to vary by customer due to the financial
          condition of each customer. The Company monitors exposure to credit losses
          and
          maintains allowances for anticipated losses considered necessary under
          the
          circumstances.
 
 Accounts
          receivable are generally due within 30 days and collateral is not required.
          Unbilled accounts receivable represents amounts due from customers for
          which
          billing statements have not been generated and sent to the
          customers.  The Company has not established an allowance for doubtful
          accounts as of September 30, 2007.
 
 **Income
          Taxes**
 
 The
          Company accounts for income taxes utilizing the liability method of
          accounting.  Under the liability method, deferred taxes are determined
          based on differences between financial statement and tax bases of assets
          and
          liabilities at enacted tax rates in effect in years in which differences
          are
          expected to reverse.  Valuation allowances are established, when
          necessary, to reduce deferred tax assets to amounts that are expected to
          be
          realized.
 
 **Convertible
          Instruments**
 
 The
          Company reviews the terms of convertible debt and equity securities for
          indications requiring bifurcation, and separate accounting, for the embedded
          conversion feature. Generally, embedded conversion features where the ability
          to
          physical or net-share settle the conversion option is not within the control
          of
          the Company are bifurcated and accounted for as a derivative financial
          instrument. (See Derivative Financial Instruments below). Bifurcation of
          the
          embedded derivative instrument requires allocation of the proceeds first
          to the
          fair value of the embedded derivative instrument with the residual allocated
          to
          the debt instrument. The resulting discount to the face value of the debt
          instrument is amortized through periodic charges to interest expense using
          the
          Effective Interest Method.
  10
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    2-**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES**(CONTINUED)****
 
 **Derivative
          Financial Instruments**
 
 The
          Company generally does not use derivative financial instruments to hedge
          exposures to cash-flow or market risks. However, certain other financial
          instruments, such as warrants or options to acquire common stock and the
          embedded conversion features of debt and preferred instruments that are
          indexed
          to the Company’s common stock, are classified as liabilities when either (a) the
          holder possesses rights to net-cash settlement or (b) physical or net share
          settlement is not within the control of the Company. In such instances,
          net-cash
          settlement is assumed for financial accounting and reporting, even when
          the
          terms of the underlying contracts do not provide for net-cash settlement.
          Such
          financial instruments are initially recorded at fair value and subsequently
          adjusted to fair value at the close of each reporting period.
 
 **Advertising
          Costs**
 
 The
          Company expenses the costs associated with advertising as
          incurred.  Advertising expenses for the nine months ended September
          30, 2007 and 2006 are included in general and administrative expenses in
          the
          condensed consolidated statements of operations.
 
 **Concentration
          Risk**
 
 In
          the
          nine months ended September 30, 2007 and 2006, the Company generated 97%
          and 98%
          of their sales from one customer. A major customer is a customer that represents
          greater than 10% of the total sales.
 
 In
          the
          nine months ended September 30, 2007 and 2006, the Company incurred 96%
          and 64%
          of their purchases from two vendors and one vendor, respectively. A major
          vendor
          is a vendor that represents greater than 10% of the total
          purchases.
 
 **Fixed
                    Assets**
 
 Fixed
          assets are stated at cost.  Depreciation is computed using the
          straight-line method over the estimated useful lives of the assets; automobiles
          – 3 years, computer and internet telecommunications equipment – 5 years, and
          furniture and fixtures – 5 years.
 
 When
          assets are retired or otherwise disposed of, the costs and related accumulated
          depreciation are removed from the accounts, and any resulting gain or loss
          is
          recognized in income for the period.  The cost of maintenance and
          repairs is charged to income as incurred; significant renewals and betterments
          are capitalized. Deduction is made for retirements resulting from renewals
          or
          betterments.
  11
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
   **NOTE
                      2-**
                  **SUMMARY
                      OF SIGNIFICANT ACCOUNTING POLICIES**(CONTINUED)****
 **Impairment
          of Long-Lived Assets**
 
 Long-lived
          assets, primarily fixed assets, are reviewed for impairment whenever events
          or
          changes in circumstances indicate that the carrying amount of the assets
          might
          not be recoverable. The Company does not perform a periodic assessment
          of assets
          for impairment in the absence of such information or indicators. Conditions
          that
          would necessitate an impairment assessment include a significant decline
          in the
          observable market value of an asset, a significant change in the extent
          or
          manner in which an asset is used, or a significant adverse change that
          would
          indicate that the carrying amount of an asset or group of assets is not
          recoverable. For long-lived assets to be held and used, the Company recognizes
          an impairment loss only if its carrying amount is not recoverable through
          its
          undiscounted cash flows and measures the impairment loss based on the difference
          between the carrying amount and estimated fair value. The Company, determined
          based upon an independent valuation performed on its equipment acquired
          from
          American United Corporation that there was impairment of $1,750,875 (on
          October
          6, 2003) based upon the fair value of the stock issued for the equipment.
          This
          amount is reflected as impairment in the December 31, 2003 financial statements.
          There has been no further impairment since this date.
  **Earnings
                    (Loss) Per Share of Common
                    Stock**
 
 Basic
          net
          earnings (loss) per common share is computed using the weighted average
          number
          of common shares outstanding.  Diluted earnings per share (EPS)
          includes additional dilution from common stock equivalents, such as stock
          issuable pursuant to the exercise of stock options and warrants as well
          as from
          convertible debentures.  Common stock equivalents were not included in
          the computation of diluted earnings per share when the Company reported
          a loss
          because to do so would be antidilutive for the period presented.
 
 The
          following is a reconciliation of the computation for basic and diluted
          EPS:
 
 **September
                      30,**
                  
                  
                  **September
                      30,****2007**
                  
                  
                  **2006**Net
                      income
                      (loss)
                  
                  $
                  466,985
                  
                  
                  $
                  (137,513
                  )Weighted-average
                      common
                      sharesOutstanding
                      (Basic)
                  
                  
                  51,079,985
                  
                  
                  
                  49,969,985Weighted-average
                      common
                      stockEquivalentsConvertible
                      debentures
                  
                  
                  1,428,571
                  
                  
                  
                  500,000Stock
                      options
                  
                  
                  -
                  
                  
                  
                  -Warrants
                  
                  
                  -
                  
                  
                  
                  -Weighted-average
                      common
                      sharesOutstanding
                      (Diluted)
                  
                  
                  52,508,556
                  
                  
                  
                  50,469,985
 
 12
 **UNITED
              AMERICAN CORPORATION**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                      2-**
                  **SUMMARY
                      OF SIGNIFICANT ACCOUNTING POLICIES **(CONTINUED)****
 **Stock-Based
          Compensation**
 
 On
          December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
          Statement of Financial Accounting Standards No. 123 (Revised 2004),
“*Share-Based Payment*” (“SFAS 123R”).  SFAS 123R requires that
          compensation cost related to share-based payment transactions be recognized
          in
          the financial statements. Share-based payment transactions within the scope
          of
          SFAS 123R include stock options, restricted stock plans, performance-based
          awards, stock appreciation rights, and employee share purchase
          plans.  The provisions of SFAS 123R, as amended, are effective for
          small business issuers beginning as of the next fiscal year after December
          15,
          2005.  The Company has adopted the provisions of SFAS 123R for its
          fiscal year ended December 31, 2006. The adoption of this principle had
          no
          effect on the Company’s operations.
 
 On
          January 1, 2006, the Company adopted the provisions of FAS No. 123R “Share-Based
          Payment” (“FAS 123R”) which requires recognition of stock-based compensation
          expense for all share-based payments based on fair value. Prior to January
          1,
          2006, the Company measured compensation expense for all of its share-based
          compensation using the intrinsic value method prescribed by Accounting
          Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to
          Employees” (“APB 25”) and related interpretations. The Company has provided pro
          forma disclosure amounts in accordance with FAS No. 148, “Accounting for
          Stock-Based Compensation – Transition and Disclosure – an amendment of FASB
          Statement No. 123” (“FAS 148”), as if the fair value method defined by FAS No.
          123, “Accounting for Stock Based Compensation” (“FAS 123”) had been applied to
          its stock-based compensation.
 
 The
          Company has elected to use the modified–prospective approach method. Under that
          transition method, the calculated expense in 2006 is equivalent to compensation
          expense for all awards granted prior to, but not yet vested as of January
          1,
          2006, based on the grant-date fair values estimated in accordance with
          the
          original provisions of FAS 123. Stock-based compensation expense for all
          awards
          granted after January 1, 2006 is based on the grant-date fair values estimated
          in accordance with the provisions of FAS 123R. The Company recognizes these
          compensation costs, net of an estimated forfeiture rate, on a pro rata
          basis
          over the requisite service period of each vesting tranche of each award.
          The
          Company considers voluntary termination behavior as well as trends of actual
          option forfeitures when estimating the forfeiture rate.
 
 The
          Company measures compensation expense for its non-employee stock-based
          compensation under the Financial Accounting Standards Board (FASB) Emerging
          Issues Task Force (EITF) Issue No. 96-18, “*Accounting for Equity Instruments
          that are Issued to Other Than Employees for Acquiring, or in Conjunction
          with
          Selling, Goods or Services*”.  The fair value of the option issued
          is used to measure the transaction, as this is more reliable than the fair
          value
          of the services received.  The fair value is measured at the value of
          the Company’s common stock on the date that the commitment for performance by
          the counterparty has been reached or the counterparty’s performance is complete.
          The fair value of the equity instrument is charged directly to compensation
          expense and additional paid-in capital.
  13
  **UNITED
              AMERICAN CORPORATION**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                      2-**
                  **SUMMARY
                      OF SIGNIFICANT ACCOUNTING POLICIES**(CONTINUED)****
 **Segment
          Information**
 
 The
          Company follows the provisions of SFAS No. 131, “*Disclosures about Segments
          of an Enterprise and Related Information”*. This standard requires that
          companies disclose operating segments based on the manner in which management
          disaggregates the Company in making internal operating decisions. Commencing
          with the creation of Teliphone, Inc. the Company began operating in two
          segments, and three geographical locations.
 
 **Recent
          Accounting Pronouncements**
 
 In
          May
          2005, the FASB issued Statement of Financial Accounting Standard No. 154,
          *“Accounting Changes and Error Corrections”* (“SFAS 154”). SFAS 154 is a
          replacement of APB No. 20, *“Accounting Changes”*, and SFAS No. 3,
*“Reporting Accounting Changes in Interim Financial Statements”*. SFAS
          154 applies to all voluntary changes in accounting principle and changes
          the
          requirements for accounting and reporting of a change in accounting principle.
          This statement establishes that, unless impracticable, retrospective application
          is the required method for reporting of a change in accounting principle
          in the
          absence of explicit transition requirements specific to the newly adopted
          accounting principle. It also requires the reporting of an error correction
          which involves adjustments to previously issued financial statements similar
          to
          those generally applicable to reporting an accounting change retrospectively.
          SFAS 154 is effective for accounting changes and corrections of errors
          made in
          fiscal years beginning after December 15, 2005. The adoption of SFAS 154
          has not
          had a material impact on its condensed consolidated financial
          statements.
 
 In
          February 2006, the FASB issued Statement of Financial Accounting Standard
          No.
          155, *“Accounting for Certain Hybrid Instruments”* (“SFAS 155”). FASB 155
          allows financial instruments that have embedded derivatives to be accounted
          for
          as a whole (eliminating the need to bifurcate the derivative from its host)
          if
          the holder elects to account for the whole instrument on a fair value basis.
          This statement is effective for all financial instruments acquired or issued
          after the beginning of an entity’s first fiscal year that begins after September
          15, 2006. The adoption of SFAS 155 has not had a material impact on its
          condensed consolidated financial statements.
 
 In
          September 2006, the FASB issued SFAS 157, “Fair Value Measurements.” This
          standard defines fair value, establishes a framework for measuring fair
          value in
          generally accepted accounting principles, and expands disclosure about
          fair
          value measurements. This statement is effective for financial statements
          issued
          for fiscal years beginning after November 15, 2007. Early adoption is
          encouraged. The adoption of SFAS 157 has not had a material impact on its
          condensed consolidated financial statements.
  14
  **UNITED
                AMERICAN CORPORATION**
 **NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
                30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                        2-**
                    **SUMMARY
                        OF SIGNIFICANT ACCOUNTING POLICIES**(CONTINUED)****
 **Recent
          Accounting Pronouncements(Continued)**
 
 In
          September 2006, the FASB issued SFAS 158, “Employers’ Accounting for Defined
          Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
          87, 88, 106 and 132(R)” (“SFAS 158”). SFAS 158 requires an employer to recognize
          the over-funded or under-funded status of a defined benefit postretirement
          plan
          (other than a multiemployer plan) as an asset or liability in its statement
          of
          financial position and to recognize changes in that funded status in the
          year in
          which the changes occur through comprehensive income. SFAS 158 also
          requires the measurement of defined benefit plan assets and obligations
          as of
          the date of the employer’s fiscal year-end statement of financial position (with
          limited exceptions). The adoption of SFAS 158 has not had a material impact
          on
          its condensed consolidated financial statements.
 
 In
          February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
          Assets and Financial Liabilities – Including an amendment of FASB Statement No.
          115”, (“FAS 159”) which permits entities to choose to measure many financial
          instruments and certain other items at fair value at specified election
          dates. A
          business entity is required to report unrealized gains and losses on items
          for
          which the fair value option has been elected in earnings at each subsequent
          reporting date. This statement is expected to expand the use of fair value
          measurement. FAS 159 is effective for financial statements issued for fiscal
          years beginning after November 15, 2007, and interim periods within those
          fiscal
          years. The adoption of SFAS 159 has not had a material impact on its condensed
          consolidated financial statements.
 
 In
          July
          2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
          Uncertainty in Income Taxes.” This interpretation requires recognition and
          measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December
          15,
          2006. The adoption of FIN No. 48 has not had a material impact on its condensed
          consolidated financial statements.
 
 In
          September 2006, the United States Securities and Exchange Commission (“SEC”)
          issued SAB 108, “Considering the Effects of Prior Year Misstatements when
          Quantifying Misstatements in Current Year Financial Statements.”
 
 This
          SAB
          provides guidance on the consideration of the effects of prior year
          misstatements in quantifying current year misstatements for the purpose
          of a
          materiality assessment. SAB 108 establishes an approach that requires
          quantification of financial statement errors based on the effects of each
          of the
          company’s financial statements and the related financial statement disclosures.
          SAB 108 permits existing public companies to record the cumulative effect
          of
          initially applying this approach in the first year ending after November
          15,
          2006 by recording the necessary correcting adjustments to the carrying
          values of
          assets and liabilities as of the beginning of that year with the offsetting
          adjustment recorded to the opening balance of retained earnings. Additionally,
          the use of the cumulative effect transition method requires detailed disclosure
          of the nature and amount of each individual error being corrected through
          the
          cumulative adjustment and how and when it arose. The adoption of SAB 108
          has not
          had a material impact on its condensed consolidated financial
          statements.
  15
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    3-**
                **FIXED
                    ASSETS**
 
 Fixed
          assets as of September 30, 2007 were as follows:
 
 **Estimated**
                  **Useful**
                ****
                ****
                ****
                ********
                ****
                **Lives
                    (Years)**Computer
                    equipment
                
                
                5
                
                
                $
                1,172,524Furniture
                    and fixtures
                
                
                5
                
                
                
                2,334Vehicle
                
                
                5
                
                
                
                20,8491,195,707Less:
                    accumulated depreciation
                
                
                
                
                
                
                (845,954
                )Fixed
                    assets, net
                
                
                
                
                
                $
                349,753
 
 There
                    was $178,931 and $184,700 depreciation charged to operations
                    for the nine
                    months ended September 30, 2007 and 2006,
                    respectively.
  **NOTE
                    4-**
                **RELATED
                    PARTY LOANS AND
                    TRANSACTIONS**
 
 On
          August
          1, 2006, the Company converted $421,080 of the $721,080 of its loans receivable
          into Teliphone Corp. (formerly OSK Capital II Corp) common stock.  The
          $300,000 remaining on the loan has become interest bearing at 12% per annum,
          payable monthly with a maturity date of August 1, 2009. No interest has
          been
          paid since the $300,000 became interest bearing. The Company has recognized
          $42,000 of interest receivable through September 30, 2007.  In
          addition, there are approximately $152,563 of non-interest bearing loans
          that
          were incurred after August 2006.  These loans are considered as
          advances and are not interest bearing and due upon demand.
 
 The
          Company had loans with various directors and companies that are related
          to those
          directors that were non-interest bearing. There was $162,049 outstanding
          as of
          September 30, 2007. These loans are short-term in nature.
 
 The
          Company has expensed $78,203 and $28,453 in interest expense for the nine
          months
          ended September 30, 2007 and 2006, respectively.
 
 The
          Company paid commissions to a company with common ownership in the amount
          of
          $102,206 and $208,597 in the nine months ended September 30, 2007 and 2006,
          respectively.
  16
 **UNITED
              AMERICAN CORPORATION**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    5-**
                **CONVERTIBLE
                    DEBENTURES**
 
 On
          October 18, 2004, the Company entered into 12% Convertible Debentures (the
          “Debentures”) with Strathmere Associates International Limited (“Strathmere”) in
          the amount of $100,000. The Debentures had a maturity date of October 18,
          2006,
          and incurred interest at a rate of 12% per annum, payable every six
          months.
 
 On
          November 14, 2006, the Company and Strathmere agreed to extend the maturity
          date
          to October 31, 2007, while maintaining the same interest rate of 12% per
          annum,
          payable every month.
 
 Subsequently
          on October 30, 2007, the Company and Strathmere agreed to extend the maturity
          date to October 31, 2008, while maintaining the same interest rate of 12%
          per
          annum, payable every month.
 
 The
          Debentures can either be paid to the holders on October 31, 2008 or converted
          at
          the holders’ option any time up to maturity at a conversion price equal of
          $0.055 per share (the original conversion rate was $.20 per share). The
          convertible debentures met the definition of hybrid instruments, as defined
          in
          SFAS 133, *Accounting for Derivative Instruments and Hedging Activities*
          (SFAS No. 133). The hybrid instruments are comprised of a i) a debt instrument,
          as the host contract and ii) an option to convert the debentures into common
          stock of the Company, as an embedded derivative. The embedded derivative
          derives
          its value based on the underlying fair value of the Company’s common stock. The
          Embedded Derivative is not clearly and closely related to the underlying
          host
          debt instrument since the economic characteristics and risk associated
          with this
          derivative are based on the common stock fair value. The Company has separated
          the embedded derivative from the hybrid instrument based on an independent
          valuation.
 
 For
          disclosure purposes, the fair value of the derivative is estimated on the
          date
          of issuance of the debenture (October 18, 2004), with the following
          weighted-average assumptions used for September 30, 2007 and 2006; no annual
          dividends, volatility of 125%, risk-free interest rate of 3.28%, and expected
          life of 1 year. For disclosure purposes as of September 30, 2007 the derivative
          call option was approximately $0.0132 per share.
 
 The
          embedded derivative did not qualify as a fair value or cash flow hedge
          under
          SFAS No. 133.
 
 Interest
          expense for the nine months ended September 30, 2007 and 2006 was approximately
          $9,000 for each period. At September 30, 2007, there was no interest
          accrued.
  17
 **UNITED
              AMERICAN CORPORATION**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    6-**
                **COMMITMENTS**
 
 **Operating
          Lease**
 
 The
          Company has entered into operating lease agreements which mature between
          November 11, 2008 and December 19, 2009. Minimum rentals for the next three
          years and in the aggregate are:
  **Year
                      Ending**
                  ****
                  ****
                  ******December
                      31,**2007
                      (3 months)
                  
                  $
                  8,0572008
                  
                  
                  31,6552009
                  
                  
                  23,229**Total**
                  
                  $
                  62,941
  **NOTE
                    7-**
                **STOCKHOLDERS’
                    EQUITY (DEFICIT)**
 
 **Common
          Stock**
 
 As
          of
          September 30, 2007, the Company has 100,000,000 shares of common stock
          authorized with a par value of $.001. The Company’s shareholders approved an
          increase of 50,000,000 authorized shares from 50,000,000 to 100,000,000
          shares
          on October 23, 2006.
 
 The
          Company has 51,079,985 shares issued and outstanding as of September 30,
          2007.
 
 The
          Company has not issued any shares in the nine months ended September 30,
          2007.
 
 During
          the year ended December 31, 2006, the Company issued 1,110,000 for services
          at
          $.06 per share for a value of $66,600.
 
 **Stock
          Options and Warrants**
 
 The
          Company has not issued any options or warrants.
  18
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    8-**
                **PROVISION
                    FOR INCOME TAXES**
 
 Deferred
          income taxes are determined using the liability method for the temporary
          differences between the financial reporting basis and income tax basis
          of the
          Company’s assets and liabilities.  Deferred income taxes are measured
          based on the tax rates expected to be in effect when the temporary differences
          are included in the Company’s tax return.  Deferred tax assets and
          liabilities are recognized based on anticipated future tax consequences
          attributable to differences between financial statement carrying amounts
          of
          assets and liabilities and their respective tax bases.
 
 At
          September 30, 2007, deferred tax assets consist of the
          following:
 
 Net
                      operating
                      losses
                  
                  $
                  1,587,800Valuation
                      allowance
                  
                  
                  (1,587,800
                  )$
                  -
 
 At
          September 30, 2007, the Company had a net operating loss carryforwards
          of
          approximately $4,670,00, available to offset future taxable income through
          2027.  The Company established valuation allowances equal to the full
          amount of the deferred tax assets due to the uncertainty of the utilization
          of
          the operating losses in future periods.
 
 A
          reconciliation of the Company’s effective tax rate as a percentage of income
          before taxes and federal statutory rate for the nine months ended September
          30,
          2007 and 2006 is summarized as follows:
  **2007**
                ****
                ****
                **2006**Federal
                    statutory rate
                
                
                (34.0
                )%
                
                
                (34.0
                )%State
                    income taxes, net of federal benefits
                
                
                0.0
                
                
                
                0.0Valuation
                    allowance
                
                
                34.0
                
                
                
                34.00
                %
                
                
                0
                %
  19
 **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    10-**
                **SPIN-OFF
                    OF TELIPHONE CORP.**
 
 On
          October 23, 2006, the Company’s shareholders voted in the majority to spin-off
          its entire holdings of 25,737,785 shares of the common stock of Teliphone
          Corp.
          with an effective date of October 30, 2006. In accordance with APB 29,
          “Accounting for Nomonetary Transactions”, the Company distributed the capital
          stock they owned in Teliphone Corp. to their stockholders (a “spin-off”). As a
          result, the Company recognized the value of the assets and liabilities
          spun-out
          based on the respective recorded amounts after reduction for any impairment
          of
          value due to the fact that this was a nonreciprocal transfer to owners.
          As noted
          in the chart below, the net result was $580,955 recognized as contributed
          capital, an increase to the Company’s additional paid in capital at October 30,
          2006, due to the Company’s shareholders receipt of common shares of a Company
          that had net liabilities as of the date of spin-off. In addition, the Company’s
          minority interest of $232,659 were adjusted to earnings in the
          spin-off.
 
 Balances
                      of Teliphone Corp. at
                      October 30, 2006:Cash
                  
                  $
                  (8,710
                  )Accounts
                      receivable
                  
                  
                  18,885Inventory
                  
                  
                  12,512Other
                      assets
                  
                  
                  142,007Fixed
                      assets
                  
                  
                  97,484Loans
                      payable
                  
                  
                  (363,415
                  )Accounts
                      payable and accrued
                      expenses
                  
                  
                  (126,125
                  )Current
                      notes payable -
                      related
                  
                  
                  (155,005
                  )Deferred
                      revenue
                  
                  
                  (10,720
                  )Other
                      payables
                  
                  
                  (187,868
                  )$
                  (580,955
                  )
  20
  **UNITED
              AMERICAN CORPORATION**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    11-**
                **SEGMENT
                    INFORMATION**
 
 The
          Company’s reportable operating segments include wholesale VoIP services which is
          the physical buying of minutes (3894517 Canada Inc.) over brokered routes
          and
          direct routes.  A brokered route is one where the Company purchases
          from a supplier who has direct termination capabilities with the local
          wireline
          and mobile operators in the country and re-sell the termination destination to
          the Company’s customers.  A direct route is when the Company has the
          ability to directly terminate the traffic with the local wireline and mobile
          operators, such as the Company’s direct routes in Mali, Gabon and Cameroon,
          Africa.,  During 2006, the Company also recorded retail
          interconnection services through its majority owned subsidiary Teliphone
          Corp
          (Formerly OSK Capital II Corp.).  These revenues and expenses are
          listed below for the consolidation period from January 1, 2006 to October
          30,
          2006 only, as the Company spun off its holdings of Teliphone Corp. to its
          shareholders on October 30, 2006.  The Company also has corporate
          overhead expenses. The wholesale direct route services are essentially
          provided
          in Africa, and the wholesale brokered route services are supplied to customers
          in North America. The segment data presented below details the allocation
          of
          cost of revenues and direct operating expenses to these segments.
 
 Operating
          segment data for the nine months ended September 30, 2007 are as
          follows:
 
 ****
                ****
                **Wholesale**
                ****
                ****
                **Wholesale**
                ****
                ****
                ****
                ****
                ****
                ****
                ********
                ****
                ****
                ****
                ****
                **Services**
                ****
                ****
                **Services**
                ****
                ****
                **Connection**
                ****
                ****
                ****
                ********
                ****
                **Corporate**
                ****
                ****
                **Brokered**
                ****
                ****
                **Direct**
                ****
                ****
                **Services**
                ****
                ****
                **Total**Sales
                
                
                
                
                $
                20,407,449
                
                
                $
                801,838
                
                
                $
                -
                
                
                $
                21,209,287Cost
                    of sales
                
                
                
                
                
                18,954,175
                
                
                
                51,642
                
                
                
                -
                
                
                
                19,005,817Gross
                    profit
                
                
                
                
                
                1,453,274
                
                
                
                750,196
                
                
                
                -
                
                
                
                2,203,470Operating
                    expenses
                
                
                339,888
                
                
                
                1,101,828
                
                
                
                46,438
                
                
                
                -
                
                
                
                1,488,154Depreciation,
                    amortization and impairment
                
                
                
                
                
                
                178,931
                
                
                
                -
                
                
                
                -
                
                
                
                178,931Interest
                    (net) and other
                
                
                35,803
                
                
                
                (76,663
                )
                
                
                (28,540
                )
                
                
                -
                
                
                
                (69,400
                )Net
                    income (loss)
                
                
                (304,085
                )
                
                
                95,852
                
                
                
                675,218
                
                
                
                -
                
                
                
                466,985Segment
                    assets
                
                
                
                
                
                
                2,440,598
                
                
                
                251,775
                
                
                
                -
                
                
                
                2,692,373Fixed
                    Assets, net of depreciation
                
                
                
                
                
                
                145,873
                
                
                
                203,880
                
                
                
                -
                
                
                
                349,753
 
 Operating
          segment data for the nine months ended September 30, 2006 are as
          follows:
  ****
                ****
                **Wholesale**
                ****
                ****
                **Connection**
                ****
                ****
                ****
                ********
                ****
                **Corporate**
                ****
                ****
                **Services**
                ****
                ****
                **Services**
                ****
                ****
                **Total**Sales
                
                $
                -
                
                
                $
                10,499,030
                
                
                $
                339,163
                
                
                $
                10,838,193Cost
                    of sales
                
                
                -
                
                
                
                9,393,932
                
                
                
                234,584
                
                
                
                9,628,516Gross
                    profit (loss)
                
                
                -
                
                
                
                1,105,098
                
                
                
                104,579
                
                
                
                1,209,677Operating
                    expenses
                
                
                99,065
                
                
                
                725,392
                
                
                
                421,734
                
                
                
                1,246,191Depreciation,
                    amortization and impairment
                
                
                133,830
                
                
                
                14,660
                
                
                
                36,210
                
                
                
                184,700Interest
                    (net)
                
                
                (9,000
                )
                
                
                (647
                )
                
                
                (18,806
                )
                
                
                (28,453
                )Net
                    income (loss)
                
                
                (241,895
                )
                
                
                364,399
                
                
                
                (372,171
                )
                
                
                (249,667
                )Segment
                    assets
                
                
                312,270
                
                
                
                1,009,545
                
                
                
                167,335
                
                
                
                1,489,150Fixed
                    Assets, net of depreciation
                
                
                312,270
                
                
                
                145,985
                
                
                
                115,081
                
                
                
                573,336
  21
  **UNITED
            AMERICAN CORPORATION**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007 AND 2006 (UNAUDITED)**
 **NOTE
                    11-**
                **SEGMENT
                    INFORMATION
                    (CONTINUED)**
 
 In
          addition, the segment data broken out by geographical location for the
          nine
          months ended September 30, 2007 are as follows:
 
 **North,
                    Central**
                ****
                ****
                **Europe,
                    Middle**
                ****
                ****
                ****
                ****
                ****
                ****
                ********
                ****
                **and
                    South**
                ****
                ****
                **East
                    and**
                ****
                ****
                ****
                ****
                ****
                ****
                ********
                ****
                **America**
                ****
                ****
                **Africa**
                ****
                ****
                **Asia**
                ****
                ****
                **Total**Sales
                
                $
                2,896,407
                
                
                $
                17,677,457
                
                
                $
                635,423
                
                
                $
                21,209,287Cost
                    of sales
                
                
                2,595,494
                
                
                
                15,840,915
                
                
                
                569,408
                
                
                
                19,005,817Gross
                    profit (loss)
                
                
                300,913
                
                
                
                1,836,542
                
                
                
                66,015
                
                
                
                2,203,470Operating
                    expenses
                
                
                203,227
                
                
                
                1,240,342
                
                
                
                44,585
                
                
                
                1,488,154Depreciation,
                    amortization and impairment
                
                
                24,435
                
                
                
                149,135
                
                
                
                5,361
                
                
                
                178,931Interest
                    (net) and other
                
                
                (9,477
                )
                
                
                (57,843
                )
                
                
                (2,079
                )
                
                
                (69,400
                )Net
                    income (loss)
                
                
                63,773
                
                
                
                389,221
                
                
                
                13,991
                
                
                
                466,985Segment
                    assets
                
                
                367,679
                
                
                
                2,244,032
                
                
                
                80,663
                
                
                
                2,692,373Fixed
                    Assets, net of depreciation
                
                
                47,763
                
                
                
                291,511
                
                
                
                10,478
                
                
                
                349,753
 
 The
          geographical location segmentation information for the nine months ended
          September 30, 2006 is as follows:
 
 **North,
                    Central**
                ****
                ****
                **Europe,
                    Middle**
                ****
                ****
                ****
                ****
                ****
                ****
                ********
                ****
                **and
                    South**
                ****
                ****
                **East
                    and**
                ****
                ****
                ****
                ****
                ****
                ****
                ********
                ****
                **America**
                ****
                ****
                **Africa**
                ****
                ****
                **Asia**
                ****
                ****
                **Total**Sales
                
                $
                4,123,832
                
                
                $
                4,130,807
                
                
                $
                2,583,554
                
                
                $
                10,838,193Cost
                    of sales
                
                
                3,663,561
                
                
                
                3,669,758
                
                
                
                2,295,197
                
                
                
                9,628,516Gross
                    profit (loss)
                
                
                460,271
                
                
                
                461,049
                
                
                
                288,357
                
                
                
                1,209,677Operating
                    expenses
                
                
                474,164
                
                
                
                474,966
                
                
                
                297,061
                
                
                
                1,246,191Depreciation,
                    amortization and impairment
                
                
                70,277
                
                
                
                70,396
                
                
                
                44,027
                
                
                
                184,700Interest
                    (net)
                
                
                (10,826
                )
                
                
                (10,844
                )
                
                
                (6,783
                )
                
                
                (28,453
                )Net
                    income (loss)
                
                
                (94,996
                )
                
                
                (95,197
                )
                
                
                (59,514
                )
                
                
                (249,667
                )Segment
                    assets
                
                
                566,608
                
                
                
                567,566
                
                
                
                354,976
                
                
                
                1,489,150Fixed
                    Assets, net of depreciation
                
                
                218,149
                
                
                
                218,518
                
                
                
                136,669
                
                
                
                573,336
 
 **NOTE
                    12-**
                **DISSOLUTION
                    OF WHOLLY OWNED
                    SUBSIDIARY**
 
 On
          July
          1, 2007, the Company dissolved its wholly-owned subsidiary 3894517 Canada
          Inc.
          as it no longer required the Canadian operating subsidiary for banking
          operations.  The Company established its own banking operations in the
          State of Florida.  There are no changes to the consolidated financial
          statements due to the dissolution.
 
 **NOTE
                    13-**
                **CREATION
                    OF WHOLLY OWNED
                    SUBSIDIARY**
 
 On
          August
          20, 2007, the Company created a wholly-owned subsidiary United American
          Telecom,
          Inc., (“UAT”) a Florida company.  Current and Capital assets from our
          former subsidiary 3894517 Canada Inc., as well as Current Liabilities have
          been
          transferred to UAT.  UAT serves as the telecommunications operations
          of the Company.
 22




**Item
        2.     Management’s Discussion and
        Analysis**
 
 **Forward-Looking
        Statements**
 
 Certain
        statements, other than purely historical information, including estimates,
        projections, statements relating to our business plans, objectives, and expected
        operating results, and the assumptions upon which those statements are based,
        are “forward-looking statements” within the meaning of the Private Securities
        Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
        and Section 21E of the Securities Exchange Act of
        1934.   These forward-looking statements generally are identified
        by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
        continue,” “will likely result,” and similar expressions.  We intend such forward-looking
        statements to be covered by
        the safe-harbor provisions for forward-looking statements contained in the
        Private Securities Litigation Reform Act of 1995, and are including this
        statement for purposes of complying with those safe-harbor
        provisions.Forward-looking statements are based on current
        expectations and assumptions that are subject to risks and uncertainties
        which
        may cause actual results to differ materially from the forward-looking
        statements. Our ability to predict
        results or the actual effect of future plans or strategies is inherently
        uncertain.  Factors which could have a material adverse affect on our
        operations and future prospects on a consolidated basis include, but are
        not
        limited to: changes in economic conditions, legislative/regulatory changes,
        availabilityof
        capital, interest rates, competition,
        and generally accepted accounting principles. These risks and uncertainties
        should also be considered in evaluating forward-looking statements and undue
        reliance should not be placed on such statements.We undertake
        no obligation to update or revise publicly any forward-looking statements,
        whether as a result of new information, future events or
        otherwise.  Further
        information concerning our business, including additional factors that could
        materially affect our financial results, is included
        herein and in
        our other filings with the SEC.
 
 **Overview**
 
 We
        were
        incorporated under the laws of the State of Florida on July 17, 1992 under
        the
        name American Financial Seminars, Inc. On February 5, 2004, our name was
        changed
        to United American Corporation. On July 18, 2003, we entered into a share
        exchange agreement with 3874958 Canada Inc. (a Canadian corporation and an
        affiliate of the Company by common officers) to transfer 26,250,000 shares
        of
        its common stock for 100 shares of American United Corporation (a Delaware
        corporation and wholly owned subsidiary of 3874958 Canada Inc.) which
        represented 100% of the outstanding shares of American United Corporation.
        In
        this transaction we acquired internet telecommunications equipment valued
        at
        $874,125 which we utilized to provide VoIP (Voice-over-Internet-Protocol)
        telecommunications services to wholesale providers worldwide.
 
 Our
        revenues are derived primarily from the sale of international call termination
        services to wholesale customers. We also sold local call termination services
        to
        retail customers in the domestic North American market, but have since ceased
        this area of our business since we completed the spin-off of our majority-owned
        subsidiary, Teliphone Corp., on October 30, 2006.
  23
  Our
        management believes that we can successfully operate within the Wholesale
        Telecommunications Market as a result of the following:
 
 ·
              There
                  is a natural migration in the wholesale telecommunications marketplace
                  to
                  utilize the internet as the main network between telecommunications
                  carriers due to its lower cost of operation than traditional networks.
                  We
                  specialize in the deployment of internet-based
                  technologies.
 
 ·
              Developing
                  nations, primarily in Africa, Latin and South America, are confronted
                  with
                  the need to upgrade their telecommunications technologies resulting
                  in a
                  need for support in this venture over the next 3-5 years, producing
                  solid
                  opportunities for us to leverage our knowledge in order to solidify
                  long
                  term consulting mandates and direct route termination capabilities
                  with
                  these countries.
 
 We
        constructed our first VoIP network which we refer to as CaribbeanONE. To
        construct this network, we established servers in Haiti that utilize our
        intellectual property to connect with our servers located in Montreal, Quebec,
        Canada. Following the successful testing of our servers in Haiti, the
        CaribbeanONE network was completed in March 2004. The establishment of the
        CaribbeanONE network was critical in that it enabled us to charge significantly
        less than other providers that exclusively utilize established telecommunication
        lines for calls that originate in North America and terminate in any country
        in
        the Caribbean. When one of our consumers originated a call in North America,
        our
        VoIP network received the call and transmitted the call to our server in
        Haiti.
        An established telecommunication line was then utilized to transmit the call
        from our server in Haiti to the termination point of the call in the Caribbean.
        The establishment of the CaribbeanONE network was our first step in
        strategically establishing computer servers in specified geographical areas
        to
        construct an international VoIP network.
 
 In
        May
        2006, we were forced to terminate our CarribbeanOne network due to political
        changes with government telecommunications regulators in Haiti, the hosting
        site
        of our gateway, resulting in our inability to acquire local termination minutes
        to direct a call from our gateway to its destination point within Haiti.
        We were
        unsuccessful in our efforts to acquire local termination minutes within Haiti.
        As a result, we no longer utilize our CarribbeanOne network and have focused
        our
        operations on other gateways recently developed.
 
 As
        part
        of our growth plan, we expanded our long distance VoIP termination services
        outside of the Caribbean and into additional routes in Africa. During the
        third
        quarter of 2005, we built a VoIP gateway in Gabon, Africa. Similar to our
        CaribbeanONE infrastructure located in Haiti, we offered wholesale termination
        services to global Tier 1 and Tier 2 telecommunications companies to utilize
        our
        VoIP link between Montreal, Canada and Gabon in order to terminate their
        long
        distance calls. This gateway installation permitted us to expand the number
        of
        voice channels that we had in operation in our global network and sell more
        long
        distance termination minutes to our existing and future customers.
  24
  We
        further expanded our network by entering into a partnership with Tectacom
        Inc.
        of Montreal and established a VoIP gateway in Mali, Africa in May of 2006.
        As a
        result, we established a profit-sharing understanding with Tectacom for VoIP
        long distance termination minutes transiting through our gateways. Tectacom
        held
        an agreement with the government-operated telecommunications provider in
        Mali,
        permitting them to reserve voice channel capacity within the Mali
        telecommunications infrastructure. The government-operated telecommunications
        provider in Mali owns all local landlines within the country and approximately
        40% of cellular telephone services provided in the country. This agreement
        permitted us access to install our gateways and to interconnect the Mali
        voice
        channels operated by the government-owned telecommunications provider with
        our
        servers in Montreal. This agreement further enabled us to sell this direct
        route
        connection to our customers in order for them to offer long distance services
        to
        their respective retail customer bases.
 
 In
        October 2006, we entered into an agreement with the government-operated
        telecommunications provider in Mali to assist it in identifying the origination
        point of calls utilizing its voice channels. Identifying the original point
        of a
        telephone call is important because it will enable the provider to prohibit
        unauthorized use of its network which is commonly achieved by disguising
        the
        original point of a telephone call. In exchange for providing this service,
        we
        received more favorable pricing for our use of its voice channels.
 
 In
        November 2006, we again further expanded our network by building a VoIP gateway
        in Cameroon, Africa.
 
 On
        December 6, 2006, we entered into an Agreement with Gabon Telecom, a
        government-operated telecommunications provider in Gabon, primarily for the
        purposes of assisting Gabon Telecom in regulating its international
        telecommunications traffic in order to prevent abuse of its existing agreements
        created by unauthorized use of its voice channels and failure to make payment.
        This Agreement enabled us to offer termination services through our VoIP
        gateway
        in Gabon. This Agreement was for a period of 5 years and renewable upon mutual
        agreement of the parties.
 
 The
        Mali,
        Gabon and Cameroon, Africa networks all commenced service during the year
        ended
        December 31, 2006. Due to frequently changing political conditions within
        each
        of these African nations, we have experienced difficulty enforcing the terms
        of
        our prior negotiated agreements. The current governments in these countries
        are
        not honoring the existing agreements described above in which we acquired
        termination routes within the country. For this reason, in February 2007
        we were
        forced to suspend our direct African route operations in Mali, Gabon and
        Cameroon. We are working to restore these networks to operational status
        in
        2007, but we can provide no assurance that we will be successful in
        reestablishing the Mali, Gabon and Cameroon networks. We anticipate that
        our
        failure to provide termination services in Mali, Gabon and Cameroon through
        our
        VoIP networks will significantly harm our business and results of operations
        in
        2007.
 
 In
        July
        of 2007, we began the process of dissolution of our Canadian operating entity
        3894517 Canada Inc. and proceeded with the creation of our new operating
        subsidiary United American Telecom, Inc. (“UAT”) on August 20,
        2007.  All telecom operations have been consolidated into UAT
        effective October 2007.
  25
 
 During
        the third and fourth quarters of 2007, we are focusing our efforts on adding
        further routes in countries that do not present that same political risks
        and
        instability associated with our operations in Mali, Gabon and Cameroon,
        Africa.
 
 **Results
        of Operations for the nine and three months ended September 30, 2007 and
        2006**
 
 For
        the
        three months ended September 30, 2007, we generated total revenue of $8,039,237,
        compared to revenue of $6,490,857 for the three months ended September 30,
        2006.
        Our total revenue reported for the nine months ended September 30, 2007 was
        $21,209,287, compared to revenue of $10,838,193 for the nine months ended
        September 30, 2006. Our revenue was generated by sales of retail domestic
        and
        international voice and data products and services using VoIP.  Our
        increase in revenue for the three and nine months ended September 30, 2007
        when
        compared to the same reporting period in the prior year is primarily
        attributable to increases in sales of VoIP termination services in
        our  brokered international telecom routes. A brokered route is one
        where we purchase from a supplier who has direct termination capabilities
        with
        the local wireline and mobile operators in the country and re-sell the
        termination destination to our customers. A direct route is when we have
        the
        ability to directly terminate the traffic with the local wireline and mobile
        operators, such as our direct routes in Mali, Gabon and Cameroon,
        Africa.  Our ability to generate future revenues from the sale of
        direct routes has been significantly impaired as a result of the suspension
        of
        our Mali, Gabon, and Cameroon networks.
 
 During
        the nine months ended September 30, 2007, $20,407,449  of revenues
        were attributed to our brokered routes and $801,838 of revenues were attributed
        to our direct routes, as compared to the nine months ended September 30,
        2006
        where $0.00 of revenues were generated from brokered routes and $10,499,030
        were
        generated from direct routes.
 
 Our
        cost
        of sales for the three months ended September 30, 2007 was $7,690,158 a 32%
        increase from $5,832,730 for the three months ended September 30, 2006. Our
        cost
        of sales for the nine months ended September 30, 2007 was $19,005,817, a
        98%
        increase from $9,628,516 for the nine months ended September 30, 2006. The
        increase in cost of sales is primarily attributable to increased sales of
        brokered routes in the reporting period. Our lack of inventory purchase for
        the
        three months and nine months periods are due to our no longer consolidating
        Teliphone Corp, formerly majority-owned subsidiary and spun off on October
        30,
        2006.
 
 We
        incurred operating expenses in the amount of $331,600 for the three months
        ended
        September 30, 2007, compared to $603,073 for the three months ended September
        30, 2006. We incurred operating expenses in the amount of $1,667,085 for
        the
        nine months ended September 30, 2007, compared to $1,430,891 for the nine
        months
        ended September 30, 2006. The increase in our operating expenses is primarily
        attributable to increases in commissions paid on the increased revenues as
        well
        as increases in management fees. As a result of spinning-off our majority-owned
        subsidiary, Teliphone Corp, on October 30, 2006, there will be no further
        consolidation of their results of operations. We paid $160,285 in commissions
        and wages and management fees for the three months ended September 30, 2007,
        compared to $379,839 for the three months ended September 30, 2006.  We
        paid $1,052,665 in commissions and wages and management fees for the nine
        months
        ended September 30, 2007, compared to $821,408 for the nine months ended
        September 30, 2006. We paid commissions and management fees based upon sales
        of
        VoIP termination services. As a result of a significant increase in the sales
        of
        VoIP termination services, our commission and management fees paid
        correspondingly increased.
  26
  Our
        net
        income for the three months ended September 30, 2007 was $3,816, compared
        to a
        net income of $107,562 in the prior year. Net income for the nine months
        ended
        September 30, 2007 was $466,985, compared to a net loss of $137,513 for the
        nine
        months ended September 30, 2006. The reporting of net income during the nine
        and
        three months ended September 30, 2007 was primarily attributable to increased
        sales with a higher profit margin.
 
 **Liquidity
        and Capital Resources**
 
 As
        of
        September 30, 2007, we had current assets of $2,342,620. Our current assets
        consisted of cash and cash equivalents of $58,016, accounts receivable in
        the
        amount of $1,776,716, a loan receivable from our now related party Teliphone
        Corp. (formerly majority-owned subsidiary until its spin-off on October 30,
        2006) of $452,563 and prepaid expenses and other current assets of $55,325.
        Our
        total current liabilities as of September 30, 2007 were $3,013,568. As a
        result,
        on September 30, 2007 we had working capital deficit of $670,948.
 
 Operating
        activities provided $553,925 in cash for the nine months ended September
        30,
        2007. Our positive net income was the primary component of our positive
        operating cash flow. Investing activities during the nine months ended September
        30, 2007 used $52,826, primarily for the acquisition of fixed assets. Cash
        flows
        used in financing activities during the nine months ended September 30, 2007
        primarily consisted of $430,876 for proceeds from loans payable- related
        parties. We primarily relied on revenues to fund our operations during the
        three
        and nine months ended September 30, 2007.
  As
        of
        September 30, 2007, our management believes that we have sufficient capital
        to
        support our operations at the current level over the next twelve months.
        The
        growth of our business is contingent upon us obtaining additional financing.
        We
        intend to fund operations through debt and/or equity financing arrangements,
        which may be insufficient to fund our capital expenditures, working capital,
        or
        other cash requirements for the year ending December 31, 2007. There can
        be no
        assurance that any additional financing will be available to us on acceptable
        terms, or at all. We do not have any formal commitments or arrangements for
        the
        sales of stock or the advancement or loan of funds at this time.
 
 **Off
        Balance Sheet Arrangements**
 
 As
        of
        September 30, 2007, there were no off balance sheet arrangements.
 
 **Going
        Concern**
 
 As
        shown
        in the accompanying consolidated financial statements the Company has started
        to
        show net $466,985 for the nine months ended September 30, 2007), but prior
        to
        this time, the Company had incurred significant  net losses, and
        accumulated a deficit of $5,287,392 through September 30, 2007 and has a
        working
        capital deficiency of $670,948 as of September 30, 2007.
  27
 
 Despite,
        the prior recurring losses, the Company has been successful in establishing
        distribution channels in Africa and generating significant revenue growth
        in the
        past nine months. There is no guarantee that the Company will be able to
        continue to grow at this pace, raise enough capital or generate revenues
        from
        other areas of the world to sustain its operations.  These conditions
        raise substantial doubt about the Company’s ability to continue as a going
        concern for a reasonable period.
 
 Management
        believes that the Company’s capital requirements will depend on many factors.
        These factors include the increase in sales through existing channels as
        well as
        the Company’s ability to continue to expand its customer base in the
        international telecommunications market.
 
 In
        the
        near term, the Company does not require additional financing to continue
        its
        operations as it has achieved a profitable level of operations. The Company’s
        ability to continue as a going concern for a reasonable period is dependent
        upon
        management’s ability to continue to achieve profitable
        operations.  There can be no assurance that management will be able to
        continue operations at a profitable level and hence, the Company would have
        to
        raise sufficient capital, under terms satisfactory to the Company, if at
        all
 
 **Critical
        Accounting Policies**
 
 In
        December 2001, the SEC requested that all registrants list their most “critical
        accounting polices” in the Management Discussion and Analysis. The SEC indicated
        that a “critical accounting policy” is one which is both important to the
        portrayal of a company’s financial condition and results, and requires
        management’s most difficult, subjective or complex judgments, often as a result
        of the need to make estimates about the effect of matters that are inherently
        uncertain. We believe that the following accounting policies fit this
        definition.
 
 **Revenue
        Recognition**
 
 In
        2004,
        when we emerged from the development stage with the acquisition of American
        United Corporation/3874958 Canada Inc. and after assuming ownership of 3894517
        Canada Inc., we began to recognize revenue from VoIP services when the services
        were rendered and collection was reasonably assured in accordance with SAB
        101.
 
 There
        are
        limited estimates required in connection with recognition of revenue because
        voice traffic is measured in automated switches and routers, and contractual
        rates for traffic are used to bill or declare revenue on a monthly basis.
        However, for certain voice contracts, historical traffic may be retroactively
        re-rated within a contract period. This traffic re-rating is calculated and
        recognized immediately in the month the new contractual rate is established.
        Although relatively infrequent, there can be material disputes with customers
        over volume or traffic recognized on our customers’ switches. Our practice is to
        maintain recorded revenue based on our traffic data until the merits of a
        dispute are identified.
  28
 
 **Impairment
        of Long-Lived Assets**
 
 Long-lived
        assets, primarily fixed assets, are reviewed for impairment whenever events
        or
        changes in circumstances indicate that the carrying amount of the assets
        might
        not be recoverable. We do not perform a periodic assessment of assets for
        impairment in the absence of such information or indicators. Conditions that
        would necessitate an impairment assessment include a significant decline
        in the
        observable market value of an asset, a significant change in the extent or
        manner in which an asset is used, or a significant adverse change that would
        indicate that the carrying amount of an asset or group of assets is not
        recoverable. For long-lived assets to be held and used, we recognize an
        impairment loss only if its carrying amount is not recoverable through its
        undiscounted cash flows and measures the impairment loss based on the difference
        between the carrying amount and estimated fair value. We, determined based
        upon
        an independent valuation performed on our equipment acquired from American
        United Corporation that there was impairment of $1,750,875 (on October 6,
        2003)
        based upon the fair value of the stock issued for the equipment. This amount
        is
        reflected as impairment in the December 31, 2003 financial statements. There
        has
        been no further impairment since this date.
 
 **Recently
        Issued Accounting Pronouncements**
 
 In
        February 2006, the FASB issued Statement of Financial Accounting Standard
        No.
        155, *“Accounting
        for Certain Hybrid Instruments”* (“SFAS 155”). FASB 155 allows financial
        instruments that have embedded derivatives to be accounted for as a whole
        (eliminating the need to bifurcate the derivative from its host) if the holder
        elects to account for the whole instrument on a fair value basis. This statement
        is effective for all financial instruments acquired or issued after the
        beginning of an entity’s first fiscal year that begins after September 15, 2006.
        We will evaluate the impact of SFAS 155 on our consolidated financial
        statements.
  In
        February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
        Assets and Financial Liabilities - Including an amendment of FASB Statement
        No.
        115”, (“FAS 159”) which permits entities to choose to measure many financial
        instruments and certain other items at fair value at specified election dates.
        A
        business entity is required to report unrealized gains and losses on items
        for
        which the fair value option has been elected in earnings at each subsequent
        reporting date. This statement is expected to expand the use of fair value
        measurement. FAS 159 is effective for financial statements issued for fiscal
        years beginning after November 15, 2007, and interim periods within those
        fiscal
        years.
 
 In
        July
        2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
        Uncertainty in Income Taxes.” This interpretation requires recognition and
        measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December
        15,
        2006. Management is still evaluating what effect this will have on our
        consolidated financial statements.
 
 Other
        recent accounting pronouncements issued by the FASB (including its Emerging
        Issues Task Force), the American Institute of Certified Public Accountants,
        and
        the SEC did not or are not believed by management to have a material impact
        on
        our present or future consolidated financial statements included elsewhere
        herein.
  29
 
 **Item
        3.     Controls and Procedures**
 
 Disclosure
        controls and procedures are controls and other procedures that are designed
        to
        ensure that information required to be disclosed in our reports filed or
        submitted under the Exchange Act are recorded, processed, summarized and
        reported, within the time periods specified in the SEC's rules and forms.
        Disclosure controls and procedures include, without limitation, controls
        and
        procedures designed to ensure that information required to be disclosed in
        our
        reports filed under the Exchange Act is accumulated and communicated to
        management, including our Chief Executive Officer and Chief Financial Officer,
        to allow timely decisions regarding required disclosure.
 
 We
        carried out an evaluation of the effectiveness of the design and operation
        of
        our disclosure controls and procedures (as defined in Exchange Act Rules
        13a-15(e) and 15d-15(e)) as of September 30, 2007.  This evaluation
        was carried out under the supervision and with the participation of our Chief
        Executive Officer and Chief Financial Officer, Mr. George
        Metrakos.  Based upon that evaluation, our Chief Executive Officer and
        Chief Financial Officer concluded that, as of September 30, 2007, our disclosure
        controls and procedures are not effective.  There have been no changes
        in our internal controls over financial reporting during the quarter ended
        September 30, 2007.
 
 In
        particular, management has identified certain limitations in specific
        critical controls in our accounting system that are increasingly resulting
        in
        lengthier time lapses required in order for us to accurately disclose our
        financial statements.  In particular, these lengthier time lapses occur for
        the following reasons:
 
 ·
              Lack
                  of dedicated resources to track and keep records of supplier invoices
                  on a
                  daily basis;
 ·
              Lack
                  of dedicated resources to track and keep records of daily disbursements
                  against these invoices;
 ·
              Surplus
                  accounting entries required to track intercompany expenses, post
                  spin-off
                  of our majority-owned subsidiary, Teliphone Corp.;
                  and
 ·
              Lack
                  of a dedicated resource person to oversee daily record
                  keeping.
  Management
        has hired an additional resource within the Company to begin to document
        internal controls and procedures for them to be audited as per Item 404 for
        small business filers.  We anticipate that we will meet Internal
        Controls and Procedures audit requirements for our Anmnual Report dated December
        31, 2007.  This resource dedication will result in the Company
        incurring additional costs which will affect the Company’s profitability
        going forward.  The Company's management anticipates that these costs
        will be up to $50,000 per year in order to maintain compliance with timely
        financial reporting requirements.
  Our
        board
        of directors are currently working towards implementing significant changes
        in
        our internal controls over financial reporting that are expected to materially
        affect such controls. Our board of directors is seeking to retain a consultant
        to recommend for implementation specific disclosure controls and procedures
        to
        ensure that information required to be disclosed in our reports filed or
        submitted under the Exchange Act are recorded, processed, summarized and
        reported, within the time periods specified in the SEC's rules and
        forms.
  30
 
 Limitations
        on the Effectiveness of Internal Controls
 
 Our
        management does not expect that our disclosure controls and procedures or
        our
        internal control over financial reporting will necessarily prevent all fraud
        and
        material error. Our disclosure controls and procedures are designed to provide
        reasonable assurance of achieving our objectives and our Chief Executive
        Officer
        and Chief Financial Officer concluded that our disclosure controls and
        procedures are effective at that reasonable assurance level.  Further,
        the design of a control system must reflect the fact that there are resource
        constraints, and the benefits of controls must be considered relative to
        their
        costs. Because of the inherent limitations in all control systems, no evaluation
        of controls can provide absolute assurance that all control issues and instances
        of fraud, if any, within the Company have been detected. These inherent
        limitations include the realities that judgments in decision-making can be
        faulty, and that breakdowns can occur because of simple error or mistake.
        Additionally, controls can be circumvented by the individual acts of some
        persons, by collusion of two or more people, or by management override of
        the
        internal control. The design of any system of controls also is based in part
        upon certain assumptions about the likelihood of future events, and there
        can be
        no assurance that any design will succeed in achieving its stated goals under
        all potential future conditions. Over time, control may become inadequate
        because of changes in conditions, or the degree of compliance with the policies
        or procedures may deteriorate.
      31
  **PART
          II – OTHER INFORMATION**
 
 **Item
                    1.**
                **Legal
                    Proceedings**
 
 We
          are
          not a party to any pending legal proceeding. We are not aware of any pending
          legal proceeding to which any of our officers, directors, or any beneficial
          holders of 5% or more of our voting securities are adverse to us or have
          a
          material interest adverse to us.
 
 **Item
                    2.**
                **Unregistered
                    Sales of Equity Securities and Use of
                    Proceeds**
 
 None
 
 **Item
                    3.**
                **Defaults
                    upon Senior Securities**
 
 None
 
 **Item
                    4.**
                **Submission
                    of Matters to a Vote of Security
                    Holders**
 
 No
          matters have been submitted to our security holders for a vote, through
          the
          solicitation of proxies or otherwise, during the quarterly period ended
          September 30, 2007.
 
 **Item
                    5.**
                **Other
                    Information**
 
 None
 **Item
                      6.**
                  **Exhibits**  Exhibit Number
                  Description
                      of Exhibit  31.1
                  Certification
                    of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002  31.2
                  Certification
                    of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002  32.1
                  Certification
                    of Chief Executive Officer and Chief Financial Officer pursuant
                    to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002
 32
  **SIGNATURES**
 
 In
        accordance with the requirements of the Securities and Exchange Act of 1934,
        the
        Registrant has duly caused this report to be signed on its behalf by the
        undersigned, thereunto duly authorized.
  **United
                  American Corporation**Date:
November
                  14, 2007
              By:
              /s/ George
                MetrakosGeorge
                MetrakosChief
                Executive Officer and
                Director