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
endedMarch 31,
2008
 
 [  
      ]
              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.)218
      de la Coulee, Mount St-Hilaire Quebec, Canada, J3H
      5Z6
                (Address
      of principal executive offices)514-313-3424
                (Issuer’s
      telephone number)4150
      Ste-Catherine Quest, Suite 200, Montreal, Quebec, Canada H3Z
      0A1
                (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 May
15, 2008.
  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
              28
  PART II – OTHER
INFORMATION
 Item
      1.
              Legal
      Proceedings
              29Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              30Item
      3.
              Defaults
      Upon Senior Securities
              30Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              30Item
      5.
              Other
      Information
              30Item
      6.
              Exhibits
              30




PART I - FINANCIAL
INFORMATION
 
 Item 1. Financial
Statements
 
 PageOur
      unaudited condensed consolidated financial statements included in this
      Form 10-QSB are as follows:Unaudited
      Condensed Consolidated Balance Sheet as of March 31, 2008
              2Unaudited
      Condensed Consolidated Statements of Operations and Comprehensive Income
      (Loss) for the nine months and three months ended March 31, 2008 and
      2007;
              3Unaudited
      Condensed Consolidated Statements of Cash Flows for the nine months ended
      March 31, 2008 and 2007;
              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 March 31, 2008 are not necessarily
indicative of the results that can be expected for the full year.
  1
 UNITED
AMERICAN CORPORATION
 CONDENSED
CONSOLIDATED BALANCE SHEET
 MARCH
31, 2008
 ASSETS(IN US$)Current
      Assets:Cash
      and cash equivalents
                  
                  $
                  2,119Accounts
      receivable, net
                  
                  
                  1,851,850Prepaid
      expenses and other current assets
                  
                  
                  14,180Loan
      receivable - Teliphone Corp.
                  
                  
                  300,000Loan
      receivable
                  
                  
                  857,016Loan
      receivable - related company
                  
                  
                  192,476Total
      Current Assets
                  
                  
                  3,217,641Fixed
      assets, net of depreciation
                  
                  
                  223,215TOTAL
      ASSETS
                  
                  $
                  3,440,856LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)LIABILITIESCurrent
      Liabilities:Loans
      payable - related parties
                  
                  $
                  94,354Other
      payables
                  
                  
                  636,631Convertible
      debentures
                  
                  
                  90,961Derivative
      liability
                  
                  
                  18,885Accounts
      payable and accrued expenses
                  
                  
                  1,865,082Total
      Current Liabilities
                  
                  
                  2,705,913Total
      Liabilities
                  
                  
                  2,705,913STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock, $.001 Par Value; 100,000,000 shares authorizedand
      51,079,985 shares issued and outstanding
                  
                  
                  51,080Additional
      paid-in capital
                  
                  
                  5,288,832Accumulated
      deficit
                  
                  
                  (4,683,891
                  )Accumulated
      other comprehensive income (loss)
                  
                  
                  78,922Total
      Stockholders' Equity (Deficit)
                  
                  
                  734,943TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                  
                  $
                  3,440,856
   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 THREE MONTHS ENDED MARCH 31, 2008 AND 2007
 IN
      US$2008
                  
                  
                  2007OPERATING
      REVENUESSales
                  
                  $
                  2,720,272
                  
                  
                  $
                  5,483,752COST
      OF SALESInventory,
      beginning of period
                  
                  
                  -Purchases
                  
                  
                  2,478,590
                  
                  
                  
                  4,555,235Inventory,
      end of period
                  
                  
                  -
                  
                  
                  
                  -Total
      Cost of Sales
                  
                  
                  2,478,590
                  
                  
                  
                  4,555,235GROSS
      PROFIT
                  
                  
                  241,682
                  
                  
                  
                  928,517OPERATING
      EXPENSESSelling
      and promotion
                  
                  
                  3,876
                  
                  
                  
                  72,811Research and development
                  
                  
                  -Professional
      and consulting fees
                  
                  
                  87,989
                  
                  
                  
                  122,515Commissions
      and wages
                  
                  
                  13,275
                  
                  
                  
                  595,565Other
      general and administrative expenses
                  
                  
                  3,645
                  
                  
                  
                  8,814Depreciation,
      amortization and impairment
                  
                  
                  58,034
                  
                  
                  
                  58,446Total
      Operating Expenses
                  
                  
                  166,819
                  
                  
                  
                  858,151GAIN
      (LOSS) BEFORE OTHER INCOME
                  
                  
                  74,863
                  
                  
                  
                  70,366OTHER
      INCOME (EXPENSE)Gain
      (loss) on derivative liability
                  
                  
                  -
                  
                  
                  
                  -Interest
      IncomeInterest
      expense
                  
                  
                  (8,982
                  )
                  
                  
                  (39,694
                  )Total
      Other Income (Expense)
                  
                  
                  (8,982
                  )
                  
                  
                  (39,694
                  )NET
      INCOME (LOSS) BEFORE PROVISION FORINCOME
      TAXES AND MINORITY INTEREST
                  
                  
                  65,881
                  
                  
                  
                  30,672Minority
      interest
                  
                  
                  -
                  
                  
                  
                  -NET
      INCOME (LOSS) BEFORE PROVISIONFOR
      INCOME TAXES
                  
                  
                  65,881
                  
                  
                  
                  30,672Provision
      for Income Taxes
                  
                  
                  -
                  
                  
                  
                  -NET
      INCOME (LOSS) APPLICABLETO
      COMMON SHARES
                  
                  $
                  65,881
                  
                  
                  $
                  30,672NET
      INCOME (LOSS) PER BASIC AND DILUTED SHARESBASIC
                  
                  $
                  0.00
                  
                  
                  $
                  0.00FULLY
      DILUTED
                  
                  $
                  0.00
                  
                  
                  
                  0.00WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING - BASIC
                  
                  
                  51,079,985
                  
                  
                  
                  51,079,985WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING - FULLY DILUTED
                  
                  
                  52,508,556
                  
                  
                  
                  52,508,556COMPREHENSIVE
      INCOME (LOSS)Net
      income (loss)
                  
                  $
                  65,881
                  
                  
                  $
                  30,672Other
      comprehensive income (loss)Currency
      translation adjustments
                  
                  
                  3,553
                  
                  
                  
                  (4,721
                  )Comprehensive
      income (loss)
                  
                  $
                  69,434
                  
                  
                  $
                  25,951
  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 THREEE MONTHS ENDED MARCH 31, 2008 AND 2007
 IN
      US$2008
                  
                  
                  2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                  
                  $
                  69,434
                  
                  
                  $
                  30,672Adjustments
      to reconcile net income (loss) to net cashprovided
      by (used in) operating activities:Depreciation,
      amortization and impairment
                  
                  
                  58,034
                  
                  
                  
                  58,446Shares
      issued for services
                  
                  
                  -
                  
                  
                  
                  -Additional
      paid in capital
                  
                  
                  -
                  
                  
                  
                  -Comprehensive
      income (loss)
                  
                  
                  1
                  
                  
                  
                  -Gain
      on derivative liability
                  
                  
                  -
                  
                  
                  
                  -Changes
      in assets and liabilities(Increase)
      decrease in accounts receivable
                  
                  
                  242,348
                  
                  
                  
                  755,361Decrease
      in investment tax credits
                  
                  
                  (2,883
                  )
                  
                  
                  -Decrease
      in interest receivable
                  
                  
                  -
                  
                  
                  
                  (9,000
                  )Decrease
      in inventory
                  
                  
                  -
                  
                  
                  
                  -(Increase)
      decrease in prepaid expenses and other current assets
                  
                  
                  190
                  
                  
                  
                  14,215Increase
      in deferred revenue
                  
                  
                  -
                  
                  
                  
                  -(Decrease)
      in accounts payable andand
      accrued expenses
                  
                  
                  (674,666
                  )
                  
                  
                  (363,530
                  )Total
      adjustments
                  
                  
                  (376,976
                  )
                  
                  
                  455,492Net
      cash provided by (used in) operating activities
                  
                  
                  (307,542
                  )
                  
                  
                  486,164CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisitions
      of fixed assets
                  
                  
                  (7,992
                  )
                  
                  
                  (59,931
                  )(Increase)
      decrease in loan receivable - related company
                  
                  
                  9,948
                  
                  
                  
                  (9,217
                  )Net
      cashprovided by (used in) investing activities
                  
                  
                  1,956
                  
                  
                  
                  (69,148
                  )CASH
      FLOWS FROM FINANCING ACTIVITES(Decrease)
      in bank overdraft
                  
                  
                  -
                  
                  
                  
                  -Proceeds
      from loan payable, net of repayments
                  
                  
                  -
                  
                  
                  
                  -Proceeds
      from loan payable - related parties, net of repayments
                  
                  
                  (3,351
                  )
                  
                  
                  (95,927
                  )Net
      cash provided by (used in) financing activities
                  
                  
                  (3,351
                  )
                  
                  
                  (95,927
                  )Effect
      of foreign currency
                  
                  
                  -
                  
                  
                  
                  (9,464
                  )NET
      INCREASE (DECREASE) INCASH
      AND CASH EQUIVALENTS
                  
                  
                  (308,937
                  )
                  
                  
                  311,625CASH
      AND CASH EQUIVALENTS -BEGINNING
      OF YEAR
                  
                  
                  311,056
                  
                  
                  
                  69,553CASH
      AND CASH EQUIVALENTS - END OF PERIOD
                  
                  $
                  2,119
                  
                  
                  $
                  381,178CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                  
                  $
                  8,982
                  
                  
                  $
                  39,694
   The
accompanying notes are an integral part of the condensed consolidated financial
statements.
  4
  UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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, 2007 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.
  5
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 NOTE
      1-
                    ORGANIZATION AND BASIS
      OF PRESENTATION (CONTINUED)
 
 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.
 
 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.
  6
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 NOTE
      1-
                    ORGANIZATION AND BASIS
      OF PRESENTATION (CONTINUED)
  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%.
 
 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)
  7
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 NOTE
      1-
                    ORGANIZATION AND BASIS
      OF PRESENTATION (CONTINUED)
  Going
Concern
 
 As shown
in the accompanying consolidated financial statements the Company has started to
show net profit of $64,881 for the three months ended March 31, 2008, but prior
to this time, the Company had incurred significant net losses, and
accumulated a deficit of $4,683,891 through March 31, 2008 and has a working
capital surplus of $511,728 as of March 31, 2008.
  Despite
the recent positive net incomes and the Company being successful in establishing
distribution channels in Africa and generating significant revenue growth in the
year, the significant downturn in the business during the period ending March
31, 2008 as compared to the year ended December 31, 2007 is such that there is
no guarantee that the Company will be able to continue to grow, raise enough
capital or generate revenues 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.
 
 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.
  8
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 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.
  9
  UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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 gain (loss) of $3,553 and ($4,721) for
the three months ended March 31, 2008 and 2007, 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.
  10
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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 March 31, 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.
  11
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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 March 31,
2008 and 2007 are included in general and administrative expenses in the
condensed consolidated statements of operations.
 
 Concentration
Risk
 
 In the
three months ended March 31, 2008 and 2007, the Company generated 100% and 97%
of their sales from one customer. A major customer is a customer that represents
greater than 10% of the total sales.
 
 In the
three months ended March 31, 2008 and 2007, the Company incurred 72% and 67% 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.
  12
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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:
 
 March
      31,
                      
                      
                      March
      31,2008
                      
                      
                      2007Net
      income (loss)
                      
                      $
                      65,881
                      
                      
                      $
                      30,672Weighted-average
      common sharesOutstanding
      (Basic)
                      
                      
                      51,079,985
                      
                      
                      
                      51,079,985Weighted-average
      common stockEquivalentsConvertible
      debentures
                      
                      
                      1,818,181
                      
                      
                      
                      1,428,571Stock
      options
                      
                      
                      -
                      
                      
                      
                      -Warrants
                      
                      
                      -
                      
                      
                      
                      -Weighted-average
      common sharesOutstanding
      (Diluted)
                      
                      
                      52,898,166
                      
                      
                      
                      52,508,556
  13
  UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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, 2008. 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.
  14
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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.
  15
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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.
  16
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 NOTE
      3-
                    FIXED
      ASSETS
 
 Fixed
assets as of  March 31, 2008 were as follows:
 
 Estimated
      UsefulLives
      (Years)Computer
      equipment
                    
                    
                    5
                    
                    
                    $
                    1,172,524Furniture
      and fixtures
                    
                    
                    5
                    
                    
                    
                    2,334Vehicle
                    
                    
                    5
                    
                    
                    
                    20,8491,195,707Less:
      accumulated depreciation
                    
                    
                    
                    
                    
                    
                    (972,492
                    )Fixed
      assets, net
                    
                    
                    
                    
                    
                    $
                    223,215
 
 There
      was $58,034 and $58,446 depreciation charged to operations for the three
      months ended March 31, 2008 and 2007,
  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
$9,000 of interest receivable through March 31, 2007.  In addition,
there are approximately $192,476 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 has a loan with a shareholder that is non-interest bearing. There was
$94,354 outstanding as of March 31, 2007. This loan is short-term in
nature.
 
 The
Company has expensed $8,982 and $39,694 in interest expense for the three months
ended March 31, 2008 and 2007, respectively.
 
 The
Company paid commissions to a company with common ownership in the amount of $0
and $519,795 in the three months ended March 31, 2008 and 2007,
respectively.
  17
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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 March 31, 2008 and 2007; no annual
dividends, volatility of 125%, risk-free interest rate of 3.28%, and expected
life of 1 year. For disclosure purposes as of March 31, 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 three months ended March 31, 2008 and 2007 was approximately
$3,000 for each period. At March 31, 2008, there was no interest
accrued.
  18
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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
      EndingDecember
    31,2008
                      
                      
                      31,6552009
                      
                      
                      23,229Total
                      
                      $
                      54,884
 
 NOTE
      7-
                    STOCKHOLDERS’ EQUITY
      (DEFICIT)
 
 Common
Stock
 
 As of
March 31, 2008, 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 March 31,
2007.
 
 The
Company has not issued any shares in the nine months ended March 31,
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.
  19
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (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 March
31, 2008, deferred tax assets consist of the
following:
 
 Net
      operating losses
                      
                      $
                      1,587,800Valuation
      allowance
                      
                      
                      (1,587,800
                      )$
                      -
 
 At March
31, 2008, the Company had a net operating loss carryforwards of approximately
$4,683,891, available to offset future taxable income through
2028.  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 three months ended March 31,
2008 and 2007 is summarized as follows:
  2007
                    
                    
                    2006Federal
      statutory rate
                    
                    
                    (34.0
                    )%
                    
                    
                    (34.0
                    )%State
      income taxes, net of federal benefits
                    
                    
                    0.0
                    
                    
                    
                    0.0Valuation
      allowance
                    
                    
                    34.0
                    
                    
                    
                    34.00
                    %
                    
                    
                    0
                    %
  20
 
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 NOTE
      9-
                    SEGMENT
      INFORMATION
 
 The
Company’s reportable operating segments include wholesale VoIP services which is
the physical buying of minutes (United American Telecom, 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. 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 March 31, 2008 are as
follows:
 
 Wholesale
                    
                    
                    WholesaleServices
                    
                    
                    ServicesCorporate
                    
                    
                    Brokered
                    
                    
                    Direct
                    
                    
                    TotalSales
                    
                    
                    -
                    
                    
                    $
                    2,720,272
                    
                    
                    
                    -
                    
                    
                    $
                    2,720,272Cost
      of sales
                    
                    
                    -
                    
                    
                    
                    2,478,590
                    
                    
                    
                    -
                    
                    
                    
                    2,478,590Gross
      profit
                    
                    
                    -
                    
                    
                    
                    241,682
                    
                    
                    
                    -
                    
                    
                    
                    241,682Operating
      expenses
                    
                    
                    100,091
                    
                    
                    
                    66,728
                    
                    
                    
                    -
                    
                    
                    
                    166,819Depreciation,
      amortization and impairment
                    
                    
                    44,791
                    
                    
                    
                    13,243
                    
                    
                    
                    -
                    
                    
                    
                    58,034Interest
      (net) and other
                    
                    
                    (8,982
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (8,982
                    )Net
      income (loss)
                    
                    
                    (87,108
                    )
                    
                    
                    152,989
                    
                    
                    
                    -
                    
                    
                    
                    65,881Segment
      assets
                    
                    
                    500,167
                    
                    
                    
                    2,717,474
                    
                    
                    
                    -
                    
                    
                    
                    3,217,641Fixed
      Assets, net of depreciation
                    
                    
                    72,121
                    
                    
                    
                    151,094
                    
                    
                    
                    -
                    
                    
                    
                    223,215
 
 Operating
segment data for the nine months ended March 31, 2007 are as
follows:
  Wholesale
                    
                    
                    WholesaleServices
                    
                    
                    ServicesCorporate
                    
                    
                    Brokered
                    
                    
                    Direct
                    
                    
                    TotalSales
                    
                    $
                    -
                    
                    
                    $
                    4,690,914
                    
                    
                    $
                    792,838
                    
                    
                    $
                    5,483,752Cost
      of sales
                    
                    
                    -
                    
                    
                    
                    3,997,613
                    
                    
                    
                    557,622
                    
                    
                    
                    4,555,235Gross
      profit
                    
                    
                    -
                    
                    
                    
                    693,301
                    
                    
                    
                    235,216
                    
                    
                    
                    928,517Operating
      expenses
                    
                    
                    53,002
                    
                    
                    
                    635,236
                    
                    
                    
                    111,467
                    
                    
                    
                    799,705Depreciation,
      amortization and impairment
                    
                    
                    44,610
                    
                    
                    
                    13,836
                    
                    
                    
                    -
                    
                    
                    
                    58,446Interest
      (net)
                    
                    
                    -
                    
                    
                    
                    (16,822
                    )
                    
                    
                    (22,872
                    )
                    
                    
                    (39,694
                    )Net
      income (loss)
                    
                    
                    (97,612
                    )
                    
                    
                    27,407
                    
                    
                    
                    100,877
                    
                    
                    
                    30,672Segment
      assets
                    
                    
                    273,071
                    
                    
                    
                    1,282,269
                    
                    
                    
                    372,364
                    
                    
                    
                    1,927,704Fixed
      Assets, net of depreciation
                    
                    
                    248,490
                    
                    
                    
                    174,474
                    
                    
                    
                    -
                    
                    
                    
                    422,964
 
 21
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
   NOTE
      9-
                    SEGMENT
      INFORMATION (CONTINUED)
 
 In
addition, the segment data broken out by geographical location for the three
months ended March 31, 2008 are as follows:
 
 North,
      Central
                    
                    
                    Europe,
      Middleand
      South
                    
                    
                    East
      andAmerica
                    
                    
                    Africa
                    
                    
                    Asia
                    
                    
                    TotalSales
                    
                    $
                    633,994
                    
                    
                    $
                    1,878,601
                    
                    
                    $
                    207,677
                    
                    
                    $
                    2,720,272Cost
      of sales
                    
                    $
                    577,667
                    
                    
                    $
                    1,711,697
                    
                    
                    $
                    189,226
                    
                    
                    
                    2,478,590Gross
      profit (loss)
                    
                    $
                    56,327
                    
                    
                    $
                    166,904
                    
                    
                    $
                    18,451
                    
                    
                    
                    241,682Operating
      expenses
                    
                    $
                    38,879
                    
                    
                    $
                    115,204
                    
                    
                    $
                    12,736
                    
                    
                    
                    166,819Depreciation,
      amortization and impairment
                    
                    $
                    13,526
                    
                    
                    $
                    40,078
                    
                    
                    $
                    4,431
                    
                    
                    
                    58,034Interest
      (net) and other
                    
                    $
                    (2,093
                    )
                    
                    $
                    (6,203
                    )
                    
                    $
                    (686
                    )
                    
                    
                    (8,982
                    )Net
      income (loss)
                    
                    $
                    15,354
                    
                    
                    $
                    45,497
                    
                    
                    $
                    5,030
                    
                    
                    
                    65,881Segment
      assets
                    
                    $
                    749,912
                    
                    
                    $
                    2,222,080
                    
                    
                    $
                    245,648
                    
                    
                    
                    3,217,641Fixed
      Assets, net of depreciation
                    
                    $
                    52,023
                    
                    
                    $
                    154,151
                    
                    
                    $
                    17,041
                    
                    
                    
                    223,215
 
 The
geographical location segmentation information for the three months ended March
31, 2007 is as follows:
 
 North,
      Central
                    
                    
                    Europe,
      Middleand
      South
                    
                    
                    East
      andAmerica
                    
                    
                    Africa
                    
                    
                    Asia
                    
                    
                    TotalSales
                    
                    $
                    1,376,899
                    
                    
                    $
                    3,918,251
                    
                    
                    $
                    188,602
                    
                    
                    $
                    5,483,752Cost
      of sales
                    
                    
                    1,144,684
                    
                    
                    
                    3,253,757
                    
                    
                    
                    156,794
                    
                    
                    
                    4,555,235Gross
      profit (loss)
                    
                    
                    232,215
                    
                    
                    
                    664,494
                    
                    
                    
                    31,808
                    
                    
                    
                    928,517Operating
      expenses
                    
                    
                    199,805
                    
                    
                    
                    572,532
                    
                    
                    
                    27,368
                    
                    
                    
                    799,705Depreciation,
      amortization and impairment
                    
                    
                    14,675
                    
                    
                    
                    41,761
                    
                    
                    
                    2,010
                    
                    
                    
                    58,446Interest
      (net)
                    
                    
                    (9,967
                    )
                    
                    
                    (28,362
                    )
                    
                    
                    (1,365
                    )
                    
                    
                    (39,694
                    )Net
      income (loss)
                    
                    
                    7,768
                    
                    
                    
                    21,839
                    
                    
                    
                    1,065
                    
                    
                    
                    30,672Segment
      assets
                    
                    
                    484,022
                    
                    
                    
                    1,377,383
                    
                    
                    
                    66,299
                    
                    
                    
                    1,927,704Fixed
      Assets, net of depreciation
                    
                    
                    106,201
                    
                    
                    
                    302,216
                    
                    
                    
                    14,547
                    
                    
                    
                    422,964
 
 NOTE
      10-
                    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
      11-
                    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.
 
 NOTE
      12-
                    SUBSEQUENT
      EVENTS
 
 In May,
2008, as noted in NOTE 2- Concentration Risk, the company’s Major Customer
defaulted on $1,400,000 of payments to the Company.  As a result, the
Company will incur losses of up to $1,400,000.  Since the customer was
a major customer, accounting for over 99% of the Company’s revenues, the default
in payment has placed considerable doubt that the Company can continue its
operations.  The Company’s Management is considering its options,
including, but not limited to, legal action against the defaulting
customer.
 
 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, availability of 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 utilizes 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 and through the use of our switching facilities
by third parties. We also sold call 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.
  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.
  23
 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. Foreign investment risk can be mitigated through the use
      of international development insurance programs such as MIGA
      (Multinational Investment Guarantee Agency) run through the World
      Bank.
                  Opportunities
      also exist in developed countries, particularly in Europe, to have third
      party telecommunications carriers utilize our switching capability on a
      fee for service basis thereby providing revenues without the inherent risk
      of brokered routes.
                  We
      can leverage our experience into developing markets such Internet
      Television.
  Since we
first launched our direct wholesale termination services with our CarribeanONE
network in 2003, we added additional networks in the countries of Mali, Gabon
and Cameroon, Africa, as direct route destinations. We had also grown in our
other business segment, which is brokered routes. Brokered routes refer to the
re-sale of other companies’ direct routes to our customers. Brokered routes are
highly risky as they represent high volume/low margin sales to the
company.  Therefore timely payments from the company’s customers is
critical and late or non-paynment can and has resulted in cash flow problems for
the company.
  The
CarribeanONE route terminated operation in February of 2006. 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 are experiencing difficulty enforcing the terms of our prior
negotiated agreements. The current governments in these countries are not
honoring existing agreements 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 were working throughout
2007 to restore these networks to be operational ,  but to date have
not been successful The failure to provide termination services in Mali, Gabon
and Cameroon through our VoIP networks have significantly harmed our business
and results of operations in 2007.
  During
2008, we our focusing our efforts on the development and implementation of an
ITV/IPTV platform which will allow us to target home and commercial subscribers
with focused content. We will also expand use of our telecommunications switches
on a country by country basis for use by third parties. By providing access to
our switches rather than brokering the routes directly, we will significantly
reduce the financial risk to the company as the company will not assume any
liability to long distance suppliers.
  We
will also focus on establishing gateways in countries that do not present that
same political risks and instability associated with our operations in Mali,
Gabon and Cameroon, Africa and where we can insure political risks through
insurance programs such as the Multilateral Investment Guarantee
Agency.
  An
Overview of Internet Television
  One of
the outgrowths from the rapid deployment of broadband connectivity in the United
States and abroad has been the accelerated adoption of several related services
such as VoIP (Voice over Internet Protocol), IPTV (Internet Protocol Television)
and Internet Television (ITV). All three technologies transmit sound, voice and
or video over the Internet through the conversion of respective signals into
data packets. VoIP technology is used primarily for 2 way voice conversations
(e.g. traditional telephone) while IPTV and ITV is used for both interactive and
streaming television.  The primary difference between IPTV and ITV is
how one watches the content with IPTV being watched via personal computer and
ITV via traditional television. In the industry this is commonly known as “lean
forward” and “lean back” technology respectively. The data packets are
transmitted over the Internet and converted back into voice, sound and/or video
signals before reaching their recipient. The Internet has always used
packet-switched technology to transmit information between two communicating
terminals. For example, packet switching allows a personal computer to download
a page from a web server or to send an e-mail message to another computer. VoIP,
IPTV and ITV allow for the transmission of voice signals over these same packet
switched networks and, in doing so, provide an alternative to traditional
telephone and cable networks as well as the airwaves.
  24
  Internet
television technologies present several advantages over the technology used in
traditional cable, satellite and airwave networks that enable IPTV/ITV providers
to operate with lower capital expenditures and operating costs while offering
both traditional and innovative service features. Cable subscribers must be
connected to a specific company based on the subscriber’s location. Satellite
subscribers on the other hand, while not restricted to a specific company by
their location, are required to install a receiving dish at their location which
cannot be moved and is subject to meteorological disturbances. Both cable and
satellite providers require significant capital expenditures and ongoing
maintenance. In contrast, IPTV/ITV services are provided over the Internet with
programming being received by the subscriber’s PC or on a television set using a
set top box. Like VoIP, IPTV/ITV quality and service is dependent on the quality
and reliability of the Internet connection. IPTV/ITV technology also presents
the opportunity to offer customers attractive features that traditional
cable/satellite companies cannot easily support such as full mobility (the set
top box will operate anywhere in the world there is a high speed Internet
connection), video conferencing as well as all most of the regular
cable/satellite features including telephone.
   Broad
range of IPTV services include:
  •
                Interactive
      information
 •
                Content
      portability
 •
                Video
      clips on-demand
 •
                Video
      calling/conferencing
 •
                Video
      messaging
 •
                Network-based
      time & place shifting
 •
                Peer-to-Peer
      Video
 •
                Home
      automation
 •
                On-line
      dating
 •
                Personalized
      advertising
 •
                Wireless/Wireline
      Integration
 •
                Standard
      Def. Television (SDTV)
 •
                High
      Def. Television (HDTV)
 •
                Video-on-Demand
      (VOD)
 •
                Interactive
      program guide
 •
                Web
      browsing on TV
 •
                Music
      channels
 •
                Local
      programming
 •
                Voice
      services
 •
                Emergency
      services
 •
                Information
      services
 •
                Personal
      Video Recorder (PVR)
  While
traditional cable companies have been very effective at increasing subscriber
choice for both programmed and on demand content, they have been slow to offer
specialized content (e.g. foreign networks) and when available are expensive,
typically costing $15-25 per channel per month. We believe that that this
focused specialty market is underserved and provides an opportunity to the
company. The company will also look at the feasibility of bundling Internet
Television  along with voice services (in partnership with Teliphone
Inc.), Internet access and other features as noted above.
   Voice
over Internet Protocol or VoIP has become widely accepted at a supplement or
substitution for traditional telephone service. Most cable companies and second
tier telephone companies now offer VoIP home service in direct competition to
traditional telephone service.  IPTV and ITV are widely viewed to
develop in the same way.
  25
  Results
of Operations for the nine and three months ended March 31, 2008 and
2007
 
 For the
three months ended March 31, 2008, we generated total revenue of $2,720,272,
compared to revenue of $5,483,752 for the three months ended March 31, 2007. Our
revenue was generated by sales wholesale international voice services using
VoIP.  Our decrease in revenue for the three months ended March 31, 2008
when compared to the same reporting period in the prior year is primarily
attributable to a decrease 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 three months ended March 31, 2008, all of our revenues were attributed to
our brokered routes, compared to $4,690,914 of revenues attributed to brokered
routes and $792,838 of revenues attributed to our direct routes for the three
months ended March 31, 2007.
 
 Our cost
of sales for the three months ended March 31, 2008 was $2,478,590 compared with
$4,555,235 for the same period in 2007.  The decrease in cost of sales
is primarily attributable to a decrease in 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 $166,819 for the three months ended
March 31, 2008, compared to $858,151 for the three months ended March 31, 2007.
The decrease in our operating expenses is primarily attributable to decreases in
commissions paid on the decreased revenues as well as decreases in selling and
promotion expenses. We paid $13,275 in commissions and wages and management fees
for the three months ended March 31, 2008, compared to $595,565 for the three
months ended March 31, 2007.  We paid commissions and management fees based
upon sales of VoIP termination services. As a result of a significant decrease
in the sales of VoIP termination services, our commission and management fees
paid correspondingly decreased.
  Our net
income for the three months ended March 31, 2008 was $65,881, compared to a net
income of $30,672 in the prior year.  The reporting of net income
during the three months ended March 31, 2008 was primarily attributable to a
reduction of operating expenses due to the reduction of sales, resulting in a
higher profit margin.
 
 Liquidity
and Capital Resources
 
 As of
March 31, 2008, we had current assets of $3,217,614. Our current assets
consisted of cash and cash equivalents of $2,119, accounts receivable in the
amount of $1,851,850, a loan receivable from our now related party Teliphone
Corp. (formerly majority-owned subsidiary until its spin-off on October 30,
2006) of $492,476, a loan receivable of $857,016 from our former subsidiary
3894517 Canada Inc. (which ceased operations on June 30, 2007) and prepaid
expenses and other current assets of $14,180. Our total current liabilities as
of March 31, 2008 were $2,705,913. As a result, on March 31, 2008 we had working
capital surplus of $511,728.
 
 Operating
activities used $307,542 in cash for the three months ended March 31, 2008. Our
decrease in accounts payable and accrued expenses was the primary component of
our negative operating cash flow. Investing activities during the three months
ended March 31, 2008 provided $1,956, primarily for the decrease in loans
receivable from related parties. Cash flows used in financing activities during
the three months ended March 31, 2008 primarily consisted of $3,351 for proceeds
from loans payable- related parties. We primarily relied on revenues to fund our
operations during the three months ended March 31, 2008.
  26
  As of
March 31, 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, 2008. 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
March 31, 2008, there were no off balance sheet arrangements.
 
 Going
Concern
 
 As shown
in the accompanying consolidated financial statements the Company has started to
show net profit of $64,881 for the three months ended March 31, 2008, but prior
to this time, the Company had incurred significant net losses, and
accumulated a deficit of $4,683,891 through March 31, 2008 and has a working
capital surplus of $511,728 as of March 31, 2008.
  Despite
the recent positive net incomes and the Company being successful in establishing
distribution channels in Africa and generating significant revenue growth in the
year, the significant downturn in the business during the period ending March
31, 2008 as compared to the year ended December 31, 2007 is such that there is
no guarantee that the Company will be able to continue to grow, raise enough
capital or generate revenues 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.
  27
 
 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.
 
 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.
 
 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.
  28
 
 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 March 31, 2008.  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 March 31, 2008, our disclosure
controls and procedures are not effective.  There have been no changes
in our internal controls over financial reporting during the quarter ended March
31, 2008.
 
 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 Annual 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.
  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.
   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.
  29
 
 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 March
31, 2008.
 
 Item
      5.
                    Other
      Information
 
 None
 
 Item
      6.
                    Exhibits
 
  Number
                    Description
      of Exhibit31.1
                    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
  200231.2
                    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
  200232.1
                    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
 30
  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 CorporationDate:
      May 15, 2008
                By:
                /s/ Benoit
      LalibertéBenoit
      Laliberté
                  Chief
      Executive Officer and Director
    31