UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 WASHINGTON,
        D.C. 20549
 
 **FORM
        10-KSB**
 
 [X]
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934For
                  the fiscal year endedDecember
                  31, 2006[
                  ]
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACTFor
                  the transition period from _________ to ________Commission
                  file number000-27621
 
 United
                  American Corporation(Name
                  of small business issuer in its
                  charter)
  Florida
              95-4720231(State
                  or other jurisdiction of incorporation or organization)
              (I.R.S.
                  Employer Identification No.)4150
                  Ste-Catherine Street West, Suite 200 , Montreal, Quebec,
                  Canada
              H3Z
                  0A1(Address
                  of principal executive offices)
              (Zip
                  Code)Issuer’s
                telephone number:514-313-6010
  Securities
                  registered under Section 12(b) of the Exchange Act:Title
                  of each class
              Name
                  of each exchange on which registeredNone
              Not
                  ApplicableSecurities
                  registered under Section 12(g) of the Exchange Act:Common
                  Stock, par value $0.001(Title
                  of class)
 
 Check
        whether the Issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Securities Exchange Act during the past 12 months (or for such
        shorter period that the registrant was required to file such reports), and
        (2)
        has been subject to such filing requirements for the past 90 days. Yes [X]
        No [
        ]
 
 Check
        if
        disclosure of delinquent filers in response to Item 405 of Regulation S-B
        is not
        contained in this form, and no disclosure will be contained, to the best
        of
        registrant’s knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-KSB or any amendment
        to
        this Form 10-KSB [ ]
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes [ ] No [X]
 
 State
        issuer’s revenue for its most recent fiscal year. $19,991,191
 
 State
        the
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates computed by reference to the average bid and asked price of
        such
        common equity, as of a specified date within the past 60 days.
 $1,015,559
        as of April 16, 2007
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date. 51,079,985  Common
        Shares as of April 15, 2007
 
 Transitional
        Small Business Disclosure Format (Check One): Yes [ ] No [X]
 
 Table
            of Contents
  **TABLE
        OF CONTENTS**
 
 PagePART
                  IItem
                  1.
              Description
                  of Business
              3Item
                  2.
              Description
                  of Property
              11Item
                  3.
              Legal
                  Proceedings
              11Item
                  4.
              Submission
                  of Matters to a Vote of Security
                  Holders
              11PART
                  IIItem
                  5.
              Market
                  for Common Equity and Related Stockholder Matters
              13Item
                  6.
              Management’s
                  Discussion and Analysis
              16Item
                  7.
              Financial
                  Statements
              22Item
                  8.
              Changes
                  In and Disagreements With Accountants on Accounting and
                  Financial Disclosure
              23Item
                  8A.
              Controls
                  and Procedures
              24Item
                  8B.
              Other
                  Information
              25PART
                  IIIItem
                  9.
              Directors,
                  Executive Officers, Promoters and Control Persons;
                  Compliance With Section 16(a) of the Exchange Act
              26Item
                  10.
              Executive
                  Compensation
              30Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management
                  and Related Stockholder Matters
              32Item
                  12.
              Certain
                  Relationships and Related
                  Transactions
              33Item
                  13.
              Exhibits
              33Item
                  14.
              Principal
                  Accountant Fees and Services
              33
  2
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            of Contents
  **PART
        I**
 **Item1.
        Description of Business**
  **Business
        Development**
 
 We
        were
        incorporated on July 17, 1992, under the laws of the state of Florida. Since
        our
        inception, we sought out various business opportunities, none proved successful
        over a sustained period of time. We explored opportunities to acquire products
        or businesses that had the potential for profit.
 
 On
        July
        18, 2003, we entered into a share exchange agreement with 3874958 Canada
        Inc.
        whereby we agreed to transfer to 3874958 Canada Inc. 26,250,000 common shares
        of
        our common stock in exchange for the transfer of 100 shares of American United
        Corporation, a Delaware corporation (“AUC”). The 100 shares of AUC represent all
        of the issued and outstanding shares of the company. The agreement was
        contingent on the parties’ due diligence and completion of several conditions
        prior to sale. On October 6, 2003, these conditions were satisfied and the
        sale
        was consummated. Following the consummation of this sale, AUC became a
        wholly-owned subsidiary of our company. AUC was later dissolved.
 
 Benoit
        Laliberté, our CEO, CFO, and Director at the time, was also the sole officer,
        director, and shareholder of American United Corporation at the time that
        the
        share exchange agreement was entered into and when the sale was consummated.
        In
        addition, Mr. Laliberté was the sole officer, director, and shareholder of
        3874958 Canada, Inc. As a result, Mr. Laliberté was the beneficial holder of the
        100 shares of AUC held by 3874958 Canada, Inc. and is now the beneficial
        holder
        of the 26,250,000 shares we issued to 3874958 Canada, Inc. in the transaction
        described above.
 
 On
        January 1, 2004, we acquired 3894517 Canada Inc., a company wholly-owned
        by Mr.
        Laliberté at the time of acquisition. No consideration was paid for this
        company, as it had no assets or liabilities. 3894517 Canada Inc. became a
        wholly
        owned subsidiary of ours and was utilized in order to have banking operations
        within Montreal, Canada, our principal place of business.
 
 On
        February 3, 2004, a majority of the shareholders approved a change in the
        name
        of our company to United American Corporation. Management considered it in
        the
        best interests of the company to change our name to reflect the acquisition
        of
        American United Corporation shares and the new direction of our
        business.
 
 **Description
        of Business**
 
 Following
        the acquisition of AUC, we revised our business plan and implemented the
        business plan of AUC. AUC began its operations in 2002 as a holding company
        focused on the acquisition of network-centric technology and telecommunication
        companies. Given the rapid changes in the telecommunications marketplace,
        and
        the strong need for a competitive edge, they revised their business plan
        and set
        out on a new course in 2003 to provide Voice over Internet Protocol (VoIP)
        solutions.
  3
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            of Contents
  VoIP
        means that the technology used to send data over the Internet is now being
        used
        to transmit voice as well. The technology is known as packet switching. Instead
        of establishing a dedicated connection between two devices (computers,
        telephones, etc.) and sending the message "in one piece," this technology
        divides the message into smaller fragments, called 'packets'. These packets
        are
        transmitted separately over a decentralized network and when they reach the
        final destination, they're reassembled into the original message.
 
 VoIP
        allows a much higher volume of telecommunications traffic to flow at much
        higher
        speeds than traditional circuits do, and at a significantly lower cost. VoIP
        networks are significantly less capital intensive to construct and much less
        expensive to maintain and upgrade than legacy networks or what is commonly
        referred to as traditional circuit-switched networks. Since VoIP networks
        are
        based on internet protocol, they can seamlessly and cost-effectively interface
        with the high-technology, productivity-enhancing services shaping today's
        business landscape. These networks can seamlessly interface with web-based
        services such as virtual portals, interactive voice response (IVR), and unified
        messaging packages, integrating data, fax, voice, and video into one
        communications platform that can interconnect with the existing
        telecommunications infrastructure.
 
 *Wholesale
        VoIP Market*
 
 We
        constructed our first VoIP network which we refer to as CaribbeanONE. To
        construct this network, we established servers in Haiti that utilize our
        intellectual property to connect with our servers located in Montreal, Quebec,
        Canada. Following the successful testing of our servers in Haiti, the
        CaribbeanONE network was completed in March 2004. The establishment of the
        CaribbeanONE network was critical in that it enabled us to charge significantly
        less than other providers that exclusively utilize established telecommunication
        lines for calls that originate in North America and terminate in any country
        in
        the Caribbean. When one of our consumers originated a call in North America,
        our
        VoIP network received the call and transmitted the call to our server in
        Haiti.
        An established telecommunication line was then utilized to transmit the call
        from our server in Haiti to the termination point of the call in the Caribbean.
        The establishment of the CaribbeanONE network was our first step in
        strategically establishing computer servers in specified geographical areas
        to
        construct an international VoIP network.
 
 In
        May
        2006, we were forced to terminate our CarribbeanOne network due to political
        changes with government telecommunications regulators in Haiti, the hosting
        site
        of our gateway, resulting in our inability to acquire local termination minutes
        to direct a call from our gateway to its destination point within Haiti.
        During
        the reporting period, we were unsuccessful in our efforts to acquire local
        termination minutes within Haiti. As a result, we no longer utilize our
        CarribbeanOne network and have focused our operations on other gateways recently
        developed. The success of our business plan is not dependent on the
        CarribbeanOne network and we do not anticipate that the shut down of the
        CarribbeanOne network will negatively impact our results of
        operations.
  4
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  As
        part
        of our growth plan, we expanded our long distance VoIP termination services
        outside of the Caribbean and into additional routes in Africa. During the
        third
        quarter of 2005, we built a VoIP gateway in Gabon, Africa. Similar to our
        CaribbeanONE infrastructure located in Haiti, we offered wholesale termination
        services to global Tier1 and Tier 2 telecommunications companies to utilize
        our
        VoIP link between Montreal, Canada and Gabon in order to terminate their
        long
        distance calls. This gateway installation permitted us to expand the number
        of
        voice channels that we had in operation in our global network and sell more
        long
        distance termination minutes to our existing and future customers.
 
 We
        further expanded our network by entered into a partnership with Tectacom
        Inc. of
        Montreal and established a VoIP gateway in Mali, Africa in May of 2006. As
        a
        result, we established a profit-sharing understanding with Tectacom for VoIP
        long distance termination minutes transiting through our gateways.
        Tectacom held an agreement with the government-operated telecommunications
        provider in Mali, permitting them to reserve voice channel capacity within
        the
        Mali telecommunications infrastructure. The government-operated
        telecommunications provider in Mali owns all local landlines within the country
        and approximately 40% of cellular telephone services provided in the country.
        This agreement permitted us access to install our gateways and to interconnect
        the Mali voice channels operated by the government-owned telecommunications
        provider with our servers in Montreal. This agreement further enabled us
        to sell
        this direct route connection to our customers in order for them to offer
        long
        distance services to their respective retail customer base.
 
 In
        October 2006, we entered into an agreement with the government-operated
        telecommunications provider in Mali to assist it in identifying the origination
        point of calls utilizing its voice channels. Identifying the original point
        of a
        telephone call is important because it will enable the provider to prohibit
        unauthorized use of its network which is commonly achieved by disguising
        the
        original point of a telephone call. In exchange for providing this service,
        we
        received more favorable pricing for our use of its voice channels.
 
 In
        November 2006, again further expanded our network by building a VoIP gateway
        in
        Cameroon, Africa.
 
 On
        December 6, 2006, we entered into an Agreement with Gabon Telecom, a
        government-operated telecommunications provider in Gabon, primarily for the
        purposes of assisting Gabon Telecom in regulating its international
        telecommunications traffic in order to prevent abuse of its existing agreements
        created by unauthorized use of its voice channels and failure to make payment.
        This Agreement enabled us to offer termination services through our VoIP
        gateway
        in Gabon. This Agreement was for a period of 5 years and renewable upon mutual
        agreement of the parties.
 
 The
        Mali,
        Gabon and Cameroon, Africa networks all commenced service during the year
        ended
        December 31, 2006. Due to frequently changing political conditions within
        each
        of these African nations, we are experiencing difficulty enforcing the terms
        of
        our prior negotiated agreements. The current governments in these countries
        are
        not honoring the existing agreements described above in which we acquired
        termination routes within the country. For this reason, in February
  5
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  2007
        we
        were forced to suspend our direct African route operations in Mali, Gabon
        and
        Cameroon. We are working to restore these networks to operational in 2007,
        but
        we can provide no assurance that we will be successful in reestablishing
        the
        Mali, Gabon and Cameroon networks. We anticipate that our failure to provide
        termination services in Mali, Gabon and Cameroon through our VoIP networks
        will
        significantly harm our business and results of operations in the
        2007.
 
 During
        2007, we our focusing our efforts on adding further routes in countries that
        do
        not present that same political risks and instability associated with our
        operations in Mali, Gabon and Cameroon, Africa.
 
 **Subsidiary
        Spin-off**
 
 In
        April
        2005, our management was presented with an opportunity where Teliphone would
        enter into a merger with a wholly-owned subsidiary of OSK Capital II Corp.
        (“OSK”), a public reporting company under Section 12(g) of the Securities
        Exchange Act of 1934. On April 28, 2005, OSK completed its acquisition of
        Teliphone, pursuant to an Agreement and Plan of Merger and Reorganization.
        At
        the effective time of the merger, OSK acquired all of the outstanding shares
        of
        Teliphone and Teliphone merged with OSK II Acquisition Corp., a Florida
        corporation and wholly-owned subsidiary of OSK. OSK issued 25,000,000 common
        shares in exchange for all of the issued and outstanding shares of Teliphone
        and
        these shares of OSK were issued to the shareholders Teliphone shareholders
        on a
        pro rata basis. We owned 100 common shares of the 104 common shares issued
        and
        outstanding in Teliphone. As a result, we received 24,038,462 shares of OSK.
        Following the effectiveness of the merger, OSK had 30,426,000 common shares
        issued and outstanding. Consequently, Teliphone became a wholly owned subsidiary
        of OSK and OSK was a majority-owned subsidiary of our company.
 
 On
        August
        21, 2006, OSK changed its name to Teliphone Corp. Thereafter, we acquired
        another 1,699,323 shares of Teliphone Corp. in consideration for loans
        previously advanced.
 
 Our
        management submitted to our shareholders a proposal to spin-off our
        majority-owned subsidiary, Teliphone Corp., at the annual meeting on October
        23,
        2006. Our board of directors believed that spinning-off Teliphone would
        accomplish an important objective. The spin-off would enable Teliphone to
        focus
        on handling the origination, management, and billing of calls and services
        offered to our retail customers and allow us to concentrate on building an
        international VoIP focused primarily on call termination services for wholesale
        customers. This will allow both companies that have operations that are focused
        on different objectives to better prioritize the allocation of their management
        and their financial resources for achievement of their corporate objectives.
        This proposal was approved by our shareholders at the annual meeting on October
        23, 2006 and each shareholder received on a pro rata basis restricted shares
        of
        Teliphone Corp.
  6
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            of Contents
  ***Industry
        Overview***
 
 One
        of
        the outgrowths from the rapid deployment of broadband connectivity in the
        United
        States and abroad has been the accelerated adoption of VoIP. VoIP is a
        technology that enables voice communications over the Internet through the
        conversion of voice signals into data packets. The data packets are transmitted
        over the Internet and converted back into voice 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 allows for the transmission of voice
        signals over these same packet switched networks and, in doing so, provides
        an
        alternative to traditional telephone networks.
 
 VoIP
        technology presents several advantages over the technology used in traditional
        wireline telephone networks that enable VoIP providers to operate with lower
        capital expenditures and operating costs while offering both traditional
        and
        innovative service features. Traditional networks, which require that each
        user's telephone be connected to a central office circuit switch, are expensive
        to build and maintain. In contrast, VoIP networks route calls over the Internet
        using either softswitches or software, both of which are less expensive than
        circuit switches. In addition, traditional wireline networks
        use dedicated circuits that allot fixed bandwidth to a call throughout its
        duration, whether or not the full bandwidth is being used throughout the
        call to
        transmit voice signals. VoIP networks use bandwidth more efficiently, allocating
        it instead based on usage at any given moment. VoIP technology also presents
        the
        opportunity to offer customers attractive features that traditional telephone
        networks cannot easily support, such as online call management and
        self-provisioning (the ability for customers to change or add service features
        online).
 
 Traditional
        telephone companies originally avoided the use of VoIP networks for transmitting
        voice signals due to the potential for data packets to be delayed or lost,
        preventing real-time transmission of the voice data and leading to poor sound
        quality. While a delay of several seconds in downloading a webpage or receiving
        an e-mail generally is acceptable to a user, a delay of more than a millisecond
        during a live, two-way voice conversation is not satisfactory. Original VoIP
        services, which were pioneered in the mid-1990s, were typically only PC-to-PC,
        requiring two personal computers to be in use at the same time. Early
        international calling card services, which allowed users to dial abroad for
        significantly discounted rates, also relied on a form of VoIP technology.
        These
        initial VoIP services often suffered from dropped calls, transmission delays
        and
        poor sound quality because of bandwidth limitations. As a result, VoIP initially
        developed a poor reputation for service quality relative to traditional fixed
        line telephone service. Subsequent increases in bandwidth, driven by increased
        broadband penetration, and improvements in packet switching, signaling, and
        compression technology have significantly enhanced the quality and reliability
        of VoIP calls.
 
 Today,
        VoIP technology is used in the backbone of many traditional telephone networks,
        and VoIP services are offered to residential and business users by a wide
        array
        of service providers, including established telephone service providers.
        These
        VoIP providers include traditional local and long distance phone companies,
        established cable companies, Internet service providers and alternative voice
        communications providers.
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  While
        all
        of these companies provide residential VoIP communications services, each
        group
        provides those services over a different type of network, resulting in important
        differences in the characteristics and features of the VoIP communications
        services that they offer. Traditional wireline telephone companies offering
        VoIP
        services to consumers do so using their existing broadband DSL networks.
        Similarly, cable companies offering VoIP communications services use their
        existing cable broadband networks. Because these companies own and control
        the
        broadband network over which the VoIP traffic is carried between the customer
        and public switched telephone network, they have the advantage of controlling
        a
        substantial portion of the call path and therefore being better able to control
        call quality. In addition, many of these providers are able to offer their
        customers additional bandwidth dedicated solely to the customer's VoIP service,
        further enhancing call quality and preserving the customer's existing bandwidth
        for other uses. However, these companies typically have high capital
        expenditures and operating costs in connection with their networks. In addition,
        depending on the structure of their VoIP networks, the VoIP services provided
        by
        some of these companies can only be used from the location at which the
        broadband line they provide is connected.
 
 Like
        traditional telephone companies and cable companies offering VoIP services,
        alternative voice communications providers also connect their VoIP traffic
        to
        the public switched telephone network so that their customers can make and
        receive calls to and from non-VoIP users. Unlike traditional telephone companies
        and cable companies, however, alternative voice communications providers
        do not
        own or operate a private broadband network. Instead, the VoIP services offered
        by these providers use the customer's existing broadband connection to carry
        call traffic from the customer to their VoIP networks. These companies do
        not
        control the "last mile" of the broadband connection, and, as a result, they
        have
        less control over call quality than traditional telephone
        or cable companies do. However, these companies have the operating advantage
        of
        low capital expenditure requirements and operating costs.
 
 Internet
        service providers generally offer or have announced intentions to offer VoIP
        services principally on a PC-to-PC basis. These providers generally carry
        their
        VoIP traffic for the most part over the public Internet, with the result
        that
        VoIP services are often offered for free, but can only be used with other
        users
        of that provider's services. Many of these providers offer a premium service
        that allows customers to dial directly into a public switched telephone network.
        In addition, while no special adapters or gateways are required, often customers
        must use special handsets, headsets or embedded microphones through their
        computers, rather than traditional telephone handsets.
 
 ***Reliance
        on Technology and Computer Systems***
 
 We
        rely
        on specialized telecommunications and computer technology to meet the needs
        of
        our consumers. We will need to continue to select, invest in and develop
        new and
        enhanced technology to remain competitive. Our future success will also depend
        on our operational and financial ability to develop information technology
        solutions that keep pace with evolving industry standards and changing client
        demands. Our business is highly dependent on our computer and telephone
        equipment and software systems, the temporary or permanent loss of which
        could
        materially and adversely affect our business.
  8
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  ***Competition***
 
 The
        telecommunications industry is highly competitive, rapidly evolving and subject
        to constant technological change and to intense marketing by different providers
        of functionally similar services. Since there are few, if any, substantial
        barriers to entry, except in those markets that have not been subject to
        governmental deregulation, we expect that new competitors are likely to enter
        our markets. Most, if not all, of our competitors are significantly larger
        and
        have substantially greater market presence and longer operating history as
        well
        as greater financial, technical, operational, marketing, personnel and other
        resources than we do.
 
 Our
        use
        of VoIP technology and our proprietary systems and products enables us to
        provide customers with competitive pricing for telecommunications services.
        Nonetheless, there can be no assurance that we will be able to successfully
        compete with major carriers in present and prospective markets. While there
        can
        be no assurances, we believe that by offering competitive pricing we will
        be
        able to compete in our present and prospective markets.
 
 ***Patents,
        Licenses, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor
        Contracts***
 
 We
        do not
        own, legally or beneficially, any patent or trademark.
 
 ***Research
        and Development***
 
 We
        did
        incurred research and development expenditures of $124,232 in the fiscal
        year
        ended December 31, 2006 and $103,006 in the fiscal year ended December 31,
        2005.
 
 ***Existing
        and Probable Governmental Regulation***
 
 ***Overview
        of Regulatory Environment***
 
 Traditional
        telephone service historically has been subject to extensive federal and
        state
        regulation, while Internet services generally have been subject to less
        regulation. Because some elements of VoIP resemble the services provided
        by
        traditional telephone companies and others resemble the services provided
        by
        Internet service providers, the VoIP industry has not fit easily within the
        existing framework of telecommunications law and until recently has developed
        in
        an environment largely free from regulation.
 
 The
        Federal Communications Commission, or FCC, the U.S. Congress and various
        regulatory bodies in the states and in foreign countries have begun to assert
        regulatory authority over VoIP providers and are continuing to evaluate how
        VoIP
        will be regulated in the future. In addition, while some of the existing
        regulation concerning VoIP is applicable to the entire industry, many rulings
        are limited to individual companies or categories of service. As a result,
        both
        the application of existing rules to us and our competitors and the effects
        of
        future regulatory developments are uncertain.
  9
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  ***Regulatory
        Classification of VoIP Services***
 
 On
        February 12, 2004, the FCC initiated a rulemaking proceeding concerning the
        provision of voice and other services and applications utilizing Internet
        Protocol technology. As part of this proceeding, the FCC is considering whether
        VoIP services like ours should be classified as information services or
        telecommunications services. We believe our service should be classified
        as an
        information service. If the FCC decides to classify VoIP services like ours
        as
        telecommunications services, we could become subject to rules and regulations
        that apply to providers of traditional telephony services. This could require
        us
        to restructure our service offering or raise the price of our service, or
        could
        otherwise significantly harm our business.
 
 While
        the
        FCC has not reached a decision on the classification of VoIP services like
        ours,
        it has ruled on the classification of specific VoIP services offered by other
        VoIP providers. The FCC has drawn distinctions among different types of VoIP
        services, and has concluded that some VoIP services are telecommunications
        services while others are information services. The FCC's conclusions in
        those
        proceedings do not determine the classification of our service, but they
        likely
        will inform the FCC's decision regarding VoIP services like ours.
 
 ***International
        Regulation***
 
 The
        regulation of VoIP services is evolving throughout the world. The introduction
        and proliferation of VoIP services have prompted many countries to reexamine
        their regulatory policies. Some countries do not regulate VoIP services,
        others
        have taken a light-handed approach to regulation, and still others regulate
        VoIP
        services the same as traditional telephony. In some countries, VoIP services
        are
        prohibited. Several countries have recently completed or are actively holding
        consultations on how to regulate VoIP providers and services. We primarily
        provide VoIP services internationally in Canada and various African
        nations.
 
 ***Other
        Foreign Jurisdictions***
 
 Our
        operations in foreign countries must comply with applicable local laws in
        each
        country we serve. The communications carriers with which we associate in
        each
        country is licensed to handle international call traffic, and takes
        responsibility for all local law compliance. For that reason we do not believe
        that compliance with the laws of foreign jurisdictions will affect our
        operations or require us to incur any significant expense.
 
 ***Compliance
        with Environmental Laws***
 
 We
        did
        not incur any costs in connection with the compliance with any federal, state,
        or local environmental laws.
 
 ***Employees***
 
 We,
        together with our subsidiary entities, currently have 1 full-time employee.
        We
        retain consultants to assist in our operations as needed. Our employees are
        not
        represented by labor unions or collective bargaining
        agreements.
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  **Item2.
        Description of Property**
 
 We
        currently lease our executive offices located at 4150
        Ste-Catherine Street West, Suite 200, Montreal, Quebec, Canada, H3Z 0A1.
        We pay
        monthly rent for this property in the amount of $500.
 
 **Item3.
        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.
 
 **Item4.
        Submission of Matters to a Vote of Security
        Holders**
 
 On
        October 23, 2006, we held the annual meeting of our security holders. The
        meeting was called for the purpose of electing directors, confirming the
        appointment of Michael Pollack, CPA as the company’s independent certified
        public accountant for the fiscal year ended December 31, 2006, to consider
        a
        proposal to amend the Articles of Incorporation to increase the number of
        shares
        of common stock authorized for issuance from 50,000,000 to 100,000,000, to
        consider a plan to spin-off Teliphone Corp., a majority owned subsidiary.
        The
        total number of shares of common stock outstanding on the record date, September
        12, 2006, was 49,969,985 shares. The number of votes represented at the meeting
        was 28,853,345 shares, or 57.74% of the shares eligible to vote.
 
 The
        following individuals were elected as directors with the votes being as
        follows:
 
 Nominee
              Votes
                  Cast For
              Votes
                  Cast Against
              AbstainGeorge
                  Metrakos
              28,746,645
              0
              106,700Simon
                  Lamarche
              28,746,645
              0
              106,700
 
 The
        appointment of Michael Pollack, CPA as the Company’s independent certified
        public accountant for the fiscal year ended December 31, 2006 was confirmed,
        with the votes cast being as follows:
 
 Votes
                  Cast For
              Votes
                  Cast Against
              Abstain28,737,545
              0
              115,800
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  With
        respect to the proposed Amendment to the Articles of Incorporation to increase
        the number of shares of common stock authorized for issuance from 50,000,000
        to
        100,000,000, votes were cast for confirmation as follows:
 
 Votes
                  Cast For
              Votes
                  Cast Against
              Abstain28,813,334
              40,011
              0
 
 With
        respect to the proposal to approve the spin-off of Teliphone Corp., our
        majority-owned subsidiary, votes were cast for confirmation as
        follows:
 
 Votes
                  Cast For
              Votes
                  Cast Against
              Abstain28,847,845
              5,500
              0
 
 No
        other
        matters were acted upon by our security holders at our annual meeting.
  12
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  **PART
        II**
 
 **Item5.
        Market for Common Equity and Related Stockholder
        Matters**
 
 **Market
        Information**
 
 Our
        common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
        sponsored by the NASD. The OTCBB is a network of security dealers who buy
        and
        sell stock. The dealers are connected by a computer network that provides
        information on current "bids" and "asks", as well as volume information.
        Our
        shares are quoted on the OTCBB under the symbol “UAMA.”
 
 The
        following table sets forth the range of high and low bid quotations for our
        common stock for each of the periods indicated as reported by the OTCBB.
        These
        quotations reflect inter-dealer prices, without retail mark-up, mark-down
        or
        commission and may not necessarily represent actual transactions.
 
 Fiscal
                  Year Ending December 31, 2006Quarter
                  Ended
              
              High
                  $
              
              Low
                  $March
                  31, 2006
              
              0.08
              
              0.052June
                  30, 2006
              
              0.0651
              
              0.042September
                  30, 2006
              
              0.07
              
              0.042December
                  31, 2006
              
              0.071
              
              0.04Fiscal
                  Year Ended December 31, 2005Quarter
                  Ended
              
              High
                  $
              
              Low
                  $March
                  31, 2005
              
              0.155
              
              0.102June
                  30, 2005
              
              0.112
              
              0.05September
                  30, 2005
              
              0.075
              
              0.043December
                  31, 2005
              
              0.07
              
              0.04
  **Penny
        Stock**
 
 The
        SEC
        has adopted rules that regulate broker-dealer practices in connection with
        transactions in penny stocks. Penny stocks are generally equity securities
        with
        a market price of less than $5.00, other than securities registered on certain
        national securities exchanges or quoted on the NASDAQ system, provided that
        current price and volume information with respect to transactions in such
        securities is provided by the exchange or system. The penny stock rules require
        a broker-dealer, prior to a transaction in a penny stock, to deliver a
        standardized risk disclosure document prepared by the SEC, that: (a) contains
        a
        description of the nature and level of risk in the market for penny stocks
        in
        both public offerings and secondary trading; (b) contains a description of
        the
        broker's or dealer's duties to the customer and of the rights and remedies
        available to the customer with respect to a violation of such duties or other
        requirements of the securities laws; (c) contains a brief, clear, narrative
        description of a dealer market, including bid and ask prices for penny stocks
        and the significance of the spread between the bid and ask price;
  13
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  (d)
        contains a toll-free telephone number for inquiries on disciplinary actions;
        (e)
        defines significant terms in the disclosure document or in the conduct of
        trading in penny stocks; and (f) contains such other information and is in
        such
        form, including language, type size and format, as the SEC shall require
        by rule
        or regulation. The broker-dealer also must provide, prior to effecting any
        transaction in a penny stock, the customer with (a) bid and offer quotations
        for
        the penny stock; (b) the compensation of the broker-dealer and its salesperson
        in the transaction; (c) the number of shares to which such bid and ask prices
        apply, or other comparable information relating to the depth and liquidity
        of
        the market for such stock; and (d) a monthly account statement showing the
        market value of each penny stock held in the customer's account.
 
 In
        addition, the penny stock rules require that prior to a transaction in a
        penny
        stock not otherwise exempt from those rules, the broker-dealer must make
        a
        special written determination that the penny stock is a suitable investment
        for
        the purchaser and receive the purchaser's written acknowledgment of the receipt
        of a risk disclosure statement, a written agreement as to transactions involving
        penny stocks, and a signed and dated copy of a written suitability
        statement.
 
 These
        disclosure requirements may have the effect of reducing the trading activity
        for
        our common stock. Therefore, stockholders may have difficulty selling our
        securities.
 
 **Holders
        of Our Common Stock**
 
 As
        of
        December 31, 2006, we had approximately three hundred and seventy holders
        (370)
        of record of our common stock which includes those stockholders who hold
        shares
        in street name.
 
 **Dividends**
 
 We
        have
        not declared any dividends since our incorporation. There are no dividend
        restrictions that limit our ability to pay dividends on our common stock
        in the
        Articles of Incorporation or Bylaws. Chapter 607 of Title 36 of the Florida
        Statutes does provide limitations our ability to declare dividends. Section
        607.06401 of Chapter 607 prohibits us from declaring dividends where, after
        giving effect to the distribution of the dividend:
 
 1.
              We
                  would not be able to pay our debts when they became due in the
                  usual
                  course of business; or2.
              Our
                  total assets would be less than the sum of its total liabilities
                  plus the
                  amount that would be needed, if we were to be dissolved at the
                  time of
                  distribution, to satisfy the preferential rights upon dissolution
                  of
                  stockholders whose preferential rights are superior to those receiving
                  the
                  distribution.
 
 At
        the
        present time, we have no shareholders who have rights preferential to those
        of
        the common shareholders.
 
 Section
        607.0623 of Chapter 607 allows the board of directors to issue shares of
        stock
        pro rata to our shareholders as a share dividend.
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  **Recent
        Sales of Unregistered Securities**
 
 The
        information set forth below relates to our issuances of securities without
        registration under the Securities Act of 1933 during the reporting period
        which
        were not previously included in a Quarterly Report on Form 10-QSB or Current
        Report on Form 8-K.
 
 In
        November 2006, we issued 1,110,000 shares of restricted common stock to four
        consultants for services rendered. Included in this issuance were 500,000
        shares
        of our common stock issued to Metratech Business Solutions, a private company
        controlled by Mr. George Metrakos, as compensation for services rendered.
        These
        shares were issued pursuant to Section 4(2) of the Securities Act. We did
        not
        engage in any general solicitation or advertising. We issued the stock
        certificates and affixed the appropriate legends to the restricted stock.
 
 **Securities
        Authorized for Issuance Under Equity Compensation Plans**
 
 The
        following table provides information about our compensation plans under which
        shares of common stock may be issued upon the exercise of options as of December
        31, 2006.
 
 **Equity
        Compensation Plans as of December 31, 2006**
 A
              B
              C**Plan
                  Category**
              **Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights**
              **Weighted-average
                  exercise price of outstanding options, warrants and
                  right**
              **Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (A))**Equity
                  compensation plans
                approved
                  by security
                holders
              -
              -
              -Equity
                  compensation plans
                not
                  approved by security
                holders
              -
              -
              -Total
              -
              -
              -
 
 As
        of
        December 31, 2006, we had no existing equity compensation plans and had not
        issued as compensation for services rendered to any employee, executive officer,
        member of our board of directors, or consultant any options, warrants, or
        other
        convertible securities exercisable into shares of our common stock.
  15
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  **Item6.
        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. 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.
  16
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  Our
        management believes that we can successfully operate within the Wholesale
        Telecommunications Market as a result of the following:
 
 ·
            There
                is a natural migration in the wholesale telecommunications marketplace
                to
                utilize the internet as the main network between telecommunications
                carriers due to its lower cost of operation than traditional networks.
                We
                specialize in the deployment of internet-based technologies. ·
            Developing
                nations, primarily in Africa, Latin and South America, are confronted
                with
                the need to upgrade their telecommunications technologies resulting
                in a
                need for support in this venture over the next 3-5 years, producing
                solid
                opportunities for us to leverage our knowledge in order to solidify
                long
                term consulting mandates and direct route termination capabilities
                with
                these countries. 
 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 have 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.
 
 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 are working to restore
        these networks to operational in 2007, but we can provide no assurance that
        we
        will be successful in reestablishing the Mali, Gabon and Cameroon networks.
        We
        anticipate that our failure to provide termination services in Mali, Gabon
        and
        Cameroon through our VoIP networks will significantly harm our business and
        results of operations in the 2007.
 
 During
        2007, we our focusing our efforts on adding further routes in countries that
        do
        not present that same political risks and instability associated with our
        operations in Mali, Gabon and Cameroon, Africa.
 
 **Results
        of Operations for the Years Ended December 31, 2006 and
        2005**
 
 For
        the
        year ended December 31, 2006, we generated total revenue of $19,991,191,
        compared to revenue of $4,845,485 for the year ended December 31, 2005. Our
        revenue was generated by sales of retail domestic and international voice
        and
        data products and services using VoIP.  Our increase in revenue for the
        year ended December 31, 2006 when compared to the same reporting period in
        the
        prior year is primarily attributable to increases in sales of VoIP termination
        services in our both our brokered international telecom routes as well as
        our
        direct 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
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  local
        wireline and mobile operators, such as our direct routes in Mali, Gabon and
        Cameroon, Africa. During the year ending December 31, 2006, $17,146,798 of
        revenues were attributed to our brokered routes and $2,555,337 of revenues
        were
        attributed to our direct routes, compared to the previous year where the
        wholesale revenue of $4,611,979 was generated entirely from our CaribbeanONE
        network, our first direct route which is no longer operational., Our remaining
        revenues were generated from our majority-owned subsidiary, Teliphone Corp.,
        during the first 10 months of the year ended December 31, 2006 of $372,335
        compared to 12 months of operations of Teliphone Corp. in 2005 of $233,506.
        In
        October 2006, we completed the spin-off of our majority-owned subsidiary,
        Teliphone Corp.
 
 Our
        total
        cost of sales for the year ended December 31, 2006 was $18,307,252 compared
        to
        $4,640,709 for the year ended December 31, 2005. This resulted in a gross
        profit
        of $1,683,939 and $204,776 for the years ended December 31, 2006 and 2005
        respectively. The increase in gross profit is a result of increase sales
        of our
        wholesale termination services.
 
 We
        incurred operating expenses in the amount of $2,291,498 for the year ended
        December 31, 2006, compared to $1,726,296 for the year ended December 31,
        2005.
        The increase in our operating expenses is primarily attributable to increases
        in
        commissions paid on the increased revenues as well as increases in management
        fees. We incurred research and development expenditures of $124,232 in the
        year
        ended December 31, 2006, while incurring $103,006 in research and development
        expenditures in the prior year. These research and development expenditures
        were
        incurred by our majority-owned subsidiary, Teliphone Corp., in connection
        with
        its efforts to continuously develop its core call management and call routing
        technology. As a result of spinning-off our majority-owned subsidiary, Teliphone
        Corp, on October 30, 2006, there will be no further consolidation of their
        results of operations. We paid $1,177,397 in commissions and wages and
        management fees for the year ended December 31, 2006, compared to $573,446
        for
        the year ended December 31, 2005.  We paid commissions and management fees
        based upon sales of VoIP termination services. As a result of a significant
        increase in the sales of VoIP termination services, our commission and
        management fees paid correspondingly increased.
  Our
        net
        loss for the year ended December 31, 2006 was $614,269, compared to a net
        loss
        of $1,442,255 in the prior year.
  **Liquidity
        and Capital Resources**
 
 As
        of
        December 31, 2006, we had current assets of $1,938,407. Our current assets
        consisted of accounts receivable in the amount of $1,396,332 and prepaid
        expenses and other current assets of $40,795. Our total current liabilities
        as
        of December 31, 2006 were $3,125,632. As a result, on December 31, 2006 we
        had
        working capital deficit of $1,187,225.
 
 Operating
        activities used $26,211 in cash for the year ended December 31, 2006. Our
        net
        loss of $614,269 for the year ended December 31, 2006 was the primary component
        of our negative operating cash flow. Investing activities during the year
        ended
        December 31, 2006 used $202,389 for the acquisition of fixed assets. Cash
        flows
        provided by financing activities during the year ended December 31, 2006
        primarily consisted of $249,003 for proceeds from loans
        payable-
  18
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  related
        parties in the amount of $196,470. We primarily relied on revenues and debt
        financing to fund our operations during the year ended December 31, 2006.
  The
        underlying drivers that resulted in material changes and the specific inflows
        and outflows of cash in the year ended December 31, 2006 are as
        follows:
 
 a.
              Property
                  acquisition costs,
 
 b.
              Increase
                  in accounts payable attributable to increased sales, and
 
 c.
              We
                  obtained financing from the issuance of loans from related parties.
                  Our
                  management believes that additional issuance of stock and/or debt
                  financing may be required to satisfy our projected expenditures
                  in
                  2007.
 
 As
        of the
        time of this Annual Report, our management believes that we have insufficient
        capital to support our operations at the current level over the next twelve
        months. The success of our business is contingent upon us obtaining additional
        financing. We intend to fund operations through debt and/or equity financing
        arrangements, which may be insufficient to fund our capital expenditures,
        working capital, or other cash requirements for the year ending December
        31,
        2007. There can be no assurance that any additional financing will be available
        to us on acceptable terms, or at all. We do not have any formal commitments
        or
        arrangements for the sales of stock or the advancement or loan of funds at
        this
        time.
 
 **Off
        Balance Sheet Arrangements**
 
 As
        of
        December 31, 2006, there were no off balance sheet arrangements.
 
 **Going
        Concern**
 
 As
        shown
        in the accompanying consolidated financial statements, we have incurred
        recurring losses of $614,269 and $1,422,255 for the years ended December
        31,
        2006 and 2005, and have a working capital deficiency of $1,187,225 as of
        December 31, 2006. We have recently emerged from the development stage and
        have
        just started generating revenues. There is no guarantee that we will be able
        to
        raise enough capital or generate revenues to sustain our operations. These
        conditions raise substantial doubt about our ability to continue as a going
        concern for a reasonable period.
 
 Management
        believes that our capital requirements will depend on many factors. These
        factors include the increase in sales through existing channels as well as
        our
        ability to continue to expand our presence in the international wholesale
        market
        with direct routes and consulting mandates with developing countries. Our
        strategic relationships with telecommunications carriers has permitted us
        to
        achieve consistent quarterly growth in revenues.
 
 In
        the
        near term, we will continue to pursue bridge financing to assist us in meeting
        our current working capital needs. Our ability to continue as a going concern
        for a reasonable period is dependent upon management’s ability to raise
        additional interim capital and, ultimately, achieve
  19
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  profitable
        operations. There can be no assurance that management will be able to raise
        sufficient capital, under terms satisfactory to us, if at all.
 
 **Critical
        Accounting Policies**
 
 In
        December 2001, the SEC requested that all registrants list their three to
        five
        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.
 
 **Currency
        Translation**
 
 For
        subsidiaries outside the United States that prepare financial statements
        in
        currencies other than the U.S. dollar, we
        translate 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. Our reporting currency is that of the US dollar while our
        functional currency is that of the Canadian dollar for our subsidiaries.
        We
        record these translation adjustments as accumulated other comprehensive income
        (loss). Gains and losses from foreign currency transactions commenced in
        2004
        when we utilized a Canadian subsidiary to record all of the transactions.
        We
        recognized a gain (loss) of $31,098 and $112,350 for the years ended December
        31, 2006 and 2005, respectively.
 
 **Revenue
        Recognition**
 
 In
        2004,
        when we emerged from the development stage with the acquisition of American
        United Corporation/ 3874958 Canada Inc. and after assuming ownership of 3894517
        Canada Inc., we began to recognize revenue from VoIP services when the services
        were rendered and collection was reasonably assured in accordance with SAB
        101.
 
 There
        are
        limited estimates required in connection with recognition of revenue because
        voice traffic is measured in automated switches and routers, and contractual
        rates for traffic are used to bill or declare revenue on a monthly basis.
        However, for certain voice contracts, historical traffic may be retroactively
        re-rated within a contract period. This traffic re-rating is calculated and
        recognized immediately in the month the new contractual rate is established.
        Although relatively infrequent, there can be material disputes with customers
        over volume or traffic recognized on our customers’ switches. Our practice is to
        maintain recorded revenue based on our traffic data until the merits of a
        dispute are identified.
 
 **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
  20
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  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.
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  **Item7.
        Financial Statements**
 
 Index
        to
        Financial Statements:
  **Audited
                  Financial Statements:**F-1
              Report
                  of Independent Registered Public Accounting
                  FirmF-2
              Balance
                  Sheet as of December 31, 2006F-3
              Statements
                  of Operations - Years Ended December 31, 2006 and
                  December 31, 2005F-4
              Statement
                  of Stockholders’ Equity (Deficit) and Comprehensive
                  Loss for the Years Ended December 31, 2006 and December 31, 2005F-5
              Statements
                  of Cash Flows for the Years Ended December 31, 2006
                  and December 31, 2005F-6
              Notes
                  to Financial
                  Statements


22
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**REPORTOF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**





Board
      of
      Directors


United
      American Corporation


Montreal,
      Quebec CANADA





I
      have
      audited the accompanying consolidated balance sheet of United American
      Corporation (the “Company”) as of December 31, 2006 and the related consolidated
      statements of operations, changes in stockholders’ equity (deficit), and cash
      flows for the years ended December 31, 2006 and 2005. These consolidated
      financial statements are the responsibility of the Company’s management. My
      responsibility is to express an opinion on these consolidated financial
      statements based on my audits.





I
      conducted my audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that I
      plan
      and perform the audits to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. I was
      not
      engaged to perform an audit of the Company’s internal control over financial
      reporting. My audits included consideration of internal control over financial
      reporting as a basis for designing audit procedures that are appropriate in
      the
      circumstances, but not for the purpose of expressing an opinion on the
      effectiveness of the Company’s internal control over financial reporting.
      Accordingly, I express no such opinion. An audit includes examining, on a test
      basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. I believe that my audits provide a reasonable
      basis for my opinion.





In
      my
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of United American
      Corporation as of December 31, 2006, and the results of its consolidated
      statements of operations, changes in stockholders’ equity (deficit), and cash
      flows for the years ended December 31, 2006 and 2005 in conformity with U.S.
      generally accepted accounting principles.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 1 to the
      consolidated financial statements, the Company has sustained operating losses
      and capital deficits that raise substantial doubt about its ability to continue
      as a going concern. Management’s plans in regard to these matters are also
      described in Note 1. The consolidated financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





As
      discussed in Notes 1 and 13 to the consolidated financial statements, the
      Company has restated its consolidated financial statements for the
      extinguishment of payables that the Company wrote off in the year ended December
      31, 2003. The Company has received legal opinions that determine these
      liabilities to no longer be outstanding, however, is performing revised lien
      searches and performing further due diligence on the existence of these
      liabilities. Until the time that the Company receives further documented
      evidential matter that these liabilities are in fact no longer considered to
      be
      liabilities, the Company has re-instated these liabilities.





/s/
      Michael Pollack CPA


Cherry
      Hill, NJ


April
      16,
      2007




F-1
 Table
          of Contents
 **UNITED
        AMERICAN CORP**
 ****CONSOLIDATED
        BALANCE SHEET****
 **DECEMBER
        31, 2006**


**ASSETS****(IN
                US$)**Current
                Assets:Cash
                and cash equivalents
            $
            69,553Accounts
                receivable, net
            
            1,396,332Interest
                receivable
            
            15,000Prepaid
                expenses and other current assets
            
            40,795Loan
                receivable - related company
            
            416,727Total
                Current Assets
            
            1,938,407Fixed
                assets, net of depreciation
            
            419,942**TOTAL
                ASSETS**
            $
            2,358,349**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)****LIABILITIES**Current
                Liabilities:Loans
                payable - non-related parties
            $
            138,429Loans
                payable - related parties
            
            373,225Other
                payables
            
            625,964Convertible
                debentures
            
            90,961Derivative
                liability
            
            27,688Accounts
                payable and accrued expenses
            
            1,869,365Total
                Current Liabilities
            
            3,125,632**Total
                Liabilities**
            
            3,125,632**STOCKHOLDERS'
                EQUITY (DEFICIT)**Common
                  stock, $.001 Par Value; 100,000,000 shares authorized
                and
                  51,079,985 shares issued and outstanding
            
            51,080Additional
                paid-in capital
            
            4,865,893Accumulated
                deficit
            
            (5,754,376)Accumulated
                other comprehensive income (loss)
            
            70,120**Total
                Stockholders' Equity (Deficit)**
            
            (767,283)**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
            $
            2,358,349




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


F-2
 Table
          of Contents


**UNITED
        AMERICAN CORPORATION**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS AND**
 **COMPREHENSIVE
        INCOME (LOSS)**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**
  **IN
                  US$****2006**
              
              **2005****OPERATING
                  REVENUES**Sales
              $
              19,991,191
              
              $
              4,845,485**COST
                  OF SALES**Inventory,
                  beginning of period
              
              51,652
              
              
              44,059Purchases
              
              18,255,600
              
              
              4,648,302Inventory,
                  end of period
              
              -
              
              
              (51,652)**Total
                  Cost of Sales**
              
              18,307,252
              
              
              4,640,709**GROSS
                  PROFIT**
              
              1,683,939
              
              
              204,776**OPERATING
                  EXPENSES**Selling
                  and promotion
              
              43,659
              
              
              135,274Research
                  and development
              
              124,232
              
              
              103,006Professional
                  and consulting fees
              
              474,364
              
              
              642,902Commissions
                  and wages
              
              1,177,397
              
              
              573,446Other
                  general and administrative expenses
              
              218,096
              
              
              81,116Depreciation,
                  amortization and impairment
              
              253,700
              
              
              190,552**Total
                  Operating Expenses**
              
              2,291,448
              
              
              1,726,296**LOSS
                  BEFORE OTHER INCOME (EXPENSE)**
              
              (607,509)
              
              
              (1,521,520)**OTHER
                  INCOME (EXPENSE)**Loss
                  on derivative liability
              
              (18,649)
              
              
              -Interest
                  income
              
              15,000
              
              
              -Interest
                  expense
              
              (124,505)
              
              
              (12,000)**Total
                  Other Income (Expense)**
              
              (128,154)
              
              
              (12,000)**NET
                  LOSS BEFORE PROVISION FOR INCOME TAXES **AND
                  MINORITY INTEREST****(735,663)
              
              
              (1,533,520)Minority
                  interest
              
              121,394
              
              
              111,265**NET
                  LOSS BEFORE PROVISION FOR INCOME TAXES**
              
              (614,269)
              
              
              (1,422,255)**Provision
                  for Income Taxes**
              
              -
              
              
              -**NET
                  LOSS APPLICABLE TO COMMON SHARES**
              $
              (614,269)
              
              $
              (1,422,255)**NET
                  LOSS PER BASIC AND DILUTED SHARES**
              $
              (0.01)
              
              $
              (0.03)**WEIGHTED
                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING**
              
              50,109,875
              
              
              48,067,108**COMPREHENSIVE
                  INCOME (LOSS)**Net
                  loss
              $
              (614,269)
              
              $
              (1,422,255)Other
                  comprehensive income (loss)Currency
                  translation adjustments
              
              31,098
              
              
              112,350Comprehensive
                  income (loss)
              $
              (583,171)
              
              $
              (1,309,905)




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


F-3
 Table
          of Contents


**UNITED
        AMERICAN CORPORATION**
 **CONSOLIDATED
        STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**
  **IN
                  US$****Common
                  Stock**
              
              **Additional**
                  **Paid-in**
              
              **Accumulated**
              
              **Accumulated**
                    **Other**
                    **Comprehensive****Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Income
                  (Loss)**
              
              **Total**Balance
                  January 1, 2005, as previously reported
              
              44,119,985
              
              $
              44,120
              
              $
              3,751,548
              
              $
              (3,091,888)
              
              $
              (73,328)
              
              $
              630,452Prior
                  period adjustment, see Note 13
              
              -
              
              
              -
              
              
              -
              
              
              (625,964)
              
              
              -
              
              
              (625,964)Balance
                  January 1, 2005, as restated
              
              44,119,985
              
              
              44,120
              
              
              3,751,548
              
              
              (3,717,852)
              
              
              (73,328)
              
              
              4,488Shares
                  issued for services
              
              5,850,000
              
              
              5,850
              
              
              467,900
              
              
              -
              
              
              -
              
              
              473,750Net
                  loss for the year ended December 31, 2005
              
              -
              
              
              -
              
              
              -
              
              
              (1,533,520)
              
              
              112,350
              
              
              (1,421,170)Balance
                  December 31, 2005
              
              49,969,985
              
              
              49,970
              
              
              4,219,448
              
              
              (5,251,372)
              
              
              39,022
              
              
              (942,932)Shares
                  issued for services
              
              1,110,000
              
              
              1,110
              
              
              65,490
              
              
              -
              
              
              -
              
              
              66,600Spin
                  off of Teliphone Corp., see Note 10
              
              -
              
              
              -
              
              
              580,955
              
              
              232,659
              
              
              -
              
              
              813,614Net
                  loss for the year ended December 31, 2006
              
              -
              
              
              -
              
              
              -
              
              
              (735,663)
              
              
              31,098
              
              
              (704,565)Balance
                  December 31, 2006
              
              51,079,985
              
              $
              51,080
              
              $
              4,865,893
              
              $
              (5,754,376)
              
              $
              70,120
              
              $
              (767,283)




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


F-4
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND 2005**


**IN
                US$****2006**
            
            **2005****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                loss
            $
            (614,269)
            
            $
            (1,422,255)**Adjustments
                to reconcile net loss to net cash **(used
                in) operating activities:****Depreciation,
                amortization and impairment
            
            253,700
            
            
            188,979Shares
                issued for services
            
            66,600
            
            
            473,750Loss
                on derivative liability
            
            18,649
            
            
            -**Changes
                in assets and liabilities**(Increase)
                in accounts receivable
            
            (1,228,387)
            
            
            (171,725)(Increase)
                in interest receivable
            
            (15,000)
            
            
            -(Increase)
                decrease in inventory
            
            39,140
            
            
            (7,593)(Increase)
                in prepaid expenses and other current assets
            
            (132,746)
            
            
            (56,086)Increase
                in deferred revenue
            
            10,720
            
            
            -Increase
                  in accounts payable andand accrued expenses
            
            1,575,382
            
            
            454,058Total
                adjustments
            
            588,058
            
            
            881,383**Net
                cash (used in) operating activities**
            
            (26,211)
            
            
            (540,872)**CASH
                FLOWS FROM INVESTING ACTIVITIES**Acquisitions
                of fixed assets
            
            (149,077)
            
            
            (108,673)(Increase)
                in loan receivable - related company
            
            (53,312)
            
            
            -**Net
                cash (used in) investing activities**
            
            (202,389)
            
            
            (108,673)**CASH
                FLOWS FROM FINANCING ACTIVITES**Increase
                (decrease) in bank overdraft
            
            (8,195)
            
            
            16,905Proceeds
                from loan payable, net of repayments
            
            60,728
            
            
            48,987Proceeds
                from loan payable - related parties, net of repayments
            
            196,470
            
            
            (43,760)Proceeds
                from convertible debentures
            
            -
            
            
            331,760**Net
                cash provided by financing activities**
            
            249,003
            
            
            353,892Effect
                of foreign currency
            
            49,150
            
            
            211,399**NET
                  INCREASE (DECREASE) INCASH
                  AND CASH EQUIVALENTS**
            
            69,553
            
            
            (84,254)**CASH
                  AND CASH EQUIVALENTS -BEGINNING
                  OF YEAR**
            
            -
            
            
            84,254**CASH
                AND CASH EQUIVALENTS - END OF YEAR**
            $
            69,553
            
            $
            -**CASH
                PAID DURING THE YEAR FOR:**Interest
                expense
            $
            117,973
            
            $
            12,000**NONCASH
                TRANSACTIONS:**Spin-off
                of Teliphone Corp. at October 30, 2006Cash
            $
            (8,710)
            
            $
            -Accounts
                receivable
            
            18,885
            
            
            -Inventory
            
            12,512
            
            
            -Other
                assets
            
            142,007
            
            
            -Fixed
                assets
            
            97,484
            
            
            -Loans
                payable -related company
            
            (363,415)
            
            
            -Accounts
                payable and accrued expenses
            
            (313,993)
            
            
            -Loans
                payable - related
            
            (155,005)
            
            
            -Deferred
                revenue
            
            (10,720)
            
            
            -$
            (580,955)
            
            $
            -




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


F-5
 Table
          of Contents


**UNITED
        AMERICAN CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2006 AND 2005**


**NOTE
              1-**
            **ORGANIZATION
                AND BASIS OF
                PRESENTATION**




United
      American Corporation (the “Company”) was incorporated under the laws of the
      State of Florida on July 17, 1992 under the name American Financial Seminars,
      Inc. with authorized common stock of 1,000 shares at $1.00 par value. Since
      its
      inception the Company has made several name changes and increased the authorized
      common stock to 50,000,000 shares with a par value of $.001. On February 5,
      2004, the name was changed to United American Corporation.




The
      Company was first organized for the purpose of marketing a software license
      known as “Gnotella”, however, in late 2001 this activity was
      abandoned.




On
      July
      18, 2003, the Company entered into a share exchange agreement with 3874958
      Canada Inc. (a Canadian corporation and an affiliate of the Company by common
      officers) to transfer 26,250,000 shares of its common stock for 100 shares
      of
      American United Corporation (a Delaware corporation and wholly owned subsidiary
      of 3874958 Canada Inc.) which represented 100% of the outstanding shares of
      American United Corporation. The Company in this transaction acquired internet
      telecommunications equipment valued at $874,125. These assets did not go into
      service until 2004. The 26,250,000 shares of the Company were issued into an
      escrow account on October 6, 2003, the effective date of the transaction. Later,
      American United Corporation was dissolved. The equipment value was based on
      an
      independent valuation. The shares issued were to 3874958 Canada Inc., whose
      sole
      owner at the time, was the President and CEO of the Company. This transaction
      did not constitute a reverse merger even though the Company issued in excess
      of
      50% of its then current issued and outstanding shares.




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.




F-6
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**




**NOTE
              1-**
            **ORGANIZATION
                AND BASIS OF PRESENTATION**(CONTINUED)****




On
      August
      27, 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 division focused on providing
      Voice-over-Internet -Protocol (VoIP) calling services to residential and
      business customers.




Teliphone,
      Inc. was founded 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.




In
      March
      2005, Teliphone Inc. issued 4 shares of stock to management. After this
      transaction, the Company owned 96% of Teliphone, Inc. Therefore, a minority
      interest is reflected in the consolidated financial statements. Subsequently,
      on
      April 28, 2005, the Company entered into a merger and reorganization agreement
      with OSK Capital II Corp., a Nevada corporation, where OSK Capital II Corp.
      became a 79% majority owned subsidiary of the Company, and Teliphone, Inc.
      became a wholly owned subsidiary of OSK Capital II Corp. OSK Capital II Corp.
      changed its name to Teliphone Corp. on August 21, 2006.




The
      only
      related party transactions the Company has entered into are advances to the
      entities consolidated within Teliphone Corp. and with 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%.




Teliphone
      Inc., at the time, a wholly owned subsidiary of the Company’s subsidiary
      Teliphone Corp., 3901823 Canada Inc., the holding company of Intelco
      Communications (“3901823”), and Intelco Communications (“Intelco”) entered into
      an agreement (the “Agreement”) on July 14, 2006. Pursuant to the terms of the
      Agreement, Teliphone Inc. agreed to issue 35 class A voting shares of its common
      stock representing 25.2% of Teliphone Inc.’s issued shares to 3901823 in
      exchange for office rent, use of Intelco’s data center for Teliphone Inc.’s
      equipment, and use of Intelco’s broadband telephony network valued at
      approximating $144,000 (CDN$) for the period August 1, 2006 through July 31,
      2007, a line of credit of $75,000 (CDN$), of which $25,000 (CDN$) was already
      drawn upon in July 2006 and repaid on December 2006.





F-7
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
              1-**
            **ORGANIZATION
                AND BASIS OF PRESENTATION**(CONTINUED)****




Teliphone
      Inc. also agreed to make available to the customers of Intelco certain
      proprietary software for broadband telephony use. In lieu of receiving cash
      for
      the licensing of this software, Teliphone Inc. will apply $1 per customer per
      month at a minimum of $5,000 per month. Following a twelve month period, Intelco
      will receive additional shares of class A voting common stock of Teliphone
      Inc.
      for the difference in the value between $144,000 and the total payments credited
      back to Teliphone Inc. The maximum amount of additional shares that can be
      issued to Intelco after the twelve month period is an additional 8.34% of
      Teliphone Inc.’s issued and outstanding shares. In the event that the total
      payments credited back to Teliphone Inc. exceeds $144,000, Intelco will not
      be
      entitled to the issuance of any additional shares of Teliphone Inc. common
      stock.




Teliphone
      Inc. recognized a prepaid expense for the fair value of the shares issued to
      Intelco. The value of the prepaid expense was determined based on the estimated
      cost of the services that Teliphone Inc. is to receive under the Joint Venture
      Agreement entered into for a one-year period of time. The cost was estimated
      at
      $12,000 (CDN$) per month. Teliphone Inc. up through October 30, 2006, the date
      that Teliphone Corp. was spun-off as noted herein, had not used the $12,000
      (CDN$) per month. Prior to the spin-off, the balance remaining in the prepaid
      expense for Intelco was $115,588 US$..




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).




**Going
      Concern**




As
      shown
      in the accompanying consolidated financial statements the Company has incurred
      losses of $614,269 and $1,422,255 for the years ended December 31, 2006 and
      2005, and has a working capital deficiency of $1,187,225 as of December 31,
      2006.




Despite,
      the recurring losses, the Company has been successful in establishing
      distribution channels in Africa and generating significant revenue growth in
      the
      past six months. There is no guarantee that the Company will be able to continue
      to grow at this pace, raise enough capital or generate revenues from other
      areas
      of the world to sustain its operations. These conditions raise substantial
      doubt
      about the Company’s ability to continue as a going concern for a reasonable
      period.





F-8
 Table
          of Contents
 **UNITED
        AMERICAN CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2006 AND 2005**
  **NOTE
                1-**
              **ORGANIZATION
                  AND BASIS OF PRESENTATION**(CONTINUED)****


**Going
      Concern** **(Continued)**




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 distribution points and
      leveraging its technology into the commercial small business segments. The
      Company’s strategic relationships with telecommunications interconnection
      companies, internet service providers and retail sales outlets has permitted
      the
      Company to achieve consistent monthly growth in acquisition of new customers.




In
      the
      near term, the Company will continue to pursue bridge financing, in addition
      to
      the approximately $100,000 it raised through convertible debentures in 2004
      to
      assist them in meeting their current working capital needs. The Company’s
      ability to continue as a going concern for a reasonable period is dependent
      upon
      management’s ability to raise additional interim capital and, ultimately,
      achieve profitable operations. There can be no assurance that management will
      be
      able to raise sufficient capital, under terms satisfactory to the Company,
      if at
      all.




The
      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.




As
      discussed in Note 13 to the consolidated financial statements, the Company
      has
      restated its consolidated financial statements for the extinguishment of
      payables that the Company wrote off in the year ended December 31, 2003. The
      Company has received legal opinions that determine these liabilities to no
      longer be outstanding, however, is performing revised lien searches and
      performing further due diligence on the existence of these liabilities. Until
      the time that the Company receives further documented evidential matter that
      these liabilities are in fact no longer considered to be liabilities, the
      Company has re-instated these liabilities.





**NOTE
              2-**
            ****SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES****





**Principles
      of Consolidation**




The
      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 consolidated financial statements.





F-9
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**


**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**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.




**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.




**Inventory**




Inventory
      is valued at the lower of cost or market determined on a first-in-first-out
      basis. Inventory consisted only of finished goods.




**Fair
      Value of Financial Instruments (other than Derivative Financial
      Instruments)**




The
      carrying amounts reported in the 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.




F-10
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**




**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**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 $31,098 and $112,350
      for
      the years ended December 31, 2006 and 2005, respectively.




**Research
      and Development**




The
      Company annually incurs costs on activities that relate to research and
      development of new products. Research and development costs are expensed as
      incurred. Certain of these costs are reduced by government grants and investment
      tax credits where applicable.




**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.




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.





F-11
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**Accounts
      Receivable** **(Continued)**




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 December
      31, 2006.




**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.




**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 years ended December 31, 2006 and 2005 are included in general
      and administrative expenses in the consolidated statements of operations.




F-12
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**


**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**Concentration
      Risk**




In
      the
      years ended December 31, 2006 and 2005, the Company generated 93% and 100%
      of
      their sales from one customer. A major customer is a customer that represents
      greater than 10% of the total sales.




In
      the
      years ended December 31, 2006 and 2005, the Company incurred 52% and 80% of
      their purchases from one vendor. 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.




**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.





F-13
 Table
          of Contents


**UNITED
        AMERICAN CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2006 AND 2005**





**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**(Loss)
      Per Share of Common Stock**




Basic
      net
      (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 periods presented.




The
      following is a reconciliation of the computation for basic and diluted
      EPS:


**December
                    31,**
                  **2006**
              
              **December
                    31,**
                  **2005**Net
                  loss
              $
              (614,269)
              
              $
              (1,422,255)Weighted-average
                  common sharesOutstanding
                  (Basic)
              
              50,109,875
              
              
              48,067,108Weighted-average
                  common stockEquivalentsConvertible
                  debentures
              
              1,428,571
              
              
              500,000Stock
                  options
              
              -
              
              
              -Warrants
              
              -
              
              
              -Weighted-average
                  common sharesOutstanding
                  (Diluted)
              
              51,538,446
              
              
              48,567,108




**Stock-Based
      Compensation**




On
      December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
      Statement of Financial Accounting Standards No. 123 (Revised 2004),
“ *Share-Based
      Payment* ”
(“SFAS
      123R”). SFAS 123R requires that compensation cost related to share-based payment
      transactions be recognized in the financial statements. Share-based payment
      transactions within the scope of SFAS 123R include stock options, restricted
      stock plans, performance-based awards, stock appreciation rights, and employee
      share purchase plans. The provisions of SFAS 123R, as amended, are effective
      for
      small business issuers beginning as of the next fiscal year after December
      15,
      2005. The Company has adopted the provisions of SFAS 123R for its fiscal year
      ended December 31, 2006. The adoption of this principle had no effect on the
      Company’s operations.





F-14
 Table
          of Contents
 **UNITED
          AMERICAN CORPORATION**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006 AND 2005**





**NOTE
              2-**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**




**Stock-Based
      Compensation** **(Continued)**




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.





F-15
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**


**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 Company believes the
      adoption of SFAS 154 will not have a material impact on its 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 Company will evaluate the impact of SFAS
      155 on its 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 is not expected to have a material impact
      on the consolidated financial statements.




F-16
 Table
          of Contents


**UNITED
        AMERICAN CORPORATION**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2006 AND 2005**




**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). Management does not expect adoption of SFAS 158 to have
      a
      material impact on the Company’s 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 the Company’s
      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 Company does not anticipate
      that SAB 108 will have a material impact on its consolidated financial
      statements.





F-17
 Table
          of Contents
 **UNITED
          AMERICAN CORPORATION**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006 AND 2005**


**NOTE
              3-**
            **FIXED
                ASSETS**




Fixed
      assets as of December 31, 2006 were as follows:





Estimated
                  Useful
                Lives
                  (Years)Computer
                equipment
            
            5
            
            $
            1,075,896Less:
                accumulated depreciation
            
            
            
            
            (655,954)Fixed
                assets, net
            
            
            
            $
            419,942




There
      was
      $253,700 and $190,552 depreciation charged to operations for the years ended
      December 31, 2006 and 2005, 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 $15,000 of
      interest receivable through December 31, 2006. In addition, there are
      approximately $116,727 of non-interest bearing loans that were incurred after
      August 2006. These loans are considered as advances and are not interest bearing
      and due upon demand.




The
      Company had loans with various directors and companies that are related to
      those
      directors that were non-interest bearing. There was $77,499 outstanding as
      of
      December 31, 2006. These loans are short-term in nature.




The
      Company had $295,726 in short-term related party loans payable that accrue
      interest at rates ranging between 8% and 12% per annum. As of December 31,
      2006,
      $6,532 in interest expense is accrued and for the year ended December 31, 2006,
      the Company has expensed $25,332 in interest expense. There were no amounts
      outstanding at December 31, 2005.




The
      Company paid commissions to a director and a company with common ownership
      in
      the amount of $692,865 and $274,045 in the years ended December 31, 2006 and
      2005, respectively.





F-18
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**


**NOTE
              5-**
            **LOANS
                PAYABLE - NON-RELATED
                PARTIES**




The
      Company has $138,429 in loans payable with non-related parties that are due
      on
      demand, non-interest bearing and unsecured. Of this amount approximately
      $128,342 is being repaid monthly, based on 50% of the


profits
      generated on certain international routes to a private company that provided
      financing towards the development of those international routes.




**NOTE
              6-**
            ****CONVERTIBLE
                DEBENTURES****




On
      October 18, 2004, the Company entered into 12% Convertible Debentures (the
      “Debentures”) with Strathmere Associates International Limited 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 Associates International Limited
      agreed to extend the maturity date to October 31, 2007, 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, 2007 or converted
      at
      the holders’ option any time up to maturity at a conversion price equal of $0.07
      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 December 31, 2006 and 2005; no annual
      dividends, volatility of 125%, risk-free interest rate of 3.28%, and expected
      life of 1 year for 2006 and 2 years for 2005. For disclosure purposes as of
      December 31, 2006 and 2005 the derivative call option was approximately $0.0194
      per share. The (loss) on the derivative liability for the year ended December
      31, 2006 was ($18,649).




The
      embedded derivative did not qualify as a fair value or cash flow hedge under
      SFAS No. 133.




Interest
      expense for the years ended December 31, 2006 and 2005 was approximately
      $12,000, respectively. At December 31, 2006, there was no interest
      accrued.





F-19
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
              7-**
            ****COMMITMENTS****




**Agreements**




On
      October 12, 2004, the Company entered into a carrier agreement with XO
      Communications, Inc. This carrier agreement provides the Company with the
      ability to purchase telephone numbers in any of thirty-seven major metropolitan
      markets in the United States. As a result, services can be provided to consumers
      in any of these markets with each consumer being assigned a telephone number
      with a local area code. Prior to this agreement, we were only able to provide
      phone numbers with Canadian area codes. This contract was cancelled in July
      2006.




Additionally,
      the Company in 2004 and 2005 entered into various agreements with wireless
      Internet access providers, to provide VoIP services to the Company’s customers.
      On November 3, 2004, the Company also entered into a telecommunications
      agreement with Kore Wireless Canada, Inc., a supplier of global systems for
      mobile communications.




**Operating
      Lease**




The
      Company has entered into operating lease agreements which mature between
      November 11, 2008 and December 19, 2009. Minimum rentals for the next three
      years and in the aggregate are:





Year
                Ending
              December
                31,2007
            $
            32,2292008
            
            31,6552009
            
            23,229Total
            $
            87,113




F-20
 Table
          of Contents
 **UNITED
          AMERICAN CORPORATION**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006 AND 2005**
  **NOTE
                  8-**
                ****STOCKHOLDERS’
                    EQUITY
                    (DEFICIT)****
  **Common
          Stock**
  As
          of
          December 31, 2006, 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 December 31,
          2006.
  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.
  During
          the year ended December 31, 2005, the Company issued 1,400,000 for services
          at
          $.10 per share and 4,450,000 at $.075 per share for a value of
          $473,750.
  **Stock
          Options and Warrants**
  The
          Company has not issued any options or warrants.




**NOTE
              9-**
            ****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
      December 31, 2006, deferred tax assets consist of the following:


Net
                  operating losses
              $
              1,734,000Valuation
                  allowance
              
              (1,734,000)$
              -




At
      December 31, 2006, the Company had a net operating loss carryforwards of
      approximately $5,100,000, available to offset future taxable income through
      2026. 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.




F-21
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
              9-**
            ****PROVISION
                FOR INCOME TAXES
                (CONTINUED)****




A
      reconciliation of the Company’s effective tax rate as a percentage of income
      before taxes and federal statutory rate for the years ended December 31, 2006
      and 2005 is summarized as follows:




2006
            
            2005Federal
                statutory rate
            (34.0)%
            
            (34.0)%State
                income taxes, net of federal benefits
            0.0
            
            0.0Valuation
                allowance
            34.0
            
            34.00%
            
            0%





**NOTE
              10-**
            ****SPIN-OFF
                OF TELIPHONE CORP.********




On
      October 23, 2006, the Company’s shareholders voted in the majority to spin-off
      its entire holdings of 25,737,785 shares of the common stock of Teliphone Corp.
      with an effective date of October 30, 2006. In accordance with APB 29,
“Accounting for Nomonetary Transactions”, the Company distributed the capital
      stock they owned in Teliphone Corp. to their stockholders (a “spin-off”). As a
      result, the Company recognized the value of the assets and liabilities spun-out
      based on the respective recorded amounts after reduction for any impairment
      of
      value due to the fact that this was a nonreciprocal transfer to owners. As
      noted
      in the chart below, the net result was $580,955 recognized as contributed
      capital, an increase to the Company’s additional paid in capital at October 30,
      2006, due to the Company’s shareholders receipt of common shares of a Company
      that had net liabilities as of the date of spin-off. In addition, the Company’s
      minority interest of $232,659 were adjusted to earnings in the
      spin-off.




Balances
                  of Teliphone Corp. at October 30, 2006:Cash
              $
              (8,710)Accounts
                  receivable
              
              18,885Inventory
              
              12,512Other
                  assets
              
              142,007Fixed
                  assets
              
              97,484Loans
                  payable
              
              (363,415)Accounts
                  payable and accrued expenses
              
              (126,125)Current
                  notes payable - related
              
              (155,005)Deferred
                  revenue
              
              (10,720)Other
                  payables
              
              (187,868)$
              (580,955)


F-22
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**






**NOTE
              11-**
            ******SEGMENT
                INFORMATION**********




The
      Company’s reportable operating segments include wholesale VoIP services which is
      the physical buying of minutes (3894517 Canada Inc.) over brokered routes and
      direct routes. A brokered route is one where the Company purchases from a
      supplier who has direct termination capabilities with the local wireline and
      mobile operators in the country and re-sell the termination destination to
      the
      Company’s customers. A direct route is when the Company has the ability to
      directly terminate the traffic with the local wireline and mobile operators,
      such as the Company’s direct routes in Mali, Gabon and Cameroon, Africa., During
      2006, the Company also recorded retail interconnection services through its
      majority owned subsidiary Teliphone Corp (Formerly OSK Capital II Corp.). These
      revenues and expenses are listed below for the consolidation period from January
      1, 2006 to October 30, 2006 only, as the Company spun off its holdings of
      Teliphone Corp. to its shareholders on October 30, 2006. The Company also has
      corporate overhead expenses. The wholesale direct route services are essentially
      provided in Africa, and the wholesale brokered route services are supplied
      to
      customers in North America.. The segment data presented below details the
      allocation of cost of revenues and direct operating expenses to these segments.




Operating
      segment data for the year ended December 31, 2006 are as follows:





Corporate
            
            Wholesale
                  Services
                  Brokered
            
            Wholesale
                  Services
                  Direct
            
            Connection
                Services
            
            TotalSales
            $
            -
            
            $
            17,063,519
            
            $
            2,555,337
            
            $
            372,335
            
            $
            19,991,191Cost
                of sales
            
            -
            
            
            15,748,848
            
            
            2,299,181
            
            
            259,223
            
            
            18,307,252Gross
                profit
            
            -
            
            
            1,314,671
            
            
            256,156
            
            
            113,112
            
            
            1,683,939Operating
                expenses
            
            85,250
            
            
            1,291,064
            
            
            221,616
            
            
            439,818
            
            
            2,037,7483Depreciation,
                amortization and impairment
            
            184,800
            
            
            29,858
            
            
            -
            
            
            39,042
            
            
            253,700Other
                income (expense)
            
            (3,649)
            
            
            (54,776)
            
            
            (48,000)
            
            
            (21,729)
            
            
            (128,154)Net
                (loss)
            
            (273,699)
            
            
            (61,027)
            
            
            (13,460)
            
            
            (387,477)
            
            
            (735,663)Segment
                assets
            
            308,100
            
            
            2,014,521
            
            
            35,728
            
            
            -
            
            
            2,358,349Fixed
                Assets, net of depreciation
            
            293,100
            
            
            126,842
            
            
            -
            
            
            -
            
            
            419,942





Operating
      segment data for the year ended December 31, 2005 are as follows:





Corporate
            
            Wholesale
                  Services
                  Brokered
            
            Wholesale
                  Services
                  Direct
            
            Connection
                Services
            
            TotalSales
            $
            -
            
            
            
            
            $
            4,611,979
            
            $
            233,506
            
            $
            4,845,485Cost
                of sales
            
            -
            
            
            
            
            
            4,163,319
            
            
            477,390
            
            
            4,640,709Gross
                profit (loss)
            
            -
            
            
            
            
            
            448,660
            
            
            (243,884)
            
            
            204,776Operating
                expenses
            
            543,682
            
            
            
            
            
            658,359
            
            
            333,703
            
            
            1,535,744Depreciation,
                amortization and impairment
            
            148,700
            
            
            
            
            
            10,023
            
            
            31,829
            
            
            190,552Interest
                (net)
            
            (12,000)
            
            
            
            
            
            -
            
            
            -
            
            
            (12,000)Net
                income (loss)
            
            (704,382)
            
            
            
            
            
            (219,722)
            
            
            (609,416)
            
            
            (1,533,520)Segment
                assets
            
            446,100
            
            
            
            
            
            180,858
            
            
            301,681
            
            
            928,639Fixed
                Assets, net of depreciation
            
            446,100
            
            
            
            
            
            38,871
            
            
            155,130
            
            
            640,101




F-23
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**


**NOTE
              11-**
            ********SEGMENT
                INFORMATION**(CONTINUED)**********




In
      addition, the segment data broken out by geographical location for the year
      ended December 31, 2006 are as follows:





North,
                    Central
                  and
                    South
                  America
            
            Europe,
                    Middle
                  East
                    and
                  Africa
            
            Asia
            
            TotalSales
            $
            4,748,034
            
            $
            15,148,848
            
            $
            94,309
            
            $
            19,991,191Cost
                of sales
            
            4,348,088
            
            
            13,872,800
            
            
            86,365
            
            
            18,307,252Gross
                profit (loss)
            
            399,946
            
            
            1,276,049
            
            
            7,944
            
            
            1,683,939Operating
                expenses
            
            4,839,781
            
            
            15,441,571
            
            
            96,131
            
            
            2,037,7483Depreciation,
                amortization and impairment
            
            60,255
            
            
            192,248
            
            
            1,197
            
            
            253,700Interest
                (net)
            
            (30,437)
            
            
            (97,112)
            
            
            (605)
            
            
            (128,154)Net
                income (loss)
            
            (174,725)
            
            
            (557,468)
            
            
            (3,470)
            
            
            (735,663)Segment
                assets
            
            560,123
            
            
            1,787,101
            
            $
            11,126
            
            
            2,358,349Fixed
                Assets, net of depreciation
            
            99,739
            
            
            318,222
            
            
            1,981
            
            
            419,942





The
      geographical location segmentation information for the year ended December
      31,
      2005 is as follows:





North,
                    Central
                  and
                    South
                  America
            
            Europe,
                    Middle
                  East
                    and
                  Africa
            
            Asia
            
            TotalSales
            $
            4,845,485
            
            
            -
            
            
            -
            
            $
            4,845,485Cost
                of sales
            
            4,640,709
            
            
            
            
            
            -
            
            
            4,640,709Gross
                profit (loss)
            
            204,776
            
            
            -
            
            
            -
            
            
            204,776Operating
                expenses
            
            1,535,744
            
            
            -
            
            
            -
            
            
            1,535,744Depreciation,
                amortization and impairment
            
            190,552
            
            
            -
            
            
            -
            
            
            190,552Interest
                (net)
            
            (12,000)
            
            
            -
            
            
            -
            
            
            (12,000)Net
                income (loss)
            
            (1,533,520)
            
            
            -
            
            
            -
            
            
            (1,533,520)Segment
                assets
            
            928,639
            
            
            -
            
            
            -
            
            
            928,639Fixed
                Assets, net of depreciation
            
            640,101
            
            
            -
            
            
            -
            
            
            640,101




**NOTE
              12-**
            **********SUBSEQUENT
                EVENTS**********




On
      February 20, 2007, the Company temporarily ceased operations in its wholesale
      direct routes in Mali, Gabon and Cameroon Africa due to political changes in
      all
      of the countries.





F-24
 Table
          of Contents


**UNITED
      AMERICAN CORPORATION**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006 AND 2005**





**NOTE
              13-**
            **********RESTATEMENT
                OF CONSOLIDATED FINANCIAL
                STATEMENTS**********




The
      Company has restated its consolidated financial statements for the
      extinguishment of $625,964 of payables that the Company wrote off in the year
      ended December 31, 2003. The Company has received legal opinions that determine
      these liabilities to no longer be outstanding, however, is performing revised
      lien searches and performing further due diligence on the existence of these
      liabilities. Until the time that the Company receives further documented
      evidential matter that these liabilities are in fact no longer considered to
      be
      liabilities, the Company has re-instated these liabilities. The $625,964 is
      included in the consolidated balance sheet at December 31, 2006 as “Other
      payables”. The restatement has no impact on net income (loss) or earnings per
      share calculations, or changes in the Company’s cash flows for the years ended
      December 31, 2006 and 2005, respectively.




F-25
 Table
          of Contents
 **I** **tem8.
          Changes In and Disagreements with Accountants on Accounting
          and Financial** **Disclosure**
 
 No
          events
          occurred requiring disclosure under Item 304(b) of Regulation S-B.
 
 On
          August
          31, 2005, we dismissed Madsen & Associates, CPA’s Inc. (the "Madsen &
Associates") as our principal accountant. We engaged Schwartz Levitsky
          Feldman
          LLP ("Schwartz") as our principal accountants effective August 31, 2005.
          The decision to change accountants was approved by our board of directors. 
We did not consult with Schwartz on any matters prior to retaining such
          firm as
          our principal accountants.
 
 Madsen
          & Associates’ report dated April 27, 2005 on our balance sheet as of
          December 31, 2004, and the statement of operations, statement of changes
          in
          stockholders' equity, and statement of cash flows for the years ended December
          31, 2004 and 2003, and for the cumulative period from inception, July 17,
          1992,
          to December 31, 2004 did not contain an adverse opinion or disclaimer of
          opinion, nor was it qualified or modified as to uncertainty, audit scope,
          or
          accounting principles.
 
 In
          connection with the audited balance sheet as of December 31, 2004, and
          the
          statement of operations, statement of changes in stockholders' equity,
          and
          statement of cash flows for the years ended December 31, 2004 and 2003,
          and for
          the cumulative period from inception, July 17, 1992, to December 31, 2004,
          to
          December 31, 2003, there were no disagreements with Madsen & Associates on
          any matter of accounting principles or practices, financial statement
          disclosure, or auditing scope or procedures, which disagreements if not
          resolved
          to the satisfaction of Madsen & Associates would have caused them to make
          reference thereto in their report on the financial statements for such
          periods.
 
 In
          connection with the audited balance sheet as of December 31, 2004, and
          the
          statement of operations, statement of changes in stockholders' equity,
          and
          statement of cash flows for the years ended December 31, 2004 and 2003,
          and for
          the cumulative period from inception, July 17, 1992, to December 31, 2004,
          to
          December 31, 2003, and the subsequent reviews of interim periods
          through August 31, 2005, Madsen & Associates did not advise us with
          respect to any of the matters described in paragraphs (a)(1)(iv)(B) of
          Item 304
          of Regulation S-B.
 
 On
          February 6, 2006, Schwartz Levitsky Feldman LLP (the “Schwartz”) resigned as our
          principal accountant. We engaged Michael Pollack, CPA as our principal
          accountant effective February 7, 2006. The decision to change accountants
          was
          approved by our board of directors. We did not consult with Michael Pollack,
          CPA
          on any matters prior to retaining such firm as our principal
          accountants.
 
 Schwartz
          did not report on the financial statements for either of the past two years,
          but
          did review our financial statements included in our amended quarterly report
          for
          the period ended September 30, 2004 and the quarterly reports for the periods
          ended June 30, 2005 and September 30, 2005.
  23
 Table
              of Contents
  From
          the
          time that Schwartz was engaged on August 31, 2005 and through the interim
          period
          ended February 6, 2006, Schwartz did not advise us with respect to any
          of the
          matters described in paragraphs (a)(1)(iv)(B) of Item 304 of Regulation
          S-B.
 
 On
          February 6, 2006, Schwartz Levitsky Feldman LLP (the “Former Accountant”)
          resigned as the Company’s accountant. The Company has engaged Michael Pollack,
          CPA as its principal accountants effective February 7, 2006. The decision
          to
          change accountants was approved by the Company’s board of directors. The Company
          did not consult with Michael Pollack, CPA on any matters prior to retaining
          such
          firm as its principal accountants.
 
 The
          Former Accountant did not report on the financial statements for either
          of the
          past two years, but did review the Company’s financial statements included in
          the Company’s amended quarterly report for the period ended September 30, 2004
          and the quarterly reports for the periods ended June 30, 2005 and September
          30,
          2005.
 
 From
          the
          time that the Former Accountant was engaged on August 31, 2005 and through
          the
          interim period ended February 6, 2006, the Former Accountant did not advise
          the
          Company with respect
          to any of the matters described in paragraphs (a)(1)(iv)(A) or (B) of Item
          304
          of Regulation S-B.
 
 **Item8A.
          Controls and Procedures**
 
 Disclosure
          controls and procedures are controls and other procedures that are designed
          to
          ensure that information required to be disclosed in our reports filed or
          submitted under the Exchange Act are recorded, processed, summarized and
          reported, within the time periods specified in the SEC's rules and forms.
          Disclosure controls and procedures include, without limitation, controls
          and
          procedures designed to ensure that information required to be disclosed
          in our
          reports filed under the Exchange Act is accumulated and communicated to
          management, including our Chief Executive Officer and Chief Financial Officer,
          to allow timely decisions regarding required disclosure.
 
 We
          carried out an evaluation of the effectiveness of the design and operation
          of
          our disclosure controls and procedures (as defined in Exchange Act Rules
          13a-15(e) and 15d-15(e)) as of December 31, 2006. This evaluation was carried
          out under the supervision and with the participation of our Chief Executive
          Officer and Chief Financial Officer, Mr. Simon Lamarche. Based upon that
          evaluation, our Chief Executive Officer and Chief Financial Officer concluded
          that, as of December 31, 2006, our disclosure controls and procedures are
          not
          effective. There have been no significant changes in our internal controls
          over
          financial reporting during the quarter ended December 31, 2006 that have
          materially affected or are reasonably likely to materially affect such
          controls.
 
 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.
  24
 Table
              of Contents
  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 our 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.
 
 **Item8B.
          Other information**
 
 None.
  25
 Table
              of Contents
  **PART
          III**
 
 **Item9.
          Directors, Executive Officers, Promoters and Control Persons;
          Compliance with** **Section
          16(a) of the Exchange Act**
 
 The
          following information sets forth the names of our current directors and
          executive officers, their ages and their present positions.
 
 Name
                Age
                Position(s)
                    and Office(s) HeldSimon
                    Lamarche
                52
                Chief
                    Executive Officer, Chief Financial Officer, and
                    DirectorGeorge
                    Metrakos
                35
                Director
 
 Set
          forth
          below is a brief description of the background and business experience
          of each
          of our current executive officers and directors.
 
 **Simon
          Lamarche.** On
          November 8, 2005, Mr. Larmache was appointed as our Chief Executive Officer,
          Chief Financial Officer and as a member of our board of directors. Since
          June
          2004, Mr. Lamarche has acted as an independent consultant with our subsidiary,
          Teliphone, Inc.  From January 2004 to June of 2004, Mr. Lamarche was
          Director of Sales of MicroQuest, a company specializing in retail and business
          sales and integration of computers and networking equipment.  From January
          2002 to the end of 2003, Mr. Lamarche was President of Vectoria Informatiques
          Telecommunications Inc., a company specializing in advanced, internet-based
          telecommunications and specialized computer networking within business
          and
          residential applications.  Prior to 2002, Mr. Lamarche was Director of
          Sales at Jitec Corporation, a company specializing in software development,
          computer networking and retail sales.
 
 **George
          Metrakos.** Mr.
          Metrakos was appointed to our board of directors on September 6, 2005.
          Mr.
          Metrakos holds a Bachelor’s of Engineering from Concordia University located in
          Montreal, Canada and a Master’s of Business Administration from The John Molson
          School of Business at Concordia University. Mr. Metrakos has worked with
          such
          organizations as Philips B.V. located in the Netherlands, The Dow Chemical
          Company, and Hydro Quebec. Mr. Metrakos was appointed as President and
          Chief
          Executive Officer of Teliphone, Inc. in September 2004. Teliphone, Inc.
          was
          formed as a subsidiary of the Company in September 2004. Mr. Metrakos was
          appointed as President, Chief Executive Officer and a member of the board
          of
          directors of Teliphone Corp., formerly known as OSK Capital II Corp., in
          June
          2005. Teliphone Corp. was a subsidiary of the Company until spun-off on
          October
          30, 2006.
 
 **Term
          of Office**
 
 Our
          directors are appointed for a one-year term to hold office until the next
          annual
          meeting of our shareholders or until removed from office in accordance
          with our
          bylaws.
 
 Our
          executive officers are appointed by our board of directors and hold office
          until
          removed by the board.
  26
 Table
              of Contents
  **Significant
          Employees**
 
 We
          have
          no significant employees other than our officers and directors.
 
 **Family
          Relationships**
 
 There
          are
          no family relationships between or among the directors, executive officers
          or
          persons nominated or chosen by us to become directors or executive
          officers.
 
 **Involvement
          in Certain Legal Proceedings**
 
 Other
          than as disclosed below, during the past five years, none of the following
          occurred with respect to a present director, person nominated to become
          director, executive officer, or control person: (1) any bankruptcy petition
          filed by or against any business of which such person was a general partner
          or
          executive officer either at the time of the bankruptcy or within two years
          prior
          to that time; (2) any conviction in a criminal proceeding or being subject
          to a
          pending criminal proceeding (excluding traffic violations and other minor
          offenses); (3) being subject to any order, judgment or decree, not subsequently
          reversed, suspended or vacated, of any court of competent jurisdiction,
          permanently or temporarily enjoining, barring, suspending or otherwise
          limiting
          his or her involvement in any type of business, securities or banking
          activities; and (4) being found by a court of competent jurisdiction (in
          a civil
          action), the SEC or the Commodities Futures Trading Commission to have
          violated
          a federal or state securities or commodities law, and the judgment has
          not been
          reversed, suspended or vacated.
 
 On
          October 8, 2004 the Autorité des marchés financiers (the “AMF”) launched penal
          proceedings before the Court of Québec (Criminal and Penal Division) against,
          our former CEO and CFO, Benoit Laliberté, in the matter of Jitec Inc. Benoit
          Laliberté faces 48 counts and is liable to fines totaling $1,760,180. He is
          accused of insider trading in the securities of Jitec Inc., while having
          privileged information about the company, thereby violating section 187
          of the
          Securities Act (the “Act”), assisting Jitec Inc. in making a misrepresentation
          in press releases in violation of section 196 of the Act, and failing to
          file a
          report disclosing a change in his control over the securities of Jitec
          Inc.,
          which is a reporting issuer, in violation of section 97 of the Act. A trial
          date
          for this matter has not been set. There are several preliminary defense
          Motions
          which are now pending and after these Defense Motions have been dealt with,
          if
          necessary, the Court will then set a Trial date.
 
 On
          May
          23, 2003, Vectoria Information Technology and Telecommunications Inc. filed
          a
          bankruptcy petition with the Canadian Federal Bankruptcy Court and was
          declared
          bankrupt and liquidated on May 7, 2004. Mr. Simon Lamarche, our sole executive
          officer, acted as President to Vectoria Information Technology and
          Telecommunications Inc. from January 2002 to the end of
          2003.
  27
 Table
              of Contents
  **Audit
          Committee**
 
 We
          do not
          have a separately-designated standing audit committee. The entire board
          of
          directors performs the functions of an audit committee, but no written
          charter
          governs the actions of the board of directors when performing the functions
          of
          that would generally be performed by an audit committee. The board of directors
          approves the selection of our independent accountants and meets and interacts
          with the independent accountants to discuss issues related to financial
          reporting. In addition, the board of directors reviews the scope and results
          of
          the audit with the independent accountants, reviews with management and
          the
          independent accountants our annual operating results, considers the adequacy
          of
          our internal accounting procedures and considers other auditing and accounting
          matters including fees to be paid to the independent auditor and the performance
          of the independent auditor.
 
 We
          do not
          have an audit committee financial expert because of the
          size
          of our company and our board of directors at this time. We believe that
          we do
          not require an audit committee financial expert at this time because we
          retain
          outside consultants who possess these attributes as needed.
 
 For
          the
          fiscal year ending December 31, 2006, the board of directors:
 
 1.
              Reviewed
                  and discussed the audited financial statements with management,
                  and 
 2.
              Reviewed
                  and discussed the written disclosures and the letter from our independent
                  auditors on the matters relating to the auditor's
                  independence. 
 Based
          upon the board of directors’ review and discussion of the matters above, the
          board of directors authorized inclusion of the audited financial statements
          for
          the year ended December 31, 2006 to be included in this Annual Report on
          Form
          10-KSB and filed with the Securities and Exchange Commission.
 
 **Section
          16(a) Beneficial Ownership Reporting Compliance**
 
 Section
          16(a) of the Exchange Act requires our
          directors and executive officers and persons who beneficially own more
          than ten
          percent of a registered class of the Company’s equity securities to file with
          the SEC initial reports of ownership and reports of changes in ownership
          of
          common stock and other equity securities of the Company. Officers, directors
          and
          greater than ten percent beneficial shareholders are required by SEC regulations
          to furnish us with copies of all Section 16(a) forms they file. To the
          best of
          our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments
          thereof) received by us during or with respect to the year ended December
          31,
          2006, the following
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  persons
          have failed to file, on a timely basis, the identified reports required
          by
          Section 16(a) of the Exchange Act during fiscal year ended December 31,
          2006:
 
 Name
                    and principal position
                Number
                    of
                  late
                    reports
                Transactions
                    not
                  timely
                    reported
                Known
                    failures to
                  file
                    a required formSimon
                    Lamarche
                  CEO,
                    CFO, & Director
                0
                0
                0George
                    Metrakos
                  Director
                1
                1
                0
 
 **Code
          of Ethics Disclosure**
 
 We
          adopted a Code of Ethics for Financial Executives, which include our principal
          executive officer, principal financial officer, principal accounting officer
          or
          controller, or persons performing similar functions. The code of ethics
          was
          filed as an exhibit to the annual report on Form 10-KSB for the fiscal
          year
          ended December 31, 2005 and filed with the SEC on April 17, 2006.
  29
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  **Item10.
          Executive Compensation**
 
 **Summary
          Compensation Table**
  The
          table
          below summarizes all compensation awarded to, earned by, or paid to our
          former
          or current executive officers for the fiscal years ended 2006 and
          2005.
 
 SUMMARY
                    COMPENSATION TABLEName
                  and
                  principal
                  position
                Year
                Salary($)
                Bonus
                  ($)
                Stock
                  Awards
                  ($)
                Option
                  Awards
                  ($)
                Non-Equity
                  Incentive
                    Plan
                  Compensation
                  ($)
                Nonqualified
                  Deferred
                  Compensation
                  Earnings
                    ($)
                All
                    Other
                  Compensation
                  ($)
                Total
                  ($)Simon
                    Lamarche(1)
                  CEO
                    & CFO
                2006
                  2005
                34,660
                  42,000
                -
                  -
                -
                  -
                -
                  -
                -
                  -
                -
                  -
                -
                  -
                34,660
                  42,000
 
 (1)
              Mr.
                  Lamarche was appointed to serve as our Chief Executive Officer
                  and Chief
                  Financial Officer on November 8, 2005. The information provided
                  in the
                  summary compensation table includes all compensation paid to Mr.
                  Lamarche
                  for the full fiscal years ended December 31, 2006 and 2005.  **Narrative
          Disclosure to the Summary Compensation Table**
  We
          have
          not entered into an employment agreement with Mr. Lamarche. Salary paid
          is
          recorded in the summary compensation table above in the column titled “Salary.”
Of the total salary reported for the fiscal year ended December 31, 2006,
          $6,180
          was paid in connection with services rendered to us, and $28,480 was paid
          in
          connection with services to our subsidiary entities. Mr. Lamarche was not
          granted any stock option or stock awards during the fiscal year ended December
          31, 2006 or 2005.
 
 At
          no
          time during the last fiscal year was any outstanding option repriced or
          otherwise modified. There was no tandem feature, reload feature, or
          tax-reimbursement feature associated with any of the stock options we granted
          to
          our executive officers or otherwise.
 
 **Outstanding
          Equity Awards at Fiscal Year-End**
 
 The
          table
          below summarizes all unexercised options, stock that has not vested, and
          equity
          incentive plan awards for each named executive officer as of December 31,
          2006.
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 **OUTSTANDING
                    EQUITY AWARDS AT FISCAL YEAR-END**OPTION
                    AWARDS
                STOCK
                    AWARDSName
                Number
                    of
                  Securities
                  Underlying
                  Unexercised
                  Options
                  (#)
                  Exercisable
                Number
                    of
                  Securities
                  Underlying
                  Unexercised
                  Options
                  (#)
                  Unexercisable
                Equity
                  Incentive
                  Plan
                  Awards:
                  Number
                    of
                  Securities
                  Underlying
                  Unexercised
                  Unearned
                  Options
                  (#)
                Option
                  Exercise
                  Price
                  ($)
                Option
                  Expiration
                  Date
                Number
                  of
                  Shares
                  or
                    Units
                  of
                  Stock
                    That
                  Have
                  Not
                  Vested
                  (#)
                Market
                  Value
                  of
                  Shares
                  or
                  Units
                  of
                  Stock
                  That
                  Have
                  Not
                  Vested
                  ($)
                Equity
                  Incentive
                  Plan
                  Awards:
                  Number
                  of
                  Unearned
                  Shares,
                  Units
                    or
                  Other
                  Rights
                  That
                    Have
                  Not
                  Vested
                  (#)
                Equity
                  Incentive
                  Plan
                  Awards:
                  Market
                    or
                  Payout
                  Value
                    of
                  Unearned
                  Shares,
                  Units
                    or
                  Other
                  Rights
                  That
                  Have
                    Not
                  Vested
                  (#)Simon
                    Lamarche
                -
                -
                -
                -
                -
                -
                -
                -
                -
 
 **Compensation
          of Directors**
 
 The
          table
          below summarizes all compensation of our directors as of December 31,
          2006.
 
 **DIRECTOR
                    COMPENSATION**Name
                Fees
                    Earned or
                  Paid
                    in
                  Cash
                  ($)
                Stock
                    Awards
                  ($)
                Option
                    Awards
                  ($)
                Non-Equity
                  Incentive
                  Plan
                  Compensation
                  ($)
                Non-Qualified
                  Deferred
                  Compensation
                  Earnings
                  ($)
                All
                  Other
                  Compensation
                  ($)
                Total
                  ($)Simon
                    Lamarche
                -
                -
                -
                -
                -
                -
                -George
                    Metrakos
                -
                30,000
                -
                -
                -
                132,905
                162,905
 
 **Narrative
          Disclosure to the Director Compensation Table**
 
 The
          all
          fees earned or paid in cash to Simon Lamarche as were earned in connection
          with
          his employment agreement as an executive officer. Mr. Lamarche received
          no
          compensation for his service as a member of our board of directors. We
          only
          compensate outside directors for the service as members of our board of
          directors.
  During
          the year ended December 31, 2006, we issued 500,000 shares of our common
          stock
          to Metratech Business Solutions, a private company controlled by Mr. George
          Metrakos, as compensation for services rendered. The aggregate value of
          these
          shares was computed in accordance with FAS 123R and is reported in the
          summary
          compensation table above in the column titled “Stock Awards.” During the fiscal
          year ended December 31, 2006, Mr. Metrakos was paid cash compensation of
          $132,905 in consideration for consulting services rendered to us and our
          subsidiary entities. The fees are disclosed in the director compensation
          table
          above as “All Other Compensation.”
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  **Item11.
          Security Ownership of Certain Beneficial Owners and
          Management and Related** **Stockholder
          Matters**
 
 The
          following table sets forth, as of April 15, 2007, the beneficial ownership
          of
          our common stock by each executive officer and director, by each person
          known by
          us to beneficially own more than 5% of the our common stock and by the
          executive
          officers and directors as a group. Except as otherwise indicated, all shares
          are
          owned directly and the percentage shown is based on 51,079,985 shares of
          common
          stock issued and outstanding on April 15, 2007.  Except
          as
          otherwise indicated, the address of each person named in this table is
          c/o
          United American Corporation, 4150 Ste-Catherine Street West, Suite 200,
          Montreal, Quebec, Canada H3Z 0A1.
 
 **Title
                    of class**
                **Name
                    and address**
                  **of
                    beneficial owner****(1)**
                **Amount
                    of**
                  **beneficial
                    ownership**
                **Percent**
                  **of
                    class*****Executive
                    Officers & Directors:**Common
                Simon
                    Lamarche
                0
                    shares
                0
                    %Common
                George
                    Metrakos
                650,000
                    shares(2)
                1.3%**Total
                    of All Directors and Executive Officers:**
                650,000
                    shares
                1.3%**More
                    Than 5% Beneficial Owners:**Common
                Benoit
                    Laliberté
                  220
                    de la Coulee
                  Mont-Saint-Hilaire,
                    Quebec, Canada J3H 5Z6
                26,250,000
                    shares(3)
                52.0%
 
 (1)
              As
                  used in this table, "beneficial ownership" means the sole or shared
                  power
                  to vote, or to direct the voting of, a security, or the sole or
                  shared
                  investment power with respect to a security (i.e., the power to
                  dispose
                  of, or to direct the disposition of, a security). In addition,
                  for
                  purposes of this table, a person is deemed, as of any date, to
                  have
                  "beneficial ownership" of any security that such person has the
                  right to
                  acquire within 60 days after such date. (2)
              Mr.
                  Metrakos is the indirect beneficial owner of 650,000 shares of
                  common
                  stock held by Metratech Business Solutions
                  Inc. (3)
              Mr.
                  Laliberté is the indirect beneficial owner of 26,250,000 shares on common
                  stock held by 3874958 Canada Inc.  32
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  **Item12.
          Certain Relationships and Related
          Transactions**
 
 Except
          as
          disclosed below, none of our directors or executive officers, nor any proposed
          nominee for election as a director, nor any person who beneficially owns,
          directly or indirectly, shares carrying more than 5% of the voting rights
          attached to all of our outstanding shares, nor any members of the immediate
          family (including spouse, parents, children, siblings, and in-laws) of
          any of
          the foregoing persons has any material interest, direct or indirect, in
          any
          transaction since
          the
          beginning of our last fiscal year on January 1, 2006 or in
          any
          presently proposed transaction which, in either case, has or will materially
          affect us.
 
 Mr.
          Benoit Laliberté, our majority shareholder, provides consulting services to us.
          We retain Mr. Laliberté to primarily assist us in establishing networks and to
          negotiate sales agreements. We have no written agreement with Mr. Laliberté.
          During the fiscal year ended December 31, 2006, we paid Mr. Laliberté $460,630
          in consulting fees for services rendered.
 
 **Item13.
          Exhibits**
 
 Exhibit
                    Number
                Description14.1
                Code
                    of Ethics(1)31.1
                Certification
                    of Chief Executive Officer pursuant to
                    Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted
                    pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 200231.2
                Certification
                    of Chief Financial Officer pursuant to
                    Securities Exchange Act Rule 13a-14(a)/15d-14(a), 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 200299.1
                Agreement
                    with Gabon
                    Telecom
 
 (1)
              Incorporated
                  by reference to Annual report on Form 10-KSB for the year ended
                  December
                  31, 2005 filed with the SEC on April 17,
                  2007 
 **Item14.
          Principal Accountant Fees and Services**
 
 **Audit
          Fees**
 
 The
          aggregate fees billed by our auditors for professional services rendered
          in
          connection with a review of the financial statements included in our quarterly
          reports on Form 10-QSB and the audit of our annual consolidated financial
          statements for the fiscal years ended December 31, 2006 and December 31,
          2005
          were approximately $108,507 and $28,000 respectively.
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  **Audit-Related
          Fees**
 
 Our
          auditors did not bill any additional fees for assurance and related services
          that are reasonably related to the performance of the audit or review of
          our
          financial statements.
 
 **Tax
          Fees**
 
 The
          aggregate fees billed by our auditors for professional services for tax
          compliance, tax advice, and tax planning were $0 and $0 for the fiscal
          years
          ended December 31, 2006 and 2005.
 
 **All
          Other Fees**
 
 The
          aggregate fees billed by our auditors for all other non-audit services,
          such as
          attending meetings and other miscellaneous financial consulting, for the
          fiscal
          years ended December 31, 2006 and 2005 were $0 and $0
          respectively.
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  **SIGNATURES**
 
 In
          accordance with Section 13 or 15(d) of the Exchange Act, the registrant
          caused
          this report to be signed on its behalf by the undersigned, thereunto duly
          authorized.
  **United American
                    Corporation**By:
                  /s/ Simon LamarcheSimon
                      Lamarche
                    Chief
                      Executive Officer,
                    Chief
                      Financial Officer and Director
                    April
                      16, 2007
  In
            accordance with the Exchange Act, this report has been signed below by
            the
            following persons on behalf of the registrant and in the capacities and
            on the
            dates indicated:
  By:
                /s/ Simon Lamarche
                By:
                /s/ George MetrakosSimon
                    Lamarche
                  Director
                  April
                    16, 2007
                
                George Metrakos
                  Director
                  April 16,
                    2007