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
  1934
 For the
fiscal year ended December 31,
2007
 o
              TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT
  For the
transition period from _________ to ________
  Commission
file number 000-27621
 
 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.)218
      de la Coulee, Mount St-Hilaire Quebec, Canada
              J3H
      5Z6(Address
      of principal executive offices)
              (Zip
      Code)Issuer’s
      telephone number: 514-313-3424
  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: $30,321,299
 
 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. $638,500
as of May 15, 2008
 
 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 May 15,
2008
 
 Transitional
Small Business Disclosure Format (Check One): Yes [   ] No
[X]
  
  TABLE OF
CONTENTS
 
 PagePART
      IItem 1.
              Description of
      Business
              1Item
      2.
              Description
      of Property
              6Item
      3.
              Legal
      Proceedings
              6Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              6PART
      IIItem
      5.
              Market
      for Common Equity and Related Stockholder Matters
              6Item
      6.
              Management’s
      Discussion and Analysis
              8Item
      7.
              Financial
      Statements
              14Item
      8.
              Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
              15Item
      8A.
              Controls
      and Procedures
              15Item
      8B.
              Other
      Information
              16PART
      IIIItem
      9.
              Directors,
      Executive Officers, Promoters and Control Persons; Compliance With Section
      16(a) of the Exchange Act
              16Item
      10.
              Executive
      Compensation
              18Item
      11.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              20Item
      12.
              Certain
      Relationships and Related Transactions
              20Item
      13.
              Exhibits
              21Item
      14.
              Principal
      Accountant Fees and Services
              21
 
 
 
  PART I
 Item 1. 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.
 
 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.
  1
 
 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.
 
 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.
  2
 
 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 2007 we were
forced to suspend our direct African route operations in Mali, Gabon and
Cameroon. As of April 2008 we have been unsuccessful in reestablishing these
operations and are currently awaiting the outcome of negotations between various
mediating parties in their respective countries to determine whether these
routes will reopen in the future.
 
 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.
 
 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).
  3
 
 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.
 
 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.
  4
 
 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
not incur research and development expenditures for the fiscal year ended
December 31, 2007, however incurred $124,232 of research and development
expenditures in the fiscal year ended December 31, 2006.
 
 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.
 
 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.
 
 5
  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.
 
 Item
2. Description of Property
 
 We
currently lease our executive offices located at 218 de la Coulee, Mount
St-Hilaire, Quebec, Canada, J3H 5Z6. We do not pay monthly rent as this is
within the offices of the company’s founder.
 
 Item 3. Legal Proceedings
 
 We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
 
 Item 4. Submission of Matters to a Vote of Security
Holders
 
 None.
 
 PART II
 
 Item 5. Market for Common Equity and Related Stockholder
Matters
 
 Market
Information
  6
 
 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, 2007Quarter
      Ended
              
              High
      $
              
              
              Low
      $March
      31, 2007
              
              
              0.07
              
              
              
              0.045June
      30, 2007
              
              
              0.055
              
              
              
              0.028September
      30, 2007
              
              
              0.055
              
              
              
              0.025December
      31, 2007
              
              
              0.04
              
              
              
              0.025
 
 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
              
              
              
              0.04
 
 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;
 
 (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.
  7
 
 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, 2007, 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.
 
 Recent
Sales of Unregistered Securities
 
 None
 
 Securities
Authorized for Issuance Under Equity Compensation Plans
 
 As of
December 31, 2007, 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.
 
 Item 6. 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.
  8
 
 Overview
 
 We were
incorporated under the laws of the State of Florida on July 17, 1992 under the
name American Financial Seminars, Inc. On February 5, 2004, our name was changed
to United American Corporation. On July 18, 2003, we entered into a share
exchange agreement with 3874958 Canada Inc. (a Canadian corporation and an
affiliate of the Company by common officers) to transfer 26,250,000 shares of
its common stock for 100 shares of American United Corporation (a Delaware
corporation and wholly owned subsidiary of 3874958 Canada Inc.) which
represented 100% of the outstanding shares of American United Corporation. In
this transaction we acquired internet telecommunications equipment valued at
$874,125 which we utilizes to provide VoIP (Voice-over-Internet-Protocol)
telecommunications services to wholesale providers worldwide.
 
 Our
revenues are derived primarily from the sale of international call termination
services to wholesale customers and through the use of our switching facilities
by third parties. We also sold call local call termination services to retail
customers in the domestic North American market, but have since ceased this area
of our business since we completed the spin-off of our majority-owned
subsidiary, Teliphone Corp., on October 30, 2006.
 
 Our
management believes that we can successfully operate within the Wholesale
Telecommunications Market as a result of the following:
 
 There
      is a natural migration in the wholesale telecommunications marketplace to
      utilize the internet as the main network between telecommunications
      carriers due to its lower cost of operation than traditional networks. We
      specialize in the deployment of internet-based
    technologies.
 
 Developing
      nations, primarily in Africa, Latin and South America, are confronted with
      the need to upgrade their telecommunications technologies resulting in a
      need for support in this venture over the next 3-5 years, producing solid
      opportunities for us to leverage our knowledge in order to solidify long
      term consulting mandates and direct route termination capabilities with
      these countries. Foreign investment risk can be mitigated through the use
      of international development insurance programs such as MIGA
      (Multinational Investment Guarantee Agency) run through the World
      Bank.
                
                Opportunities
      also exist in developed countries, particularly in Europe, to have third
      party telecommunications carriers utilize our switching capability on a
      fee for service basis thereby providing revenues without the inherent risk
      of brokered routes.
                
                We
      can leverage our experience into developing markets such Internet
      Television.
 
 Since we
first launched our direct wholesale termination services with our CarribeanONE
network in 2003, we added additional networks in the countries of Mali, Gabon
and Cameroon, Africa, as direct route destinations. We had also grown in our
other business segment, which is brokered routes. Brokered routes refer to the
re-sale of other companies’ direct routes to our customers. Brokered routes are
highly risky as they represent high volume/low margin sales to the
company.  Therefore timely payments from the company’s customers is
critical and late or non-paynment can and has resulted in cash flow problems for
the company.
 
 The
CarribeanONE route terminated operation in February of 2006. The Mali, Gabon and
Cameroon, Africa networks all commenced service during the year ended December
31, 2006. Due to frequently changing political conditions within each of these
African nations, we are experiencing difficulty enforcing the terms of our prior
negotiated agreements. The current governments in these countries are not
honoring existing agreements in which we acquired termination routes within the
country. For this reason, in February 2007 we were forced to suspend our direct
African route operations in Mali, Gabon and Cameroon. We were working throughout
2007 to restore these networks to be operational ,  but to date have
not been successful The failure to provide termination services in Mali, Gabon
and Cameroon through our VoIP networks have significantly harmed our business
and results of operations in 2007.
  During
2008, we our focusing our efforts on the development and implementation of an
ITV/IPTV platform which will allow us to target home and commercial subscribers
with focused content. We will also expand use of our telecommunications switches
on a country by country basis for use by third parties. By providing access to
our switches rather than brokering the routes directly, we will significantly
reduce the financial risk to the company as the company will not assume any
liability to long distance suppliers.
  We will
also focus on establishing gateways in countries that do not present that same
political risks and instability associated with our operations in Mali, Gabon
and Cameroon, Africa and where we can insure political risks through insurance
programs such as the Multilateral Investment Guarantee Agency.
  9
 
 An
Overview of Internet Television
 
 One of
the outgrowths from the rapid deployment of broadband connectivity in the United
States and abroad has been the accelerated adoption of several related services
such as VoIP (Voice over Internet Protocol), IPTV (Internet Protocol Television)
and Internet Television (ITV). All three technologies transmit sound, voice and
or video over the Internet through the conversion of respective signals into
data packets. VoIP technology is used primarily for 2 way voice conversations
(e.g. traditional telephone) while IPTV and ITV is used for both interactive and
streaming television.  The primary difference between IPTV and ITV is
how one watches the content with IPTV being watched via personal computer and
ITV via traditional television. In the industry this is commonly known as “lean
forward” and “lean back” technology respectively. The data packets are
transmitted over the Internet and converted back into voice, sound and/or video
signals before reaching their recipient. The Internet has always used
packet-switched technology to transmit information between two communicating
terminals. For example, packet switching allows a personal computer to download
a page from a web server or to send an e-mail message to another computer. VoIP,
IPTV and ITV allow for the transmission of voice signals over these same packet
switched networks and, in doing so, provide an alternative to traditional
telephone and cable networks as well as the airwaves.
 
 Internet
television technologies present several advantages over the technology used in
traditional cable, satellite and airwave networks that enable IPTV/ITV providers
to operate with lower capital expenditures and operating costs while offering
both traditional and innovative service features. Cable subscribers must be
connected to a specific company based on the subscriber’s location. Satellite
subscribers on the other hand, while not restricted to a specific company by
their location, are required to install a receiving dish at their location which
cannot be moved and is subject to meteorological disturbances. Both cable and
satellite providers require significant capital expenditures and ongoing
maintenance. In contrast, IPTV/ITV services are provided over the Internet with
programming being received by the subscriber’s PC or on a television set using a
set top box. Like VoIP, IPTV/ITV quality and service is dependent on the quality
and reliability of the Internet connection. IPTV/ITV technology also presents
the opportunity to offer customers attractive features that traditional
cable/satellite companies cannot easily support such as full mobility (the set
top box will operate anywhere in the world there is a high speed Internet
connection), video conferencing as well as all most of the regular
cable/satellite features including telephone.
  Broad
range of IPTV services include:
  •
              Interactive
      information
 •
              Content
      portability
 •
              Video
      clips on-demand
 •
              Video
      calling/conferencing
 •
              Video
      messaging
 •
              Network-based
      time & place shifting
 •
              Peer-to-Peer
      Video
 •
              Home
      automation
 •
              On-line
      dating
 •
              Personalized
      advertising
 •
              Wireless/Wireline
      Integration
 •
              Standard
      Def. Television (SDTV)
  10
  •
              High
      Def. Television (HDTV)
 •
              Video-on-Demand
      (VOD)
 •
              Interactive
      program guide
 •
              Web
      browsing on TV
 •
              Music
      channels
 •
              Local
      programming
 •
              Voice
      services
 •
              Emergency
      services
 •
              Information
      services
 •
              Personal
      Video Recorder (PVR)
  While
traditional cable companies have been very effective at increasing subscriber
choice for both programmed and on demand content, they have been slow to offer
specialized content (e.g. foreign networks) and when available are expensive,
typically costing $15-25 per channel per month. We believe that that this
focused specialty market is underserved and provides an opportunity to the
company. The company will also look at the feasibility of bundling Internet
Television  along with voice services (in partnership with Teliphone
Inc.), Internet access and other features as noted above.
 
 Voice
over Internet Protocol or VoIP has become widely accepted at a supplement or
substitution for traditional telephone service. Most cable companies and second
tier telephone companies now offer VoIP home service in direct competition to
traditional telephone service.  IPTV and ITV are widely viewed to
develop in the same way.
  Results
of Operations for the Years Ended December 31, 2007 and 2006
 
 For the
year ended December 31, 2007, we generated total revenue of $30,321,299,
compared to revenue of $19,991,191 for the year ended December 31, 2006. Our
revenue was generated by sales of wholesale international voice and data
products and services using VoIP.  Our increase in revenue for the year
ended December 31, 2007 when compared to the same reporting period in the prior
year is primarily attributable to increases in sales of VoIP termination
services in our brokered international telecom routes. A brokered route is one
where we purchase from a supplier who has direct termination capabilities with
the local wireline and mobile operators in the country and re-sell the
termination destination to our customers. A direct route is when we have the
ability to directly terminate the traffic with the local wireline and mobile
operators, such as our direct routes in Mali, Gabon and Cameroon, Africa. During
the year ending December 31, 2007, All of revenues were attributed to our
brokered routes, compared to the previous year where the revenues of $17,146,798
were attributed to our brokered routes and $2,555,337 of revenues were
attributed to direct routes
 
 Our total
cost of sales for the year ended December 31, 2007 was $27,307,863 compared to
$18,307,252 for the year ended December 31, 2006. This resulted in a gross
profit of $3,013,436 and $1,683,939 for the years ended December 31, 2007 and
2006 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 $1,873,131 for the year ended
December 31, 2006, compared to $2,291,498 for the year ended December 31, 2006.
The decrease in our operating expenses is primarily attributable to a reduction
of research and development expenses as well as decreases in general and
administrative expenses. We paid $1,089,584in commissions and wages and
management fees for the year ended December 31, 2007, compared to $1,177,397 for
the year ended December 31, 2006.  We paid commissions and management fees
based upon sales of VoIP termination services.
  Our net
income (loss) for the year ended December 31, 2007 was $1,061,945, compared to a
net loss of $614,269in the prior year.
  11
  Liquidity
and Capital Resources
 
 As of
December 31, 2007, we had current assets of $3,776,182. Our current assets
consisted of accounts receivable in the amount of $2,094,198 and prepaid
expenses and other current assets of $1,370,927.  The majority of
these other current assets include amounts that represent cash advances to our
former subsidiaries, $856,220 to 3894517 Canada Inc. (ceased operations on June
30, 2007) and $503,220 from Teliphone Corp, spun off in October 30, 2006. Our
total current liabilities as of December 31, 2007 were $3,383,930. As a result,
on December 31, 2007 we had working capital surplus of $392,252.
 
 Operating
activities provided $1,687,631 in cash for the year ended December 31, 2007. Our
net comprehensive income of $1,001,051 for the year ended December 31, 2007 was
the primary component of our positive operating cash flow. Investing activities
during the year ended December 31, 2007 used $1,032,178 due primarily from the
increase in loan receivable from our former subsidiary 3894517 Canada Inc. that
was formerly booked as inter-company and hence would negate itself in the
consolidation.  Cash flows used infinancing activities during the year
ended December 31, 2007 consisted of $413,949 for proceeds from loans
payable-related parties. We primarily relied on revenues to fund our operations
during the year ended December 31, 2007.
  The
underlying drivers that resulted in material changes and the specific inflows
and outflows of cash in the year ended December 31, 2007 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,
2008. There can be no assurance that any additional financing will be available
to us on acceptable terms, or at all. We do not have any formal commitments or
arrangements for the sales of stock or the advancement or loan of funds at this
time.
 
 Off
Balance Sheet Arrangements
 
 As of
December 31, 2006, there were no off balance sheet arrangements.
 
 Going
Concern
 
 As shown
in the accompanying consolidated financial statements, we have a net income for
the year ended December 31, 2007 of $1,061, 945, however prior years showed
recurring losses of $614,269 (2006) and $1,422,255 (2005) and have a working
capital surplus of $392,252 as of December 31, 2007. We have recently emerged
from the development stage and have just started generating positive net
incomes. There is no guarantee that we will be able to raise enough capital or
continue to generate revenues to sustain our operations. These conditions raise
substantial doubt about our ability to continue as a going concern for a
reasonable period.
  12
 
 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 long-term 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 ($60,893) and
$31,098 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 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.
  13
 
 Recently Issued Accounting
Pronouncements
 
 In
February 2006, the FASB issued Statement of Financial Accounting Standard No.
155, “Accounting for Certain
Hybrid Instruments” (“SFAS 155”). FASB 155 allows financial instruments
that have embedded derivatives to be accounted for as a whole (eliminating the
need to bifurcate the derivative from its host) if the holder elects to account
for the whole instrument on a fair value basis. This statement is effective for
all financial instruments acquired or issued after the beginning of an entity’s
first fiscal year that begins after September 15, 2006. We will evaluate the
impact of SFAS 155 on our consolidated financial statements.
  In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115”, (“FAS 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
 
 In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
Uncertainty in Income Taxes.” This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. Management is still evaluating what effect this will have on our
consolidated financial statements.
 
 Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the American Institute of Certified Public Accountants, and
the SEC did not or are not believed by management to have a material impact on
our present or future consolidated financial statements included elsewhere
herein.
 
 Item 7. Financial Statements
 
 Index to
Financial Statements:
 UNITED
AMERICAN CORPORATION
 CONSOLIDATED
FINANCIAL STATEMENTS
 YEARS
ENDED DECEMBER 31, 2007 AND 2006
 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, 2007and December 31, 2006F-4
              Statement of Stockholders’ Equity
      (Deficit) and Comprehensive Loss for the Years Ended December 31,
      2007and December 31, 2006F-5
              Statements of Cash Flows for the
      Years Ended December 31, 2007and December 31, 2006F-6
              Notes to Financial
      Statements
  14
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
  To the
Shareholder of
 3894517
Canada Inc.,
 (Operating
as United American Corporation)
  We
have audited the non-consolidated balance sheet of 3894517 Canada Inc. (Operating as
United American Corporation), as at June 30, 2007 and December 31, 2006,
and the non-consolidated statements of earnings and deficit and cash flows for
the 6 months ended June 30, 2007 and for the year ended December 31, 2006. These
financial statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
  We
conducted our audit in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.
  In our
opinion, these non-consolidated financial statements present fairly, in all
material respects, the financial position of the Corporation as at June 30, 2007
and December 31, 2006, and the results of its operations and its cash flows for
the 6 month period ended June 30, 2007 and for the year ended December 31, 2006,
in accordance with Canadian generally accepted accounting
principles.
  Chartered
AccountantsLLP
  Montreal,
Quebec.
 January
30, 2008
 F-1
  UNITED
AMERICAN CORP
 CONDENSED
CONSOLIDATED BALANCE SHEET DECEMBER
31, 2007
 ASSETS(IN US$)Current
      Assets:Cash
      and cash equivalents
                
                $
                311,057Accounts
      receivable, net
                
                
                2,094,198Prepaid
      expenses and other current assets
                
                
                11,487Loan
      receivable - Teliphone Corp.
                
                
                300,000Loan
      receivable
                
                
                856,220Loan
      receivable - related company
                
                
                203,220Total
      Current Assets
                
                
                3,776,182Fixed
      assets, net of depreciation
                
                
                273,257TOTAL
      ASSETS
                
                $
                4,049,439LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)LIABILITIESCurrent
      Liabilities:Loans
      payable - related parties
                
                $
                97,705Other
      payables
                
                
                636,631Convertible
      debentures
                
                
                90,961Derivative
      liability
                
                
                18,885Accounts
      payable and accrued expenses
                
                
                2,539,748Total
      Current Liabilities
                
                
                3,383,930Total
      Liabilities
                
                
                3,383,930STOCKHOLDERS'
      EQUITY (DEFICIT)Common stock, $.001 Par Value; 100,000,000 shares
    authorizedand
      51,079,985 shares issued and outstanding
                
                
                51,080Additional
      paid-in capital
                
                
                5,288,832Accumulated
      deficit
                
                
                (4,692,431
                )Accumulated
      other comprehensive income (loss)
                
                
                18,028Total
      Stockholders' Equity (Deficit)
                
                
                665,509TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                
                $
                4,049,439
   The accompanying notes are
an integral part of the condensed consolidated financial
statements.
  F-2
 UNITED
AMERICAN CORPORATION
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 IN
      US$2007
                
                
                2006OPERATING
      REVENUESSales
                
                $
                30,321,299
                
                
                $
                19,991,191COST
      OF SALESInventory,
      beginning of period
                
                
                -
                
                
                
                51,652Purchases
                
                
                27,307,863
                
                
                
                18,255,600Inventory,
      end of period
                
                
                -
                
                
                
                -Total
      Cost of Sales
                
                
                27,307,863
                
                
                
                18,307,252GROSS
      PROFIT
                
                
                3,013,436
                
                
                
                1,683,939OPERATING
      EXPENSESSelling
      and promotion
                
                
                99,594
                
                
                
                43,659Research and development
                
                
                -
                
                
                
                124,232Professional
      and consulting fees
                
                
                415,418
                
                
                
                474,364Commissions
      and wages
                
                
                1,089,584
                
                
                
                1,177,397Other
      general and administrative expenses
                
                
                32,385
                
                
                
                218,096Depreciation,
      amortization and impairment
                
                
                236,150
                
                
                
                253,700Total
      Operating Expenses
                
                
                1,873,131
                
                
                
                2,291,448GAIN
      (LOSS) BEFORE OTHER INCOME
                
                
                1,140,305
                
                
                
                (607,509
                )OTHER
      INCOME (EXPENSE)Gain
      (loss) on derivative liability
                
                
                8,803
                
                
                
                (18,649
                )Interest
      Income
                
                
                
                
                
                
                15,000Interest
      expense
                
                
                (87,163
                )
                
                
                (124,505
                )Total
      Other Income (Expense)
                
                
                (78,360
                )
                
                
                (128,154
                )NET
      INCOME (LOSS) BEFORE PROVISION FORINCOME
      TAXES AND MINORITY INTEREST
                
                
                1,061,945
                
                
                
                (735,663
                )Minority
      interest
                
                
                -
                
                
                
                121,394NET
      INCOME (LOSS) BEFORE PROVISIONFOR
      INCOME TAXES
                
                
                1,061,945
                
                
                
                (614,269
                )Provision
      for Income Taxes
                
                
                -
                
                
                
                -NET
      INCOME (LOSS) APPLICABLETO
      COMMON SHARES
                
                $
                1,061,945
                
                
                $
                (614,269
                )NET
      INCOME (LOSS) PER BASIC AND DILUTED SHARESBASIC
                
                $
                0.02
                
                
                $
                (0.01
                )FULLY
      DILUTED
                
                $
                0.02
                
                
                
                (0.01
                )WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING - BASIC
                
                
                51,079,985
                
                
                
                49,969,985WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING - FULLY DILUTED
                
                
                52,508,556
                
                
                
                49,969,985COMPREHENSIVE
      INCOME (LOSS)Net
      income (loss)
                
                $
                1,061,945
                
                
                $
                (614,269
                )Other
      comprehensive income (loss)Currency
      translation adjustments
                
                
                (60,893
                )
                
                
                31,098Comprehensive
      income (loss)
                
                $
                1,001,052
                
                
                $
                (583,171
                )
   The accompanying notes are
an integral part of the condensed consolidated financial
statements.
  F-3
 UNITED
AMERICAN CORPORATION
 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 IN
      US$AccumulatedAdditional
                
                
                
                
                
                OtherCommon
      Stock
                
                
                Paid-in
                
                
                Accumulated
                
                
                ComprehenisveShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                Income
      (Loss)
                
                
                TotalShares
      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
      income (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
                )Adjustment,
      closure of 3894517 Canada Inc., see Note 10
                
                
                
                
                
                
                
                
                
                
                422,939
                
                
                
                (60,894
                )
                
                
                69,695
                
                
                
                431,740Net
      income (loss) for the year ended December 31, 2007
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,061,945
                
                
                
                (60,893
                )
                
                
                1,001,052Balance
      December 31, 2007
                
                
                51,079,985
                
                
                
                51,080
                
                
                
                5,288,832
                
                
                
                (4,753,325
                )
                
                
                78,922
                
                
                
                665,509
   The accompanying notes are
an integral part of the condensed consolidated financial
statements.
 F-4
 UNITED
AMERICAN CORPORATION
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 IN
      US$2007
                
                
                2006CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                
                $
                1,001,051
                
                
                $
                (614,269
                )Adjustments
      to reconcile net income (loss) to net cashprovided
      by (used in) operating activities:Depreciation,
      amortization and impairment
                
                
                236,150
                
                
                
                253,700Shares
      issued for services
                
                
                
                
                
                
                66,600Additional
      paid in capital
                
                
                422,939Comprehensive
      income (loss)
                
                
                (8,803
                )Gain
      on derivative liability
                
                
                8,803
                
                
                
                18,649Changes
      in assets and liabilities(Increase)
      decrease in accounts receivable
                
                
                (705,506
                )
                
                
                (1,228,387
                )Decrease
      in investment tax credits
                
                
                17,701
                
                
                
                -Decrease
      in interest receivable
                
                
                -
                
                
                
                (15,000
                )Decrease
      in inventory
                
                
                -
                
                
                
                39,140(Increase)
      decrease in prepaid expenses and other current assets
                
                
                34,246
                
                
                
                (132,746
                )Increase
      in deferred revenue
                
                
                -
                
                
                
                10,720(Decrease)
      in accounts payable andand
      accrued expenses
                
                
                681,050
                
                
                
                1,575,382Total
      adjustments
                
                
                686,580
                
                
                
                588,058Net
      cash provided by (used in) operating activities
                
                
                1,687,631
                
                
                
                (26,211
                )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisitions
      of fixed assets
                
                
                (89,465
                )
                
                
                (149,077
                )(Increase)
      decrease in loan receivable - related company
                
                
                (942,713
                )
                
                
                (53,312
                )Net
      cash (used in) investing activities
                
                
                (1,032,178
                )
                
                
                (202,389
                )CASH
      FLOWS FROM FINANCING ACTIVITES(Decrease)
      in bank overdraft
                
                
                -
                
                
                
                (8,195
                )Proceeds
      from loan payable, net of repayments
                
                
                -
                
                
                
                60,728Proceeds
      from loan payable - related parties, net of repayments
                
                
                (413,949
                )
                
                
                196,470Net
      cash provided by (used in) financing activities
                
                
                (413,949
                )
                
                
                249,003Effect
      of foreign currency
                
                
                -
                
                
                
                49,150NET
      INCREASE (DECREASE) INCASH
      AND CASH EQUIVALENTS
                
                
                241,504
                
                
                
                69,553CASH
      AND CASH EQUIVALENTS -BEGINNING
      OF YEAR
                
                
                69,553
                
                
                
                -CASH
      AND CASH EQUIVALENTS - END OF PERIOD
                
                $
                311,057
                
                
                $
                69,553CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                
                $
                78,164
                
                
                $
                117,973
   The accompanying notes are
an integral part of the condensed consolidated financial
statements.
  F-5
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
   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
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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.
(Until June 30, 2007) and with United American Telecom, Inc. (from August 27,
2007 - 3894517 Canada Inc. and United American Telecom, Inc. are wholly-owned
subsidiaries) 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%.
  F-7
 
  UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      1-
                  ORGANIZATION AND BASIS
      OF PRESENTATION (CONTINUED)
 
 On
October 23, 2006, the Company’s shareholders voted in the majority to spin-off
its entire holdings of 25,737,785 shares of the common stock of Teliphone Corp.
with an effective date of October 30, 2006. In accordance with APB 29,
“Accounting for Nomonetary Transactions”, the Company distributed the capital
stock they owned in Teliphone Corp. to their stockholders (a “spin-off”). As a
result, the Company recognized the value of the assets and liabilities spun-out
based on the respective recorded amounts after reduction for any impairment of
value due to the fact that this was a nonreciprocal transfer to owners. (See
Note 10).
 
 On July
1, 2007, the Company no longer required this operating unit and closed 3894517
Canada Inc.  Its wholesale telecommunications operations were
performed by the Company until September 30, 2007.  On August 24th, 2007
the Company incorporated United American Telecom, Inc., a Florida Corporation,
as a wholly-owned subsidiary, to manage its telecommunications operations from
October 1st, 2007 onwards.
 
 Going
Concern
 
 As shown
in the accompanying consolidated financial statements the Company has incurred
gains (losses) of $1,061,945 and ($614,269) for the years ended December 31,
2007 and 2006, and has a working capital surplus of $392,252 as of December 31,
2007.
 
 Up until
the current year, the Company incurred recurring losses.  The Company
has been successful in establishing distribution channels in North America and
Europe and generating significant revenue growth in the past eighteen months,
along with profitability in the current year. 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
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 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 continuously 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.
 
 The
Company shows “Other Liabilities” on its balance sheet as at December 31, 2007
of $636,631 since it estated its consolidated financial statements in 2006 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
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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.  The
inventory is related to the Company`s prior majority ownership of Teliphone
Corp., spun-off on October 30, 2006.  As a result, the Company did not
hold any inventory of finished goods during 2007.
  F-10
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 NOTE
      2-
                    SUMMARY
      OF SIGNIFICANT ACCOUNTING
  POLICIES (CONTINUED)
 
 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.
  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 up until June 30,
2007.  The Company’s functional currency from July 1, 2007 became the
US dollar as well as its reporting currency. The Company records translation
adjustments as accumulated other comprehensive income (loss).  The
Company recognized a gain (loss) of ($60,893) and $31,098 for the years ended
December 31, 2007 and 2006, 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.
  F-11
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
   NOTE
      2-
                      SUMMARY
      OF SIGNIFICANT ACCOUNTING
  POLICIES (CONTINUED)
 There are
limited estimates required in connection with recognition of revenue because
voice traffic is measured in automated switches and routers, and contractual
rates for traffic are used to bill or declare revenue on a monthly basis.
However, for certain voice contracts, historical traffic may be retroactively
re-rated within a contract period. This traffic re-rating is calculated and
recognized immediately in the month the new contractual rate is
established.  Although relatively infrequent, there can be material
disputes with customers over volume or traffic recognized on our customers’
switches. The Company’s practice is to maintain recorded revenue based on our
traffic data until the merits of a dispute are identified.
 
 Accounts
Receivable
 
 The
Company conducts business and extends credit based on an evaluation of the
customers’ financial condition, generally without requiring collateral. Exposure
to losses on receivables is expected to vary by customer due to the financial
condition of each customer. The Company monitors exposure to credit losses and
maintains allowances for anticipated losses considered necessary under the
circumstances.
  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, 2007.
 
 Income
Taxes
 
 The
Company accounts for income taxes utilizing the liability method of
accounting.  Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse.  Valuation allowances are established, when
necessary, to reduce deferred tax assets to amounts that are expected to be
realized.
  F-12
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      2-
                        SUMMARY
      OF SIGNIFICANT ACCOUNTING
  POLICIES (CONTINUED)
  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, 2007
and 2006 are included in general and administrative expenses in the consolidated
statements of operations.
  F-13
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      2-
                        SUMMARY
      OF SIGNIFICANT ACCOUNTING
  POLICIES (CONTINUED)
 Concentration
Risk
 
 In the
years ended December 31, 2007 and 2006, the Company generated 99% and 93% of
their sales from one customer. A major customer is a customer that represents
greater than 10% of the total sales.  As noted in NOTE 12- Subsequent
events, the major customer defaulted on payments to the Company in March, 2007
resulting in a temporary cessation of the Company’s business.
 
 In the
years ended December 31, 2007 and 2006, the Company incurred 85% and 52% 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-14
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
   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,
                    
                    
                    December
      31,2007
                    
                    
                    2006Net
      loss
                    
                    $
                    1,061,945
                    
                    
                    $
                    (614,269
                    )Weighted-average
      common sharesOutstanding
      (Basic)
                    
                    
                    51,079,985
                    
                    
                    
                    50,109,875Weighted-average
      common stockEquivalentsConvertible
      debentures
                    
                    
                    1,428,571
                    
                    
                    
                    1,428,571Stock
      options
                    
                    
                    -
                    
                    
                    
                    -Warrants
                    
                    
                    -
                    
                    
                    
                    -Weighted-average
      common sharesOutstanding
      (Diluted)
                    
                    
                    52,508,556
                    
                    
                    
                    51,538,446
 
 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-15
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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 2007 is equivalent to compensation
expense for all awards granted prior to, but not yet vested as of January 1,
2007, 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, 2007 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-16
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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-17
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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-18
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      3-
                  FIXED
      ASSETS
 
 Fixed
assets as of December 31, 2007were as follows:
 
 Estimated
      UsefulLives
      (Years)Computer
      equipment
                  
                  
                  5
                  
                  
                  $
                  1,075,896Less:
      accumulated depreciation
                  
                  
                  
                  
                  
                  
                  (802,639
                  )Fixed
      assets, net
                  
                  
                  
                  
                  
                  $
                  273,257
 
 There
      were $253,700 and $253,700 depreciation charged to operations for the
      years ended December 31, 2007 and 2006,
  respectively.
  NOTE
      4-
                  RELATED PARTY LOANS
      AND TRANSACTIONS
 
 On August
1, 2006, the Company converted $421,080 of the $721,080 of its loans receivable
into Teliphone Corp. (formerly OSK Capital II Corp) common stock.  The
$300,000 remaining on the loan has become interest bearing at 12% per annum,
payable monthly with a maturity date of August 1, 2009. No interest has been
paid since the $300,000 became interest bearing. The Company has recognized $0
of interest receivable through December 31, 2007.  In addition, there
are approximately $203,220 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 $97,705 in a related party loan that does not accrue
interest.
 
 The
Company paid commissions to a major shareholder and a company with common
ownership in the amount of $794,073 and $692,865 in the years ended December 31,
2007 and 2006, respectively.
  F-19
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 NOTE
      5-
                  LOANS PAYABLE –
      NON-RELATED PARTIES
 
 The
Company does not have any loans payable, non-related parties.
 
 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.
 
 On
October 15th, 2007,
the Company and Strathmere Associates International Limited agreed to extend the
maturity date to October 31, 2008, while maintaining the same intrest 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
$0.055 per share (the original conversion rate was $.20 per share, later reduced
to $0.07). 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 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, 2007 and 2006 the derivative call option was approximately $0.0194
per share. The (loss) on the derivative liability for the year ended December
31, 2006 was ($18,885).
 
 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, 2007 and 2006 was approximately
$12,000, respectively. At December 31, 2007, there was no interest
accrued.
  F-20
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      7-
                  COMMITMENTS
 
 Operating
Lease
 
 The
Company has entered into operating lease agreements which mature between
November 11, 2008 and December 19, 2009. Minimum rentals for the next three
years and in the aggregate are:
  Year
      EndingDecember
      31,2007
                  
                  $
                  32,2292008
                  
                  
                  31,6552009
                  
                  
                  23,229Total
                  
                  $
                  87,113
 
 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,
2007.
 
 During
the year ended December 31, 2006, the Company issued 1,110,000 for services at
$.06 per share for a value of $66,600.
 
 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.
  F-21
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 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, 2007, deferred tax assets consist of the following:
  Net
      operating losses:
                    
                    $
                    $4,638,000Valuatio
      allowance:
                    
                    $
                    (4,638,000
                    )NET:
                    
                    $
                    -
 At
December 31, 2007, the Company had a net operating loss carryforwards of
approximately $4,638,000, available to offset future taxable income through
2027.  The Company established valuation allowances equal to the full
amount of the deferred tax assets due to the uncertainty of the utilization of
the operating losses in future periods.
 
 
 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, 2007
and 2006 is summarized as follows:
  2007
                  
                  
                  2006Federal
      statutory rate
                  
                  
                  (34.0
                  )%
                  
                  
                  (34.0
                  )%State
      income taxes, net of federal benefits
                  
                  
                  0.0
                  
                  
                  
                  0.0Valuation
      allowance
                  
                  
                  34.0
                  
                  
                  
                  34.00
                  %
                  
                  
                  0
                  %
 
 F-22
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
  NOTE
      10-
                  REORGANIZATION OF
      OPERATING SUBSIDIARIES
 
 On June
30, 2007, the Company ceased operations of its wholesale telecommunications
business within its operating subsidiary 3894517 Canada Inc.  As a
result, the company began its required processes in order to close the operating
subsidiary with the Canadian regulators effective this date.  The net
result was $422,939 recognized as contributed capital, ($60,894) in accumulated
deficit and $69,695 in comprehensive income.
 
 On August
20, 2007, the Company created a new operating subsidiary, United American
Telecom, Inc., a Florida Company.  All operations of its wholesale
telecommunications business occurred within this new operating subsidiary from
October 1, 2007 onwards.
 
 From July
1, 2007 to September 30, 2007, all wholesale telecommunications business
operated through the Company.
  NOTE
      11-
                  SEGMENT
      INFORMATION
 
 The
Company’s reportable operating segments include wholesale VoIP services which is
the physical buying of minutes (3894517 Canada Inc. and United American Telecom,
Inc.) over brokered routes and direct routes.  A brokered route is one
where the Company purchases from a supplier who has direct termination
capabilities with the local wireline and mobile operators in the country and
re-sell the termination destination to the Company’s customers.  A
direct route is when the Company has the ability to directly terminate the
traffic with the local wireline and mobile operators, such as the Company’s
direct routes in Mali, Gabon and Cameroon, Africa.  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, 2007 are as follows:
 
 Wholesale
                  
                  
                  WholesaleServices
                  
                  
                  Services
                  
                  
                  ConnectionCorporate
                  
                  
                  Brokered
                  
                  
                  Direct
                  
                  
                  Services
                  
                  
                  TotalSales
                  
                  $
                  -
                  
                  
                  $
                  30,321,299
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  30,321,299Cost
      of sales
                  
                  
                  -
                  
                  
                  
                  27,307,863
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  27,307,863Gross
      profit
                  
                  
                  -
                  
                  
                  
                  3,013,436
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,013,436Operating
      expenses
                  
                  
                  874,457
                  
                  
                  
                  998,674
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,873,131Depreciation,
      amortization and impairment
                  
                  
                  165,957
                  
                  
                  
                  70,193
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  236,150Other
      income (expense)
                  
                  
                  (78,360
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (78,360
                  )Net
      income (loss)
                  
                  
                  (1,118,774
                  )
                  
                  
                  2,180,719
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,061,945Segment
      assets
                  
                  
                  1,359,440
                  
                  
                  
                  2,689,999
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,049,439Fixed
      Assets, net of depreciation
                  
                  
                  273,257
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  273,257
  F-23
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
      11-
                    SEGMENT
      INFORMATION
(CONTINUED)
 
 Operating
segment data for the year ended December 31, 2006 are as follows:
 
 Wholesale
                  
                  
                  WholesaleServices
                  
                  
                  Services
                  
                  
                  ConnectionCorporate
                  
                  
                  Brokered
                  
                  
                  Direct
                  
                  
                  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 (loss)
                  
                  
                  -
                  
                  
                  
                  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
                  
                  
                  
                  253,700Interest
      (net)
                  
                  
                  (3,649
                  )
                  
                  
                  (54,776
                  )
                  
                  
                  (48,000
                  )
                  
                  
                  (21,729
                  )
                  
                  
                  (128,154
                  )Net
      income (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
 
 In
addition, the segment data broken out by geographical location for the year
ended December 31, 2007 are as follows:
 
 North,
      Central
                  
                  
                  Europe,
      Middleand
      South
                  
                  
                  East
      andAmerica
                  
                  
                  Africa
                  
                  
                  Asia
                  
                  
                  TotalSales
                  
                  $
                  7,066,767
                  
                  
                  $
                  20,939,677
                  
                  
                  $
                  2,314,855
                  
                  
                  $
                  30,321,299Cost
      of sales
                  
                  $
                  6,364,447
                  
                  
                  $
                  18,858,619
                  
                  
                  $
                  2,084,796
                  
                  
                  
                  27,307,863Gross
      profit (loss)
                  
                  $
                  702,320
                  
                  
                  $
                  2,081,058
                  
                  
                  $
                  230,058
                  
                  
                  
                  3,013,436Operating
      expenses
                  
                  $
                  436,557
                  
                  
                  $
                  1,293,571
                  
                  
                  $
                  143,003
                  
                  
                  
                  1,873,131Depreciation,
      amortization and impairment
                  
                  $
                  55,038
                  
                  
                  $
                  163,084
                  
                  
                  $
                  18,029
                  
                  
                  
                  236,150Other
      Income (net)
                  
                  $
                  (18,263
                  )
                  
                  $
                  (54,115
                  )
                  
                  $
                  (5,982
                  )
                  
                  
                  (78,360
                  )Net
      income (loss)
                  
                  $
                  247,500
                  
                  
                  $
                  733,372
                  
                  
                  $
                  81,073
                  
                  
                  
                  1,061,945Segment
      assets
                  
                  $
                  943,774
                  
                  
                  $
                  2,796,514
                  
                  
                  $
                  309,151
                  
                  
                  
                  4,049,439Fixed
      Assets, net of depreciation
                  
                  $
                  63,686
                  
                  
                  $
                  188,709
                  
                  
                  $
                  20,862
                  
                  
                  
                  273,257
  F-24
 UNITED
AMERICAN CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
   NOTE
      11-
                        SEGMENT
      INFORMATION (CONTINUED)
 The
geographical location segmentation information for the year ended December 31,
2006 is as follows:
 
 North,
      Central
                  
                  
                  Europe,
      Middleand
      South
                  
                  
                  East
      andAmerica
                  
                  
                  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
  NOTE
      12-
                  SUBSEQUENT
      EVENTS
 
 In May,
2008, as noted in NOTE 2- Concentration Risk, the company’s Major Customer
defaulted on $1,400,000 of payments to the Company.  As a result, the
Company will incur losses of up to $1,400,000.  Since the customer was
a major customer, accounting for over 99% of the Company’s revenues, the default
in payment has placed considerable doubt that the Company can continue its
operations.  The Company’s Management is considering its options,
including, but not limited to, legal action against the defaulting
customer.
  F-25
  Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
 
 On April
16, 2008, we dismissed Michael Pollack, CPA ("Pollack") as our principal
accountant. We engaged Madsen & Associates, CPA’s Inc. (the "Madsen &
Associates") as our principal accountants effective April 16, 2008. The decision
to change accountants was approved by our board of directors.  We did not
consult with Pollack on any matters prior to retaining such firm as our
principal accountants.
 
 Pollack’s
report dated April 16, 2007 on our balance sheet as of December 31, 2006, and
the statement of operations, statement of changes in stockholders' equity, and
statement of cash flows for the years ended December 31, 2006, 2005, 2004 and
2003, and for the cumulative period from inception, July 17, 1992, to December
31, 2006 did not contain an adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope, or accounting
principles.
 
 Item 8A. 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, 2007. This evaluation was carried
out under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, Mr. Benoit Laliberté. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of December 31, 2007, 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, 2007 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.
 
 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.
 15
  Item 8B. Other information
 
 None.
 
 PART III
 
 Item 9. 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) HeldBenoit
      Laliberté
              35
              Chief
      Executive Officer, Chief Financial Officer, and
  Director
 
 Set forth
below is a brief description of the background and business experience of each
of our current executive officers and directors.
 
 Mr.
Benoit Laliberte:
 Benoît
Laliberté was born on July 18, 1972. In 1990, Mr. Laliberte started his first
computer business,  In 1994, he created the EVAC (Electronic Virus
Activity Control) technology meant to protect computers from viruses. In 1996,
Mr. Laliberte was chosen Young Entrepreneur of the Year by the Business
Development Bank of Canada (BDC). Mr. Laliberte created in 1997 the Winbit
PowerVec for ASP and the Winbit Terminal. In 1999, Mr. Laliberte created a wall
mounted decentralized WinBit server, and acquired a chain of computer stores,
with revenues in excess of $6 million and employing approximately 60
persons.
 
 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.
 
 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.
  16
 
 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. On February
22, 2008, Mr. Laliberté was found guilty of 33 counts for improperly filing
publicly his personal changes of position with his stock of the company, as well
as 4 counts of insider trading.  Sentencing is scheduled for June 25,
2008.  Mr. Laliberté is appealing the decision.
 
 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, 2007, 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, 2007 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, 2007, the following 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,
2007:
 
 Name
      and
                principal
      position
              Number
      of
                late
      reports
              Transactions
      not
                timely
      reported
              Known
      failures to
                file
      a required formBenoit
      Laliberté
              0
              0
              0
  17
 
 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.
 
 Item 10. 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 2007 and
2006.
 
 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
                ($)
              Total
                ($)Benoit
      Laliberté (1)
                CEO
      & CFO
              2007
                2006
              794,073
                692,865
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              794,073
                692,865George
      Metrakos (2)
                CEO
      & CFO
              2007
                2006
              89,225
                -
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              89,225
                -Simon
      Lamarche
                (3)
                CEO
      & CFO
              2007
                2006
              -
                34,660
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              -
                -
              -
                34,660
 
 (1)
              Mr.
      Laliberté was appointed to serve as our Chief Executive Officer and Chief
      Financial Officer on May 12th, 2008. The information provided in the
      summary compensation table includes all compensation paid to Mr. Laliberté
      for the full fiscal years ended December 31, 2007 and
  2006.(2)
              Mr.
      Metrakos was appointed to serve as our Chief Executive Officer and Chief
      Financial Officer on July 1, 2007. The information provided in the summary
      compensation table includes all compensation paid to Mr. Metrakos for the
      full fiscal years ended December 31, 2007 and 2006.(3)
              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, 2007 and
  2006.
  Narrative
Disclosure to the Summary Compensation Table
  We have
not entered into an employment agreement with Mr. Laliberté. 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, 2007 and
2006, all of the amounts paid were in connection to commissions received on
sales of wholesale telecommunication services. Mr. Laliberté was not granted any
stock option or stock awards during the fiscal year ended December 31, 2007 or
2006.
  18
 
 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,
2007.
 
 OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      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
                (#)Benoit
      Laliberté
              -
              -
              -
              -
              -
              -
              -
              -
              -
 
 Compensation
of Directors
 
 The table
below summarizes all compensation of our directors as of December 31,
2007.
 
 DIRECTOR
      COMPENSATIONName
              Fees
      Earned or
                Paid
      in
                Cash
                ($)
              Stock
      Awards
                ($)
              Option
      Awards
                ($)
              Non-Equity
                Incentive
                Plan
                Compensation
                ($)
              Non-Qualified
                Deferred
                Compensation
                Earnings
                ($)
              All
                Other
                Compensation
                ($)
              Total
                ($)Benoit
      Laliberté
              -
              -
              -
              -
              -
              -
              -George
      Metrakos
              -
              -
              -
              -
              -
              -
              -
 
 Narrative
Disclosure to the Director Compensation Table
 
 The all
fees earned or paid in cash to Benoit Laliberté as were earned in connection
with his employment agreement as an executive officer. Mr. Laliberté 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.
  19
  Item 11. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
 
 The
following table sets forth, as of May 15, 2008, 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 May 15, 2008. Except as otherwise
indicated, the address of each person named in this table is c/o United American
Corporation, 218 de la Coulee, Mount St. Hilaire,, Quebec, Canada J3H
5Z6.
  Title
      of class
              Name
      andaddressof
                beneficialowner
      (1)
              Amount
      of
                beneficial
                ownership
              Percent
                of
      class*Executive
      Officers & Directors:Common
              Benoit
      Laliberté
              26,250,000
      shares
              52
      %Common
              George
      Metrakos
              650,000
      shares (2)
              1.3%Total
      of All Directors and Executive Officers:
              26,900,000
      shares
              53.3%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.
 
 Item 12. 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, 2007 or in
any presently proposed transaction which, in either case, has or will materially
affect us.
  20
  Item 13. Exhibits
 
 Exhibit
              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 2002
 (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
 
 Item 14. 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, 2007 and December 31, 2006
were approximately $55,000 and $108,507 respectively.
 
 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, 2007 and 2006.
 
 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, 2007 and 2006 were $0 and $0 respectively.
  21
 
 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 CorporationMay
      19 , 2008
                By:
                /s/ Benoit
      LalibertéBenoit
      Laliberté
                  Chief
      Executive Officer,
                    Chief
      Financial Officer and Director
  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:
  May
      19 , 2008
                  By:
                  /s/ Benoit
      LalibertéBenoit
      Laliberté
                    Director
    22