[X]
|
Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the quarterly period ended March
31, 2007
|
|
[
]
|
Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934
|
For
the transition period __________
to __________
|
|
Commission
File Number: 000-27621
|
Florida
|
95-4720231
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(IRS
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
|
||
PART
I - FINANCIAL INFORMATION
|
||
PART
II - OTHER INFORMATION
|
||
Our
unaudited condensed consolidated financial statements included
in this
Form 10-QSB are as follows:
|
|
|
|
|
|
|
|
|
|
ASSETS
|
||
(IN
US$)
|
||
Current
Assets:
|
||
Cash
and cash equivalents
|
$
|
381,178
|
Accounts
receivable, net
|
657,978
|
|
Interest
receivable
|
24,000
|
|
Prepaid
expenses and other current assets
|
11,610
|
|
Loan
receivable - related company
|
429,975
|
|
Total
Current Assets
|
1,504,741
|
|
Fixed
assets, net of depreciation
|
422,964
|
|
TOTAL
ASSETS
|
$
|
1,927,704
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||
LIABILITIES
|
||
Current
Liabilities:
|
||
Loans
payable - related parties
|
$
|
419,081
|
Other
payables
|
636,631
|
|
Convertible
debentures
|
90,961
|
|
Derivative
liability
|
27,688
|
|
Accounts
payable and accrued expenses
|
1,494,675
|
|
Total
Current Liabilities
|
2,669,036
|
|
Total
Liabilities
|
2,669,036
|
|
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
|
(5,723,704)
|
|
Accumulated
other comprehensive income (loss)
|
65,399
|
|
Total
Stockholders' Equity (Deficit)
|
(741,332)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
1,927,704
|
IN
US$
2007
|
2006
|
||||
OPERATING
REVENUES
|
|||||
Sales
|
$
|
5,483,752
|
$
|
2,463,170
|
|
COST
OF SALES
|
|||||
Inventory,
beginning of period
|
-
|
51,652
|
|||
Purchases
|
4,555,235
|
2,293,893
|
|||
Inventory,
end of period
|
-
|
(20,014)
|
|||
Total
Cost of Sales
|
4,555,235
|
2,325,531
|
|||
GROSS
PROFIT
|
928,517
|
137,639
|
|||
OPERATING
EXPENSES
|
|||||
Selling
and promotion
|
72,811
|
26,988
|
|||
Professional
and consulting fees
|
122,515
|
70,836
|
|||
Commissions
and wages
|
595,565
|
255,584
|
|||
Other
general and administrative expenses
|
8,814
|
37,529
|
|||
Depreciation,
amortization and impairment
|
58,446
|
56,745
|
|||
Total
Operating Expenses
|
858,151
|
447,682
|
|||
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
70,366
|
(310,043)
|
|||
OTHER
INCOME (EXPENSE)
|
|||||
Interest
expense
|
(39,694)
|
|
(4,266)
|
||
Total
Other Income (Expense)
|
(39,694)
|
|
(4,266)
|
||
|
|||||
NET
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST
|
30,672
|
(314,309)
|
|||
Minority
interest
|
-
|
27,828
|
|||
NET
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES
|
30,672
|
(286,481)
|
|||
Provision
for Income Taxes
|
-
|
-
|
|||
NET
INCOME (LOSS) APPLICABLE TO
COMMON SHARES
|
$
|
30,672
|
$
|
(286,481)
|
|
NET
INCOME (LOSS) PER BASIC AND DILUTED SHARES
|
|||||
BASIC
|
$
|
0.00
|
$
|
(0.01)
|
|
FULLY
DILUTED
|
$
|
0.00
|
(0.01)
|
||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC
|
51,079,985
|
49,969,985
|
|||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - FULLY DILUTED
|
52,508,556
|
49,969,985
|
|||
COMPREHENSIVE
INCOME (LOSS)
|
|||||
Net
income (loss)
|
$
|
30,672
|
$
|
(286,481)
|
|
Other
comprehensive income (loss)
|
|||||
Currency
translation adjustments
|
(4,721)
|
|
6,474
|
||
Comprehensive
income (loss)
|
$
|
25,951
|
$
|
(280,007)
|
IN
US$
2007
|
2006
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||
Net
income (loss)
|
$
|
30,672
|
$
|
(286,481)
|
|
Adjustments
to reconcile net income (loss) to net cash
provided
by (used in) operating
activities:
|
|||||
Depreciation,
amortization and impairment
|
58,446
|
56,745
|
|||
Changes
in assets and liabilities
|
|||||
Decrease
in accounts receivable
|
755,361
|
60,878
|
|||
Decrease
in investment tax credits
|
-
|
73
|
|||
Decrease
in interest receivable
|
(9,000)
|
|
-
|
||
Decrease
in inventory
|
-
|
31,638
|
|||
Decrease
in prepaid expenses and other current assets
|
14,215
|
6,240
|
|||
(Decrease)
in accounts payable and accrued expenses
|
(363,530)
|
|
(9,455)
|
||
Total
adjustments
|
455,492
|
146,119
|
|||
Net
cash provided by (used in) operating activities
|
486,164
|
(140,362)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||
Acquisitions
of fixed assets
|
(59,931)
|
|
(7,245)
|
||
(Increase)
in loan receivable - related company
|
(9,217)
|
|
-
|
||
Net
cash (used in) investing activities
|
(69,148)
|
|
(7,245)
|
||
CASH
FLOWS FROM FINANCING ACTIVITES
|
|||||
(Decrease)
in bank overdraft
|
-
|
(1,525)
|
|||
Proceeds
from loan payable, net of repayments
|
-
|
74
|
|||
Proceeds
from loan payable - related parties, net of repayments
|
(95,927)
|
|
142,584
|
||
Net
cash provided by (used in) financing activities
|
(95,927)
|
|
141,133
|
||
Effect
of foreign currency
|
(9,464)
|
|
6,474
|
||
NET
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
|
311,625
|
-
|
|||
CASH
AND CASH EQUIVALENTS - BEGINNING
OF YEAR
|
69,553
|
-
|
|||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
381,178
|
$
|
-
|
|
CASH
PAID DURING THE PERIOD FOR:
|
|||||
Interest
expense
|
$
|
39,694
|
$
|
3,000
|
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) |
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
March
31,
2007
|
March
31,
2006
|
||||
Net
income (loss)
|
$
|
30,672
|
$
|
(286,481)
|
|
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
|
$
|
1,137,971
|
||
Less:
accumulated depreciation
|
($715,007)
|
||||
Fixed
assets, net
|
$
|
422,964
|
NOTE 4- | RELATED PARTY LOANS AND TRANSACTIONS |
NOTE 5- | LOANS PAYABLE - NON-RELATED PARTIES |
NOTE 6- | CONVERTIBLE DEBENTURES |
NOTE 7- | COMMITMENTS |
Year
Ending December
31,
|
||
2007 (9 months) | $ | 24,172 |
2008 | 31,655 | |
2009 | 23,229 | |
Total | $ | 79,056 |
NOTE 8- | STOCKHOLDERS’ EQUITY (DEFICIT) |
NOTE 9- | PROVISION FOR INCOME TAXES |
Net
operating losses
|
$
|
1,734,000
|
Valuation
allowance
|
(1,734,000)
|
|
$ | - |
NOTE 9- | PROVISION FOR INCOME TAXES (CONTINUED) |
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 |
Corporate
|
Wholesale
Services
Brokered
|
Wholesale
Services
Direct
|
Connection
Services
|
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
|
Corporate
|
Wholesale
Services
Brokered
|
Wholesale
Services
Brokered
|
Connection
Services
|
Total
|
||||||||||
Sales
|
$
|
-
|
$
|
-
|
$
|
2,355,452
|
$
|
107,718
|
$
|
2,463,170
|
||||
Cost
of sales
|
-
|
-
|
2,220,013
|
105,518
|
2,325,531
|
|||||||||
Gross
profit (loss)
|
-
|
-
|
135,439
|
2,200
|
137,639
|
|||||||||
Operating
expenses
|
25,368
|
-
|
260,970
|
104,599
|
390,937
|
|||||||||
Depreciation,
amortization and impairment
|
44,610
|
-
|
3,480
|
8,655
|
56,745
|
|||||||||
Interest
(net)
|
(3,000)
|
|
-
|
(1,010)
|
|
(256)
|
|
(4,266)
|
||||||
Net
income (loss)
|
(72,978)
|
|
-
|
(130,021)
|
|
(111,310)
|
|
(314,309)
|
||||||
Segment
assets
|
401,490
|
-
|
136,551
|
242,269
|
780,310
|
|||||||||
Fixed
Assets, net of depreciation
|
401,490
|
-
|
42,942
|
146,149
|
590,601
|
NOTE 11- | SEGMENT INFORMATION (CONTINUED) |
North,
Central
and
South
America
|
Europe,
Middle
East
and
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
|
North,
Central
and
South
America
|
Europe,
Middle
East
and Africa
|
Asia
|
Total
|
||||||||
Sales
|
$
|
2,463,170
|
-
|
-
|
$
|
2,463,170
|
|||||
Cost
of sales
|
2,325,531
|
-
|
2,325,531
|
||||||||
Gross
profit (loss)
|
137,639
|
-
|
-
|
137,639
|
|||||||
Operating
expenses
|
390,937
|
-
|
-
|
390,937
|
|||||||
Depreciation,
amortization and impairment
|
56,745
|
-
|
-
|
56,745
|
|||||||
Interest
(net)
|
(4,266)
|
|
-
|
-
|
(4,266)
|
||||||
Net
income (loss)
|
(314,309)
|
|
-
|
-
|
(314,309)
|
||||||
Segment
assets
|
780,310
|
-
|
-
|
780,310
|
|||||||
Fixed
Assets, net of depreciation
|
590,601
|
-
|
-
|
590,601
|
·
|
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.
|
Exhibit
Number
|
Description
of Exhibit
|
United
American Corporation
|
|
Date:
|
May
21, 2007
|
By: /s/
Simon Lamarche
Simon
Lamarche
Title: Chief
Executive Officer and
Director
|