[
X ]
|
QUARTERLY
REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
[
]
|
TRANSITION
REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
UNITED
AMERICAN CORPORATION
|
(Exact
name of small business issuer as specified in its
charter)
|
Florida
(State
or other jurisdiction of
incorporation
or organization)
|
95-4720231
(I.R.S.
Employer
Identification
No.)
|
4150
Ste-Catherine Quest, Suite 200, Montreal, Quebec, Canada H3Z
0A1
(Address
of principal executive offices)
|
|
514-313-6010
(Issuer’s
telephone number)
|
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Page
|
||
Item
1.
|
Financial
Statements
|
1
|
Item
2.
|
Management’s
Discussion and Analysis
|
23
|
Item
3.
|
Controls
and Procedures
|
30
|
Item
1.
|
Legal
Proceedings
|
32
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
32
|
Item
3.
|
Defaults
Upon Senior Securities
|
32
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
32
|
Item
5.
|
Other
Information
|
32
|
Item
6.
|
Exhibits
|
32
|
Our
unaudited condensed consolidated financial statements included
in this
Form 10-QSB are as follows:
|
|
Unaudited
Condensed Consolidated Balance Sheet as of September 30,
2007
|
2
|
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Income
(Loss) for the nine months and three months ended September 30,
2007 and
2006;
|
3
|
Unaudited
Condensed Consolidated Statements of Cash Flows for the nine months
ended
September 30, 2007 and 2006;
|
4
|
Notes
to Unaudited Condensed Consolidated Financial Statements;
|
5
|
UNITED
AMERICAN
CORP
|
||||
CONDENSED
CONSOLIDATED BALANCE
SHEET
|
||||
SEPTEMBER
30,
2007
|
||||
(UNAUDITED)
|
||||
ASSETS
|
||||
(IN
US$)
|
||||
Current
Assets:
|
||||
Cash
and cash
equivalents
|
$ |
58,016
|
||
Accounts
receivable,
net
|
1,776,716
|
|||
Prepaid
expenses and
other current assets
|
55,325
|
|||
Loan
receivable -
related company
|
452,563
|
|||
Total
Current Assets
|
2,342,620
|
|||
Fixed
assets, net of
depreciation
|
349,753
|
|||
TOTAL
ASSETS
|
$ |
2,692,373
|
||
LIABILITIES
AND STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||
LIABILITIES
|
||||
Current
Liabilities:
|
||||
Loans
payable -
related parties
|
$ |
162,049
|
||
Other
payables
|
636,631
|
|||
Convertible
debentures
|
90,961
|
|||
Derivative
liability
|
18,885
|
|||
Accounts
payable and
accrued expenses
|
2,105,042
|
|||
Total
Current Liabilities
|
3,013,568
|
|||
Total
Liabilities
|
3,013,568
|
|||
STOCKHOLDERS'
EQUITY
(DEFICIT)
|
||||
Common
stock, $.001 Par Value;
100,000,000 shares authorized
|
||||
and
51,079,985 shares issued and outstanding
|
51,080
|
|||
Additional
paid-in
capital
|
4,865,893
|
|||
Accumulated
deficit
|
(5,287,392 | ) | ||
Accumulated
other
comprehensive income (loss)
|
49,224
|
|||
Total
Stockholders' Equity (Deficit)
|
(321,195 | ) | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 2,692,373 |
UNITED
AMERICAN
CORPORATION
|
||||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS
OF OPERATIONS AND
|
||||||||||||||||
COMPREHENSIVE
INCOME
(LOSS)
|
||||||||||||||||
FOR
THE NINE AND THREE MONTHS
ENDED SEPTEMBER 30, 2007 AND 2006
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
IN
US$
|
IN
US$
|
|||||||||||||||
NINE
MONTHS
|
THREE
MONTHS
|
|||||||||||||||
SEPTEMBER
30,
|
SEPTEMBER
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
OPERATING
REVENUES
|
||||||||||||||||
Sales
|
$ |
21,209,287
|
$ |
10,838,193
|
$ |
8,039,237
|
$ |
6,490,857
|
||||||||
COST
OF
SALES
|
||||||||||||||||
Inventory,
beginning
of period
|
-
|
51,652
|
-
|
15,862
|
||||||||||||
Purchases
|
19,005,817
|
9,587,898
|
7,690,158
|
5,827,902
|
||||||||||||
Inventory,
end of
period
|
-
|
(11,034 | ) |
-
|
(11,034 | ) | ||||||||||
Total
Cost of Sales
|
19,005,817
|
9,628,516
|
7,690,158
|
5,832,730
|
||||||||||||
GROSS
PROFIT
|
2,203,470
|
1,209,677
|
349,079
|
658,127
|
||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Selling
and
promotion
|
95,182
|
73,728
|
1,954
|
17,508
|
||||||||||||
Professional
and
consulting fees
|
319,778
|
234,673
|
101,463
|
95,485
|
||||||||||||
Commissions
and
wages
|
1,052,665
|
821,408
|
160,285
|
379,839
|
||||||||||||
Other
general
and administrative expenses
|
20,529
|
116,382
|
6,802
|
44,291
|
||||||||||||
Depreciation,
amortization and impairment
|
178,931
|
184,700
|
61,096
|
65,950
|
||||||||||||
Total
Operating Expenses
|
1,667,085
|
1,430,891
|
331,600
|
603,073
|
||||||||||||
GAIN
(LOSS) BEFORE OTHER
INCOME
|
536,385
|
(221,214 | ) |
17,479
|
55,054
|
|||||||||||
OTHER
INCOME
(EXPENSE)
|
||||||||||||||||
Gain
on
derivative liability
|
8,803
|
-
|
-
|
-
|
||||||||||||
Interest
expense
|
(78,203 | ) | (28,453 | ) | (13,663 | ) | (11,826 | ) | ||||||||
Total
Other Income (Expense)
|
(69,400 | ) | (28,453 | ) | (13,663 | ) | (11,826 | ) | ||||||||
NET
INCOME (LOSS) BEFORE PROVISION
FOR
|
||||||||||||||||
INCOME
TAXES AND
MINORITY INTEREST
|
466,985
|
(249,667 | ) |
3,816
|
43,228
|
|||||||||||
Minority
interest
|
-
|
112,154
|
-
|
64,334
|
||||||||||||
NET
INCOME (LOSS) BEFORE
PROVISION
|
||||||||||||||||
FOR
INCOME
TAXES
|
466,985
|
(137,513 | ) |
3,816
|
107,562
|
|||||||||||
Provision
for Income
Taxes
|
-
|
-
|
-
|
-
|
||||||||||||
NET
INCOME (LOSS)
APPLICABLE
|
||||||||||||||||
TO
COMMON
SHARES
|
$ |
466,985
|
$ | (137,513 | ) | $ |
3,816
|
$ |
107,562
|
|||||||
NET
INCOME (LOSS) PER BASIC AND
DILUTED SHARES
|
||||||||||||||||
BASIC
|
$ |
0.01
|
$ | (0.00 | ) | $ |
0.00
|
$ |
0.00
|
|||||||
FULLY
DILUTED
|
$ |
0.01
|
(0.00 | ) | $ |
0.00
|
0.00
|
|||||||||
WEIGHTED
AVERAGE NUMBER OF
COMMON
|
||||||||||||||||
SHARES
OUTSTANDING - BASIC
|
51,079,985
|
49,969,985
|
51,079,985
|
49,969,985
|
||||||||||||
WEIGHTED
AVERAGE NUMBER OF
COMMON
|
||||||||||||||||
SHARES
OUTSTANDING - FULLY DILUTED
|
52,508,556
|
49,969,985
|
52,508,556
|
49,969,985
|
||||||||||||
COMPREHENSIVE
INCOME
(LOSS)
|
||||||||||||||||
Net
income
(loss)
|
$ |
466,985
|
$ | (137,513 | ) | $ |
3,816
|
$ |
107,562
|
|||||||
Other
comprehensive income (loss)
|
||||||||||||||||
Currency
translation adjustments
|
(20,896 | ) |
45,692
|
(14,222 | ) | (8,085 | ) | |||||||||
Comprehensive
income
(loss)
|
$ |
446,089
|
$ | (91,821 | ) | $ | (10,406 | ) | $ |
99,477
|
UNITED
AMERICAN
CORPORATION
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
||||||||
FOR
THE NINE MONTHS ENDED
SEPTEMBER 30, 2007 AND 2006
|
||||||||
(UNAUDITED)
|
||||||||
IN
US$
|
||||||||
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING
ACTIVITIES
|
||||||||
Net
income
(loss)
|
$ |
466,985
|
$ | (137,513 | ) | |||
Adjustments
to
reconcile net income (loss) to net cash
|
||||||||
provided
by (used in) operating activities:
|
||||||||
Depreciation,
amortization and impairment
|
178,931
|
184,700
|
||||||
Gain
on derivative liability
|
(8,803 | ) |
-
|
|||||
Changes
in assets and
liabilities
|
||||||||
(Increase)
in accounts receivable
|
(141,208 | ) | (559,049 | ) | ||||
Decrease
in inventory
|
-
|
40,618
|
||||||
(Increase)
in prepaid expenses and other current assets
|
(10,433 | ) | (108,846 | ) | ||||
Increase
in deferred revenue
|
-
|
8,290
|
||||||
Increase
in accounts payable and
|
||||||||
and
accrued expenses
|
68,453
|
155,245
|
||||||
Total
adjustments
|
86,940
|
(279,042 | ) | |||||
Net
cash provided by (used in) operating
activities
|
553,925
|
(416,555 | ) | |||||
CASH
FLOWS FROM INVESTING
ACTIVITIES
|
||||||||
Acquisitions
of
fixed assets
|
(83,194 | ) | (117,935 | ) | ||||
(Increase)
decrease in loan receivable - related company
|
30,368
|
-
|
||||||
Net
cash (used in) investing activities
|
(52,826 | ) | (117,935 | ) | ||||
CASH
FLOWS FROM FINANCING
ACTIVITES
|
||||||||
(Decrease)
in bank overdraft
|
-
|
(16,535 | ) | |||||
Proceeds
from loan payable - related parties, net of
repayments
|
(430,876 | ) |
505,333
|
|||||
Net
cash provided by (used in) financing
activities
|
(430,876 | ) |
488,798
|
|||||
Effect
of foreign
currency
|
(81,760 | ) |
45,692
|
|||||
NET
INCREASE (DECREASE)
IN
|
||||||||
CASH
AND
CASH EQUIVALENTS
|
(11,537 | ) |
-
|
|||||
CASH
AND CASH EQUIVALENTS
-
|
||||||||
BEGINNING
OF YEAR
|
69,553
|
-
|
||||||
CASH
AND CASH EQUIVALENTS - END OF
PERIOD
|
$ |
58,016
|
$ |
-
|
||||
CASH
PAID DURING THE PERIOD
FOR:
|
||||||||
Interest
expense
|
$ |
51,203
|
$ |
22,453
|
NOTE
1-
|
ORGANIZATION
AND BASIS OF
PRESENTATION
|
NOTE
1-
|
ORGANIZATION
AND BASIS OF PRESENTATION
(CONTINUED)
|
NOTE
1-
|
ORGANIZATION
AND BASIS OF PRESENTATION
(CONTINUED)
|
NOTE
1-
|
ORGANIZATION
AND BASIS OF PRESENTATION
(CONTINUED)
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
|
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
|
|
|
Fixed
Assets
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
|
|
|
Earnings
(Loss) Per Share of Common
Stock
|
|
September
30,
|
September
30,
|
||||||
2007
|
2006
|
|||||||
Net
income
(loss)
|
$ |
466,985
|
$ | (137,513 | ) | |||
Weighted-average
common
shares
|
||||||||
Outstanding
(Basic)
|
51,079,985
|
49,969,985
|
||||||
Weighted-average
common
stock
|
||||||||
Equivalents
|
||||||||
Convertible
debentures
|
1,428,571
|
500,000
|
||||||
Stock
options
|
-
|
-
|
||||||
Warrants
|
-
|
-
|
||||||
Weighted-average
common
shares
|
||||||||
Outstanding
(Diluted)
|
52,508,556
|
50,469,985
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
|
|
NOTE
2-
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
|
|
NOTE
3-
|
FIXED
ASSETS
|
Estimated
Useful
|
||||||||
Lives
(Years)
|
||||||||
Computer
equipment
|
5
|
$ |
1,172,524
|
|||||
Furniture
and fixtures
|
5
|
2,334
|
||||||
Vehicle
|
5
|
20,849
|
||||||
1,195,707
|
||||||||
Less:
accumulated depreciation
|
(845,954 | ) | ||||||
Fixed
assets, net
|
$ |
349,753
|
|
There
was $178,931 and $184,700 depreciation charged to operations
for the nine
months ended September 30, 2007 and 2006,
respectively.
|
NOTE
4-
|
RELATED
PARTY LOANS AND
TRANSACTIONS
|
NOTE
5-
|
CONVERTIBLE
DEBENTURES
|
NOTE
6-
|
COMMITMENTS
|
Year
Ending
|
||||
December
31,
|
||||
2007
(3 months)
|
$ |
8,057
|
||
2008
|
31,655
|
|||
2009
|
23,229
|
|||
Total
|
$ |
62,941
|
NOTE
7-
|
STOCKHOLDERS’
EQUITY (DEFICIT)
|
NOTE
8-
|
PROVISION
FOR INCOME TAXES
|
Net
operating
losses
|
$ |
1,587,800
|
||
Valuation
allowance
|
(1,587,800 | ) | ||
$ |
-
|
2007
|
2006
|
|||||||
Federal
statutory rate
|
(34.0 | )% | (34.0 | )% | ||||
State
income taxes, net of federal benefits
|
0.0
|
0.0
|
||||||
Valuation
allowance
|
34.0
|
34.0
|
||||||
0 | % | 0 | % |
NOTE
10-
|
SPIN-OFF
OF TELIPHONE CORP.
|
Balances
of Teliphone Corp. at
October 30, 2006:
|
||||
Cash
|
$ | (8,710 | ) | |
Accounts
receivable
|
18,885
|
|||
Inventory
|
12,512
|
|||
Other
assets
|
142,007
|
|||
Fixed
assets
|
97,484
|
|||
Loans
payable
|
(363,415 | ) | ||
Accounts
payable and accrued
expenses
|
(126,125 | ) | ||
Current
notes payable -
related
|
(155,005 | ) | ||
Deferred
revenue
|
(10,720 | ) | ||
Other
payables
|
(187,868 | ) | ||
$ | (580,955 | ) |
NOTE
11-
|
SEGMENT
INFORMATION
|
Wholesale
|
Wholesale
|
|||||||||||||||||||
Services
|
Services
|
Connection
|
||||||||||||||||||
Corporate
|
Brokered
|
Direct
|
Services
|
Total
|
||||||||||||||||
Sales
|
$ |
20,407,449
|
$ |
801,838
|
$ |
-
|
$ |
21,209,287
|
||||||||||||
Cost
of sales
|
18,954,175
|
51,642
|
-
|
19,005,817
|
||||||||||||||||
Gross
profit
|
1,453,274
|
750,196
|
-
|
2,203,470
|
||||||||||||||||
Operating
expenses
|
339,888
|
1,101,828
|
46,438
|
-
|
1,488,154
|
|||||||||||||||
Depreciation,
amortization and impairment
|
178,931
|
-
|
-
|
178,931
|
||||||||||||||||
Interest
(net) and other
|
35,803
|
(76,663 | ) | (28,540 | ) |
-
|
(69,400 | ) | ||||||||||||
Net
income (loss)
|
(304,085 | ) |
95,852
|
675,218
|
-
|
466,985
|
||||||||||||||
Segment
assets
|
2,440,598
|
251,775
|
-
|
2,692,373
|
||||||||||||||||
Fixed
Assets, net of depreciation
|
145,873
|
203,880
|
-
|
349,753
|
Wholesale
|
Connection
|
|||||||||||||||
Corporate
|
Services
|
Services
|
Total
|
|||||||||||||
Sales
|
$ |
-
|
$ |
10,499,030
|
$ |
339,163
|
$ |
10,838,193
|
||||||||
Cost
of sales
|
-
|
9,393,932
|
234,584
|
9,628,516
|
||||||||||||
Gross
profit (loss)
|
-
|
1,105,098
|
104,579
|
1,209,677
|
||||||||||||
Operating
expenses
|
99,065
|
725,392
|
421,734
|
1,246,191
|
||||||||||||
Depreciation,
amortization and impairment
|
133,830
|
14,660
|
36,210
|
184,700
|
||||||||||||
Interest
(net)
|
(9,000 | ) | (647 | ) | (18,806 | ) | (28,453 | ) | ||||||||
Net
income (loss)
|
(241,895 | ) |
364,399
|
(372,171 | ) | (249,667 | ) | |||||||||
Segment
assets
|
312,270
|
1,009,545
|
167,335
|
1,489,150
|
||||||||||||
Fixed
Assets, net of depreciation
|
312,270
|
145,985
|
115,081
|
573,336
|
NOTE
11-
|
SEGMENT
INFORMATION
(CONTINUED)
|
North,
Central
|
Europe,
Middle
|
|||||||||||||||
and
South
|
East
and
|
|||||||||||||||
America
|
Africa
|
Asia
|
Total
|
|||||||||||||
Sales
|
$ |
2,896,407
|
$ |
17,677,457
|
$ |
635,423
|
$ |
21,209,287
|
||||||||
Cost
of sales
|
2,595,494
|
15,840,915
|
569,408
|
19,005,817
|
||||||||||||
Gross
profit (loss)
|
300,913
|
1,836,542
|
66,015
|
2,203,470
|
||||||||||||
Operating
expenses
|
203,227
|
1,240,342
|
44,585
|
1,488,154
|
||||||||||||
Depreciation,
amortization and impairment
|
24,435
|
149,135
|
5,361
|
178,931
|
||||||||||||
Interest
(net) and other
|
(9,477 | ) | (57,843 | ) | (2,079 | ) | (69,400 | ) | ||||||||
Net
income (loss)
|
63,773
|
389,221
|
13,991
|
466,985
|
||||||||||||
Segment
assets
|
367,679
|
2,244,032
|
80,663
|
2,692,373
|
||||||||||||
Fixed
Assets, net of depreciation
|
47,763
|
291,511
|
10,478
|
349,753
|
North,
Central
|
Europe,
Middle
|
|||||||||||||||
and
South
|
East
and
|
|||||||||||||||
America
|
Africa
|
Asia
|
Total
|
|||||||||||||
Sales
|
$ |
4,123,832
|
$ |
4,130,807
|
$ |
2,583,554
|
$ |
10,838,193
|
||||||||
Cost
of sales
|
3,663,561
|
3,669,758
|
2,295,197
|
9,628,516
|
||||||||||||
Gross
profit (loss)
|
460,271
|
461,049
|
288,357
|
1,209,677
|
||||||||||||
Operating
expenses
|
474,164
|
474,966
|
297,061
|
1,246,191
|
||||||||||||
Depreciation,
amortization and impairment
|
70,277
|
70,396
|
44,027
|
184,700
|
||||||||||||
Interest
(net)
|
(10,826 | ) | (10,844 | ) | (6,783 | ) | (28,453 | ) | ||||||||
Net
income (loss)
|
(94,996 | ) | (95,197 | ) | (59,514 | ) | (249,667 | ) | ||||||||
Segment
assets
|
566,608
|
567,566
|
354,976
|
1,489,150
|
||||||||||||
Fixed
Assets, net of depreciation
|
218,149
|
218,518
|
136,669
|
573,336
|
NOTE
12-
|
DISSOLUTION
OF WHOLLY OWNED
SUBSIDIARY
|
NOTE
13-
|
CREATION
OF WHOLLY OWNED
SUBSIDIARY
|
·
|
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.
|
·
|
Lack
of dedicated resources to track and keep records of supplier invoices
on a
daily basis;
|
·
|
Lack
of dedicated resources to track and keep records of daily disbursements
against these invoices;
|
·
|
Surplus
accounting entries required to track intercompany expenses, post
spin-off
of our majority-owned subsidiary, Teliphone Corp.;
and
|
·
|
Lack
of a dedicated resource person to oversee daily record
keeping.
|
Item
1.
|
Legal
Proceedings
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Item
3.
|
Defaults
upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
Exhibit |
Number |
Description
of Exhibit
|
31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
United
American Corporation
|
|||
Date:
November
14, 2007
|
By:
|
/s/ George Metrakos | |
George Metrakos | |||
Chief Executive Officer and Director |