[ 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.)
|
218
de la Coulee, Mount St-Hilaire Quebec, Canada, J3H
5Z6
(Address
of principal executive offices)
|
|
514-313-3424
(Issuer’s
telephone number)
|
|
4150
Ste-Catherine Quest, Suite 200, Montreal, Quebec, Canada H3Z
0A1
(Former
name, former address and former fiscal year, if changed since last
report)
|
Page
|
||
Item
1.
|
Financial
Statements
|
1
|
Item
2.
|
Management’s
Discussion and Analysis
|
23
|
Item
3.
|
Controls
and Procedures
|
28
|
Item
1.
|
Legal
Proceedings
|
29
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
30
|
Item
3.
|
Defaults
Upon Senior Securities
|
30
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
30
|
Item
5.
|
Other
Information
|
30
|
Item
6.
|
Exhibits
|
30
|
Page
|
|
Our
unaudited condensed consolidated financial statements included in this
Form 10-QSB are as follows:
|
|
Unaudited
Condensed Consolidated Balance Sheet as of March 31, 2008
|
2 |
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive Income
(Loss) for the nine months and three months ended March 31, 2008 and
2007;
|
3 |
Unaudited
Condensed Consolidated Statements of Cash Flows for the nine months ended
March 31, 2008 and 2007;
|
4 |
Notes
to Unaudited Condensed Consolidated Financial Statements;
|
5 |
ASSETS
|
||||
(IN US$)
|
||||
Current
Assets:
|
||||
Cash
and cash equivalents
|
$ | 2,119 | ||
Accounts
receivable, net
|
1,851,850 | |||
Prepaid
expenses and other current assets
|
14,180 | |||
Loan
receivable - Teliphone Corp.
|
300,000 | |||
Loan
receivable
|
857,016 | |||
Loan
receivable - related company
|
192,476 | |||
Total
Current Assets
|
3,217,641 | |||
Fixed
assets, net of depreciation
|
223,215 | |||
TOTAL
ASSETS
|
$ | 3,440,856 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
|
||||
LIABILITIES
|
||||
Current
Liabilities:
|
||||
Loans
payable - related parties
|
$ | 94,354 | ||
Other
payables
|
636,631 | |||
Convertible
debentures
|
90,961 | |||
Derivative
liability
|
18,885 | |||
Accounts
payable and accrued expenses
|
1,865,082 | |||
Total
Current Liabilities
|
2,705,913 | |||
Total
Liabilities
|
2,705,913 | |||
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
|
5,288,832 | |||
Accumulated
deficit
|
(4,683,891 | ) | ||
Accumulated
other comprehensive income (loss)
|
78,922 | |||
Total
Stockholders' Equity (Deficit)
|
734,943 | |||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 3,440,856 |
IN
US$
|
||||||||
2008
|
2007
|
|||||||
OPERATING
REVENUES
|
||||||||
Sales
|
$ | 2,720,272 | $ | 5,483,752 | ||||
COST
OF SALES
|
||||||||
Inventory,
beginning of period
|
- | |||||||
Purchases
|
2,478,590 | 4,555,235 | ||||||
Inventory,
end of period
|
- | - | ||||||
Total
Cost of Sales
|
2,478,590 | 4,555,235 | ||||||
GROSS
PROFIT
|
241,682 | 928,517 | ||||||
OPERATING
EXPENSES
|
||||||||
Selling
and promotion
|
3,876 | 72,811 | ||||||
Research and development
|
- | |||||||
Professional
and consulting fees
|
87,989 | 122,515 | ||||||
Commissions
and wages
|
13,275 | 595,565 | ||||||
Other
general and administrative expenses
|
3,645 | 8,814 | ||||||
Depreciation,
amortization and impairment
|
58,034 | 58,446 | ||||||
Total
Operating Expenses
|
166,819 | 858,151 | ||||||
GAIN
(LOSS) BEFORE OTHER INCOME
|
74,863 | 70,366 | ||||||
OTHER
INCOME (EXPENSE)
|
||||||||
Gain
(loss) on derivative liability
|
- | - | ||||||
Interest
Income
|
||||||||
Interest
expense
|
(8,982 | ) | (39,694 | ) | ||||
Total
Other Income (Expense)
|
(8,982 | ) | (39,694 | ) | ||||
NET
INCOME (LOSS) BEFORE PROVISION FOR
|
||||||||
INCOME
TAXES AND MINORITY INTEREST
|
65,881 | 30,672 | ||||||
Minority
interest
|
- | - | ||||||
NET
INCOME (LOSS) BEFORE PROVISION
|
||||||||
FOR
INCOME TAXES
|
65,881 | 30,672 | ||||||
Provision
for Income Taxes
|
- | - | ||||||
NET
INCOME (LOSS) APPLICABLE
|
||||||||
TO
COMMON SHARES
|
$ | 65,881 | $ | 30,672 | ||||
NET
INCOME (LOSS) PER BASIC AND DILUTED SHARES
|
||||||||
BASIC
|
$ | 0.00 | $ | 0.00 | ||||
FULLY
DILUTED
|
$ | 0.00 | 0.00 | |||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||
SHARES
OUTSTANDING - BASIC
|
51,079,985 | 51,079,985 | ||||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||
SHARES
OUTSTANDING - FULLY DILUTED
|
52,508,556 | 52,508,556 | ||||||
COMPREHENSIVE
INCOME (LOSS)
|
||||||||
Net
income (loss)
|
$ | 65,881 | $ | 30,672 | ||||
Other
comprehensive income (loss)
|
||||||||
Currency
translation adjustments
|
3,553 | (4,721 | ) | |||||
Comprehensive
income (loss)
|
$ | 69,434 | $ | 25,951 |
IN
US$
|
||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
income (loss)
|
$ | 69,434 | $ | 30,672 | ||||
Adjustments
to reconcile net income (loss) to net cash
|
||||||||
provided
by (used in) operating activities:
|
||||||||
Depreciation,
amortization and impairment
|
58,034 | 58,446 | ||||||
Shares
issued for services
|
- | - | ||||||
Additional
paid in capital
|
- | - | ||||||
Comprehensive
income (loss)
|
1 | - | ||||||
Gain
on derivative liability
|
- | - | ||||||
Changes
in assets and liabilities
|
||||||||
(Increase)
decrease in accounts receivable
|
242,348 | 755,361 | ||||||
Decrease
in investment tax credits
|
(2,883 | ) | - | |||||
Decrease
in interest receivable
|
- | (9,000 | ) | |||||
Decrease
in inventory
|
- | - | ||||||
(Increase)
decrease in prepaid expenses and other current assets
|
190 | 14,215 | ||||||
Increase
in deferred revenue
|
- | - | ||||||
(Decrease)
in accounts payable and
|
||||||||
and
accrued expenses
|
(674,666 | ) | (363,530 | ) | ||||
Total
adjustments
|
(376,976 | ) | 455,492 | |||||
Net
cash provided by (used in) operating activities
|
(307,542 | ) | 486,164 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Acquisitions
of fixed assets
|
(7,992 | ) | (59,931 | ) | ||||
(Increase)
decrease in loan receivable - related company
|
9,948 | (9,217 | ) | |||||
Net
cashprovided by (used in) investing activities
|
1,956 | (69,148 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITES
|
||||||||
(Decrease)
in bank overdraft
|
- | - | ||||||
Proceeds
from loan payable, net of repayments
|
- | - | ||||||
Proceeds
from loan payable - related parties, net of repayments
|
(3,351 | ) | (95,927 | ) | ||||
Net
cash provided by (used in) financing activities
|
(3,351 | ) | (95,927 | ) | ||||
Effect
of foreign currency
|
- | (9,464 | ) | |||||
NET
INCREASE (DECREASE) IN
|
||||||||
CASH
AND CASH EQUIVALENTS
|
(308,937 | ) | 311,625 | |||||
CASH
AND CASH EQUIVALENTS -
|
||||||||
BEGINNING
OF YEAR
|
311,056 | 69,553 | ||||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ | 2,119 | $ | 381,178 | ||||
CASH
PAID DURING THE PERIOD FOR:
|
||||||||
Interest
expense
|
$ | 8,982 | $ | 39,694 |
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
|
March
31,
|
March
31,
|
|||||||
2008
|
2007
|
|||||||
Net
income (loss)
|
$ | 65,881 | $ | 30,672 | ||||
Weighted-average
common shares
|
||||||||
Outstanding
(Basic)
|
51,079,985 | 51,079,985 | ||||||
Weighted-average
common stock
|
||||||||
Equivalents
|
||||||||
Convertible
debentures
|
1,818,181 | 1,428,571 | ||||||
Stock
options
|
- | - | ||||||
Warrants
|
- | - | ||||||
Weighted-average
common shares
|
||||||||
Outstanding
(Diluted)
|
52,898,166 | 52,508,556 |
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
|
(972,492 | ) | ||||||
Fixed
assets, net
|
$ | 223,215 |
|
There
was $58,034 and $58,446 depreciation charged to operations for the three
months ended March 31, 2008 and 2007,
respectively.
|
NOTE
4-
|
RELATED PARTY LOANS
AND TRANSACTIONS
|
NOTE
5-
|
CONVERTIBLE
DEBENTURES
|
NOTE
6-
|
COMMITMENTS
|
Year
Ending
|
||||
December
31,
|
||||
2008
|
31,655 | |||
2009
|
23,229 | |||
Total
|
$ | 54,884 |
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
9-
|
SEGMENT
INFORMATION
|
Wholesale
|
Wholesale
|
|||||||||||||||
Services
|
Services
|
|||||||||||||||
Corporate
|
Brokered
|
Direct
|
Total
|
|||||||||||||
Sales
|
- | $ | 2,720,272 | - | $ | 2,720,272 | ||||||||||
Cost
of sales
|
- | 2,478,590 | - | 2,478,590 | ||||||||||||
Gross
profit
|
- | 241,682 | - | 241,682 | ||||||||||||
Operating
expenses
|
100,091 | 66,728 | - | 166,819 | ||||||||||||
Depreciation,
amortization and impairment
|
44,791 | 13,243 | - | 58,034 | ||||||||||||
Interest
(net) and other
|
(8,982 | ) | - | - | (8,982 | ) | ||||||||||
Net
income (loss)
|
(87,108 | ) | 152,989 | - | 65,881 | |||||||||||
Segment
assets
|
500,167 | 2,717,474 | - | 3,217,641 | ||||||||||||
Fixed
Assets, net of depreciation
|
72,121 | 151,094 | - | 223,215 |
Wholesale
|
Wholesale
|
|||||||||||||||
Services
|
Services
|
|||||||||||||||
Corporate
|
Brokered
|
Direct
|
Total
|
|||||||||||||
Sales
|
$ | - | $ | 4,690,914 | $ | 792,838 | $ | 5,483,752 | ||||||||
Cost
of sales
|
- | 3,997,613 | 557,622 | 4,555,235 | ||||||||||||
Gross
profit
|
- | 693,301 | 235,216 | 928,517 | ||||||||||||
Operating
expenses
|
53,002 | 635,236 | 111,467 | 799,705 | ||||||||||||
Depreciation,
amortization and impairment
|
44,610 | 13,836 | - | 58,446 | ||||||||||||
Interest
(net)
|
- | (16,822 | ) | (22,872 | ) | (39,694 | ) | |||||||||
Net
income (loss)
|
(97,612 | ) | 27,407 | 100,877 | 30,672 | |||||||||||
Segment
assets
|
273,071 | 1,282,269 | 372,364 | 1,927,704 | ||||||||||||
Fixed
Assets, net of depreciation
|
248,490 | 174,474 | - | 422,964 |
NOTE
9-
|
SEGMENT
INFORMATION (CONTINUED)
|
North,
Central
|
Europe,
Middle
|
|||||||||||||||
and
South
|
East
and
|
|||||||||||||||
America
|
Africa
|
Asia
|
Total
|
|||||||||||||
Sales
|
$ | 633,994 | $ | 1,878,601 | $ | 207,677 | $ | 2,720,272 | ||||||||
Cost
of sales
|
$ | 577,667 | $ | 1,711,697 | $ | 189,226 | 2,478,590 | |||||||||
Gross
profit (loss)
|
$ | 56,327 | $ | 166,904 | $ | 18,451 | 241,682 | |||||||||
Operating
expenses
|
$ | 38,879 | $ | 115,204 | $ | 12,736 | 166,819 | |||||||||
Depreciation,
amortization and impairment
|
$ | 13,526 | $ | 40,078 | $ | 4,431 | 58,034 | |||||||||
Interest
(net) and other
|
$ | (2,093 | ) | $ | (6,203 | ) | $ | (686 | ) | (8,982 | ) | |||||
Net
income (loss)
|
$ | 15,354 | $ | 45,497 | $ | 5,030 | 65,881 | |||||||||
Segment
assets
|
$ | 749,912 | $ | 2,222,080 | $ | 245,648 | 3,217,641 | |||||||||
Fixed
Assets, net of depreciation
|
$ | 52,023 | $ | 154,151 | $ | 17,041 | 223,215 |
North,
Central
|
Europe,
Middle
|
|||||||||||||||
and
South
|
East
and
|
|||||||||||||||
America
|
Africa
|
Asia
|
Total
|
|||||||||||||
Sales
|
$ | 1,376,899 | $ | 3,918,251 | $ | 188,602 | $ | 5,483,752 | ||||||||
Cost
of sales
|
1,144,684 | 3,253,757 | 156,794 | 4,555,235 | ||||||||||||
Gross
profit (loss)
|
232,215 | 664,494 | 31,808 | 928,517 | ||||||||||||
Operating
expenses
|
199,805 | 572,532 | 27,368 | 799,705 | ||||||||||||
Depreciation,
amortization and impairment
|
14,675 | 41,761 | 2,010 | 58,446 | ||||||||||||
Interest
(net)
|
(9,967 | ) | (28,362 | ) | (1,365 | ) | (39,694 | ) | ||||||||
Net
income (loss)
|
7,768 | 21,839 | 1,065 | 30,672 | ||||||||||||
Segment
assets
|
484,022 | 1,377,383 | 66,299 | 1,927,704 | ||||||||||||
Fixed
Assets, net of depreciation
|
106,201 | 302,216 | 14,547 | 422,964 |
NOTE
10-
|
DISSOLUTION OF WHOLLY
OWNED SUBSIDIARY
|
NOTE
11-
|
CREATION OF WHOLLY
OWNED SUBSIDIARY
|
NOTE
12-
|
SUBSEQUENT
EVENTS
|
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.
|
•
|
Interactive
information
|
•
|
Content
portability
|
•
|
Video
clips on-demand
|
•
|
Video
calling/conferencing
|
•
|
Video
messaging
|
•
|
Network-based
time & place shifting
|
•
|
Peer-to-Peer
Video
|
•
|
Home
automation
|
•
|
On-line
dating
|
•
|
Personalized
advertising
|
•
|
Wireless/Wireline
Integration
|
•
|
Standard
Def. Television (SDTV)
|
•
|
High
Def. Television (HDTV)
|
•
|
Video-on-Demand
(VOD)
|
•
|
Interactive
program guide
|
•
|
Web
browsing on TV
|
•
|
Music
channels
|
•
|
Local
programming
|
•
|
Voice
services
|
•
|
Emergency
services
|
•
|
Information
services
|
•
|
Personal
Video Recorder (PVR)
|
•
|
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
|
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:
May 15, 2008
|
By:
|
/s/ Benoit
Laliberté
|
|
Benoit
Laliberté
Chief
Executive Officer and Director
|