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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2008
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number: 01-11638
UNITED AMERICAN HEALTHCARE CORPORATION
(Exact Name of Registrant as Specified in Charter)
MICHIGAN 38-2526913
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
300 RIVER PLACE, SUITE 4950
DETROIT, MICHIGAN 48207
(Address of principal executive offices) (Zip Code)
None
(Former name, former address and former fiscal year, if changed since
last report)
Registrant's telephone number, including area code: (313) 393-4571
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X].
THE NUMBER OF OUTSTANDING SHARES OF REGISTRANT'S COMMON STOCK AS OF JANUARY 30,
2009 IS 8,689,054.
As filed with the Securities and Exchange Commission on February 5, 2009.
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UNITED AMERICAN HEALTHCARE CORPORATION
FORM 10-Q
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets - December 31, 2008
and June 30, 2008........................................... 2
Condensed Consolidated Statements of Operations - Three months
and six months ended December 31, 2008 and 2007............. 3
Condensed Consolidated Statements of Cash Flows -Six months
ended December 31, 2008 and 2007............................ 4
Notes to the Unaudited Condensed Consolidated Financial
Statements.................................................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 15
Item 3. Quantitative and Qualitative Disclosures
about Market Risk........................................... 21
Item 4. Controls and Procedures........................................ 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 22
Item 6. Exhibits....................................................... 22
SIGNATURES................................................................ 23
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, JUNE 30,
2008 2008
------------ --------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 6,025 $10,713
Marketable securities 10,624 8,774
Accounts receivable - State of Tennessee, net 1,900 1,093
Interest receivable 282 551
Other receivables 318 374
Prepaid expenses and other 310 299
------- -------
Total current assets 19,459 21,804
Property and equipment, net 211 472
Marketable securities 7,618 7,514
Restricted assets 421 421
Other assets 586 586
------- -------
Total assets $28,295 $30,797
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Medical claims payable $ 2,060 $ 2,563
Accounts payable and accrued expenses 1,353 1,726
Accrued compensation and related benefits 525 896
Accrued rent 117 90
Other current liabilities 858 1,183
------- -------
Total current liabilities 4,913 6,458
------- -------
Total liabilities 4,913 6,458
Commitments and contingencies
Shareholders' equity
Preferred stock, 5,000,000 shares authorized; none issued
Common stock, no par, 15,000,000 shares authorized; 8,689,520 and
8,734,214 issued and outstanding at December 31, 2008 and June
30, 2008, respectively 18,499 18,558
Paid in capital - stock options 1,334 1,153
Warrants 444 444
Retained earnings 3,087 4,261
Accumulated other comprehensive income (loss), net of deferred federal
income taxes 18 (77)
------- -------
Total shareholders' equity 23,382 24,339
======= =======
Total liabilities and shareholders' equity $28,295 $30,797
======= =======
See accompanying Notes to the Unaudited Condensed Consolidated Financial
Statements.
2
UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ -----------------
2008 2007 2008 2007
-------- ------- ------- -------
REVENUES
Fixed administrative fees $ 1,173 $3,677 $ 4,596 $ 7,383
Variable administrative fees 944 280 944 280
Medical premiums 2,395 2,707 5,257 4,789
Interest and other income 274 384 482 784
------- ------ ------- -------
Total revenues 4,786 7,048 11,279 13,236
EXPENSES
Medical expenses 2,267 2,551 4,790 4,415
Marketing, general and administrative 3,692 4,089 7,331 8,280
Depreciation and amortization 56 51 117 91
Loss on disposal of fixed assets 135 -- 135 --
------- ------ ------- -------
Total expenses 6,150 6,691 12,373 12,786
------- ------ ------- -------
Earnings (loss) from operations before income taxes (1,364) 357 (1,094) 450
Income tax expense -- 101 80 121
------- ------ ------- -------
NET EARNINGS (LOSS) $(1,364) $ 256 $(1,174) $ 329
======= ====== ======= =======
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC
Net earnings (loss) per common share $ (0.16) $ 0.03 $ (0.13) $ 0.04
======= ====== ======= =======
Weighted average shares outstanding 8,728 8,612 8,731 8,636
======= ====== ======= =======
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Net earnings (loss) per common share $ (0.16) $ 0.03 $ (0.13) $ 0.04
======= ====== ======= =======
Weighted average shares outstanding 8,728 8,778 8,731 8,797
======= ====== ======= =======
See accompanying Notes to the Unaudited Condensed Consolidated
Financial Statements.
3
UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
SIX MONTHS ENDED
DECEMBER 31,
-------------------
2008 2007
-------- --------
OPERATING ACTIVITIES
Net earnings (loss) $ (1,174) $ 329
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation 117 91
Loss on disposal of fixed assets 135 --
Stock compensation 181 403
Deferred income taxes -- 72
Change in restricted assets -- 2,300
Net changes in other operating assets and liabilities (2,038) (516)
-------- -------
Net cash provided by (used in) operating activities (2,779) 2,679
INVESTING ACTIVITIES
Proceeds from maturity of marketable securities 16,412 3,482
Purchase of marketable securities (18,271) (4,857)
Purchase of property and equipment (3) (185)
Proceeds from sale of property and equipment 12 --
-------- -------
Net cash used in investing activities (1,850) (1,560)
FINANCING ACTIVITIES
Proceeds from exercise of stock options -- 123
Purchase of treasury stock (59) --
-------- -------
Net cash provided by (used in) financing activities (59) 123
-------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,688) 1,242
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,713 8,932
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,025 $10,174
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 128 $ 20
Unrealized gain on investments 95 93
======== =======
See accompanying Notes to the Unaudited Condensed Consolidated Financial
Statements.
4
UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE 1 - BASIS OF PREPARATION
The accompanying unaudited condensed consolidated financial statements include
the accounts of United American Healthcare Corporation and its wholly and
majority-owned subsidiaries, together referred to as the "Company." All
significant intercompany transactions and balances have been eliminated in
consolidation.
The accompanying unaudited condensed consolidated financial statements of the
Company have been prepared in conformity with accounting principles generally
accepted in the United States of America (GAAP) and with the instructions for
Form 10-Q and Rule 10-01 of Regulation S-X as they apply to interim financial
information. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the financial
position and results of operations have been included. The results of operations
for the three-month period ended December 31, 2008 are not necessarily
indicative of the results of operations for the full fiscal year ending June 30,
2009. The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the notes to the financial statements
contained in the Company's most recent annual report on Form 10-K.
NOTE 2 - COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income (loss), net of related tax, are
summarized as follows (in thousands):
Three months ended Six months ended
December 31, December 31,
------------------ ----------------
2008 2007 2008 2007
------- -------- ------- ------
Net earnings (loss) $(1,364) $256 $(1,174) $329
Unrealized holding gains, net of deferred
federal income taxes 63 27 95 93
------- ---- ------- ----
Comprehensive income (loss) $(1,301) $283 $(1,079) $422
======= ==== ======= ====
5
The components of accumulated other comprehensive income (loss), included in
shareholders' equity at December 31, 2008 and June 30, 2008, include net
unrealized holding gains and losses, net of deferred federal income taxes.
NOTE 3 - NET EARNINGS (LOSS) PER COMMON SHARE
Basic net earnings (loss) per share excluding dilution have been computed by
dividing net earnings by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share are computed using the
treasury stock method for outstanding stock options and warrants. For the three
and six months ended December 31, 2008, the Company incurred a net loss.
Accordingly, the anti-dilutive impact of the effect of stock options and
warrants is not shown.
NOTE 4 - INCOME TAXES
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes," requires that companies assess whether valuation allowances
against their deferred tax assets are adequate based on the consideration of all
available evidence.
The Company's effective tax rate for the six months ended December 31, 2008 is
(7%) and differs from the statutory rate of 34%. This difference is primarily
related to the change in the deferred tax valuation allowance and state income
taxes.
In July 2006, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes" -
an interpretation of SFAS No. 109 which clarifies the accounting for uncertainty
in tax positions. This interpretation requires that the Company recognize in the
financial statements the impact of a tax position if that position is more
likely than not of being sustained on audit, based on the technical merits of
the position. The provisions of FIN 48 are effective as of the beginning of the
Company's 2008 fiscal year, with the cumulative effect of the change in
accounting principle recorded as an adjustment to opening retained earnings. The
Company adopted FIN 48 effective July 1, 2007. There was no adjustment required
to retained earnings as the Company was not aware of any material tax position
taken or expected to be taken in a tax return in which the tax law is subject to
varied interpretations.
6
NOTE 5 - CONTRACTUAL RISK AGREEMENT
Beginning July 1, 2002, the Company's subsidiary, UAHC Health Plan of Tennessee,
Inc. ("UAHC-TN") was a managed care organization ("MCO") in the TennCare
program, a State of Tennessee program that provided medical benefits to Medicaid
and working uninsured recipients. Initially, TennCare's contracted MCOs,
including UAHC-TN were generally compensated for administrative services only
(commonly called ASO), earned fixed administrative fees and were not at risk for
medical costs. TennCare extended the ASO reimbursement system applicable to
UAHC-TN through several contractual amendments effective through June 30, 2005.
Through an amendment with an effective date of July 1, 2005, TennCare
implemented a modified risk arrangement ("MRA") with all its contracted MCOs,
including UAHC-TN, which thereby were at risk for losing up to 10% of
administrative fee revenue and potentially could receive up to 15% incentive
bonus revenue based on performance relative to benchmarks. For fiscal year 2006,
UAHC-TN earned and received additional revenue of $1.1 million for its
performance under the MRA, representing a 7% bonus revenue payout. For fiscal
year 2007, UAHC-TN earned and received additional revenue of $1.4 million,
representing a 9% bonus revenue payout. For fiscal year 2008, UAHC-TN received
notification from TennCare that it earned additional revenue of $0.9 million for
its performance under the MRA; and the Company has recorded that additional MRA
revenue in the second quarter of fiscal 2009 earnings. Effective July 1, 2007,
the evaluation period for the MRA was changed from quarterly to annually, and
the incentive bonus pool was adjusted up to 20% of administrative fee revenue.
On April 22, 2008, the Company learned that UAHC-TN will cease providing managed
care services as a TennCare contractor when its present TennCare contract
expires. UAHC-TN's TennCare members transferred to other managed care
organizations on November 1, 2008, after which UAHC-TN continues to perform its
remaining contractual obligations through its TennCare contract expiration date
of June 30, 2009. However, revenue under this contract was only earned through
October 31, 2008. Revenue under this contract represented 50% and 57% of the
Company's total revenues for the six months ended December 31, 2008 and 2007,
respectively. The net loss related to this contract discontinuance is estimated
to range between $4.6 million and $6.6 million, which includes claim processing
costs, employee severance, and other corporate general administrative expenses
beginning November 2008 through June 2009. During the fiscal 2009 second
quarter, the Company incurred approximately $1.4 million of such estimated
costs. The Company has subleased its leased Tennessee facility to a third party
effective beginning April 2009 and ending December 31, 2010. The Company
recorded a liability of $0.1 million related to the remaining lease obligation.
As a result of the impending contract termination, the Company also sold fixed
assets and recognized a loss on disposal of $0.1 million. Management believes
that the discontinuance of the TennCare contract will have a material impact on
the Company's operations.
As a result of the contract expiration as discussed above, the Company's
deferred tax valuation allowance was increased during fiscal 2008. In the third
quarter of fiscal 2008, the Company
7
recorded deferred tax expense of $1.5 million. Also, management assessed the
previously recorded goodwill of $3.5 million and determined that such amount was
impaired in accordance with SFAS No. 142. As a result, the Company recorded a
goodwill impairment charge of $3.5 million also during the third quarter of
fiscal 2008.
NOTE 6 - STOCK OPTION PLANS
The Company has adopted SFAS No. 123(R), "Share-Based Payment," which is a
revision of SFAS No. 123, "Accounting for Stock Based Compensation," and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees," which
was issued in December 2004. The revisions are intended to provide investors and
other users of financial statements with more complete and neutral financial
information by requiring that the compensation cost relating to share-based
payment transactions be recognized in financial statements. That cost will be
measured based on the fair value of the equity or liability instruments issued.
The Company recorded stock option expense of $0.2 million and $0.4 million for
the six months ended December 31, 2008 and 2007, respectively.
NOTE 7 - RESTRICTED ASSETS
Under two escrow agreements between the Company and TennCare on August 5, 2005
the Company funded two escrow accounts held by TennCare at the State Treasury.
Both escrow agreements recited that TennCare did not assert there had been any
breach of UAHC-TN's TennCare contract and that the Company funded the escrow
accounts as a show of goodwill and good faith in working with TennCare.
The larger escrow account, which has expired, was in the original amount of
$2,300,000 and was security for repayment to TennCare of any overpayments to
UAHC-TN that might be determined by an audit of all UAHC-TN process claims since
2002. In August 2007, the Company received $1,289,851 plus accumulated interest
earnings back from that account. In November 2007, the remaining $1,010,149
account balance was paid to TennCare for claims discrepancies found in the
review by the Tennessee Department of Commerce and Insurance.
The other escrow account, in the original amount of $420,500, is security for
any money damages that may be awarded to TennCare in the event of any future
litigation between the parties in connection with certain pending investigations
by state and federal authorities. The escrow account will terminate 30 days
after the conclusion of such investigations, unless the parties earlier agree
otherwise. The escrow account bears interest at a rate no lower than the
prevailing commercial interest rate for savings accounts at financial
institutions in Nashville, Tennessee. All amounts (including interest earnings)
credited to the escrow account will belong to the Company, except to the extent,
if any, they are paid to TennCare to satisfy amounts determined to be owed to
TennCare as provided in the escrow agreement.
8
NOTE 8 - MEDICARE CONTRACT
On October 10, 2006, UAHC-TN entered into a contract with the Centers for
Medicare & Medicaid Services (CMS) to act as a Medicare Advantage qualified
organization. The contract authorizes UAHC-TN to serve members enrolled in both
the Tennessee Medicaid and Medicare programs, commonly referred to as
"dual-eligibles," specifically to offer a Special Needs Plan to its eligible
members in Shelby County, Tennessee (including the City of Memphis), and to
operate a Voluntary Medicare Prescription Drug Plan, both beginning January 1,
2007. The current contract term is through December 31, 2009. As of January 30,
2009, there were approximately 719 enrollees in UAHC-TN's Medicare Advantage
Special Needs Plan.
NOTE 9 - FAIR VALUE
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). This statement permits
entities to choose to measure many financial instruments and certain other items
at fair value. An entity shall report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. SFAS 159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. The Company adopted the
provisions of SFAS 159 on July 1, 2008.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157'). SFAS 157 enhances existing guidance for measuring assets and
liabilities using fair value. SFAS 157 provides a single definition of fair
value, together with a framework for measuring it, and requires additional
disclosure about the use of fair value to measure assets and liabilities. SFAS
157 also emphasizes that fair value is a market-based measurement, not an
entity-specific measurement, and sets out a fair value hierarchy with the
highest priority being quoted prices in active markets. Under SFAS 157, fair
value measurements are disclosed by level within that hierarchy. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. The Company
adopted the provisions of SFAS 157 related to financial assets and financial
liabilities on July 1, 2008. In February 2008, the FASB issued FASB Staff
Position No. 157-2, "Effective Date of SFAS 157" ("FSP 157-2"), which delays the
effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities.
Therefore, the Company has delayed application of SFAS 157 to its nonfinancial
assets and nonfinancial liabilities, which include assets and liabilities
acquired in connection with a business combination, goodwill, intangible assets
and asset retirement obligations, until July 1, 2009.
Hierarchical levels, defined by SFAS No. 157 and directly related to the amount
of subjectivity associated with the inputs to fair valuation of these assets and
liabilities, are as follows:
9
Level 1 -- Inputs were unadjusted, quoted prices in active markets for
identical assets or liabilities at the measurement date.
Level 2 -- Inputs (other than quoted prices included in Level 1) were
either directly or indirectly observable for the asset or liability through
correlation with market data at the measurement date and for the duration
of the instrument's anticipated life.
Level 3 -- Inputs reflected management's best estimate of what market
participants would use in pricing the asset or liability at the measurement
date. Consideration was given to the risk inherent in the valuation
technique and the risk inherent in the inputs to the model.
Determining which hierarchical level an asset or liability falls within requires
significant judgment. The Company will evaluate its hierarchy disclosures each
quarter. The following table summarizes the financial instruments measured at
fair value in the Condensed Consolidated Balance Sheet as of December 31, 2008:
FAIR VALUE MEASUREMENTS
-------------------------------------
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- ------- ------- -------
Assets
Marketable Securities-short-term $10,624 $-- $-- $10,624
Marketable Securities-long-term $ 7,618 $-- $-- $ 7,618
Liabilities $ -- $-- $-- $ --
The Company classified its marketable securities as available-for-sale which
were reported at fair market value. Unrealized gains and losses, to the extent
such losses are considered temporary in nature, are included in accumulated
other comprehensive income (loss), net of applicable taxes. At such time as the
decline in fair market value and the related unrealized loss is determined to be
a result of impairment of the underlying instrument, the loss is recorded as a
charge to earnings. Fair values for marketable securities are based upon market
prices.
10
NOTE 10 - ACCRUED COMPENSATION AND RELATED BENEFITS
The Company has entered into retention and severance agreements with each of the
Company's named executive officers, William C. Brooks, Stephen D. Harris and
Stephanie Dowell, to incentivize their continued service to the Company. These
agreements were dated and effective as of October 31, 2008, the date on which
the agreements were approved by the Company's Board of Directors. In addition,
the Company entered into severance agreements with other employees. As of
December 31, 2008, the Company had accrued $0.2 million related to such
executive and other employees' agreements. The Company has a potential remaining
liability, excluding severance, of $0.5 million related to retention incentives
with executive officers through November 2010.
NOTE 11 - SHARE REPURCHASE PROGRAM
On November 25, 2008, the Company's board of directors approved a share
repurchase program, authorizing the Company to repurchase up to $1.0 million of
the Company's outstanding common stock. The program allows for the Company's
shares to be purchased in the open market at prevailing prices from time to time
at the discretion of management and in accordance with applicable federal
securities laws. Share repurchases under this program may be made through a
variety of methods, which may include open market purchases, privately
negotiated transactions, block trades, accelerated share repurchase transactions
or otherwise, or by any combination of such methods. The timing of repurchases
and the exact number of shares of common stock to be purchased will depend upon
market conditions and other factors. The repurchase program does not obligate
the Company to repurchase any specific number of shares and may be modified or
discontinued at any time.
As of December 31, 2008, the Company had repurchased a total of 44,694 shares at
fair market value under the share repurchase program.
11
NOTE 12 - UNAUDITED SEGMENT FINANCIAL INFORMATION
Summarized financial information for the Company's principal operations, as of
and for the six-month periods ended December 31, 2008 and 2007, is as follows
(in thousands):
SIX MONTHS ENDED MANAGEMENT HMO & CORPORATE & CONSOLIDATED
DECEMBER 31, 2008 COMPANIES (1) MANAGED PLAN (2) ELIMINATIONS COMPANY
- ---------------------------------------- ------------- ---------------- ------------ ------------
Revenues - external customers $ -- $10,797 $ -- $10,797
Revenues - intersegment 6,487 -- (6,487) --
Interest and other income 186 296 -- 482
------- ------- -------- -------
Total revenues $ 6,673 $11,093 $ (6,487) $11,279
======= ======= ======== =======
Interest expense $ -- $ -- $ -- $ --
Earnings (loss) from operations (705) (469) -- (1,174)
Cash 4,218 1,807 -- 6,025
Marketable securities-available for sale 2,944 7,680 -- 10,624
Segment assets 60,553 19,171 (51,429) 28,295
Purchase of equipment 3 -- -- 3
Depreciation and amortization 117 -- -- 117
SIX MONTHS ENDED
DECEMBER 31, 2007
- ----------------------------------------
Revenues - external customers $ -- $12,452 $ -- $12,452
Revenues - intersegment 7,012 -- (7,012) --
Interest and other income 261 523 -- 784
------- ------- -------- -------
Total revenues $ 7,273 $12,975 $ (7,012) $13,236
======= ======= ======== =======
Interest expense $ -- $ -- $ -- $ --
Earnings (loss) from operations (524) 853 -- 329
Cash 3,686 6,488 -- 10,174
Marketable securities-available for sale 2,806 3,860 -- 6,666
Segment assets 65,449 20,840 (52,293) 33,996
Purchase of equipment 185 -- -- 185
Depreciation and amortization 91 -- -- 91
(1) Management Companies: United American Healthcare Corporation and United
American of Tennessee, Inc.
(2) HMO and Managed Plan: UAHC Health Plan of Tennessee, Inc.
12
NOTE 13 - RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
The following are new accounting standards and interpretations that may be
applicable in the future to the Company:
In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations," and
SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements -
an Amendment of ARB No. 51." SFAS No. 141(R) requires an acquirer to measure the
identifiable assets acquired, the liabilities assumed and any noncontrolling
interest in the acquiree at their fair values on the acquisition date, with
goodwill being the excess value over the net identifiable assets acquired. SFAS
No. 160 clarifies that a noncontrolling interest in a subsidiary should be
reported as equity in the consolidated financial statements. The calculation of
earnings per share will continue to be based on income amounts attributable to
the parent. SFAS No. 160 also requires consolidated net income to be reported at
amounts that include the amounts attributable to both the parent and the
noncontrolling interest. It also requires disclosure, on the face of the
consolidated statement of income, of the amounts of consolidated net income
attributable to the parent and to the noncontrolling interest. SFAS No. 160 also
provides guidance when a subsidiary is deconsolidated and requires expanded
disclosures in the consolidated financial statements that clearly identify and
distinguish between the interests of the parent's owners and the interests of
the noncontrolling owners of a subsidiary. SFAS No. 141(R) and SFAS No. 160 are
effective for financial statements issued for fiscal years beginning after
December 15, 2008. Early adoption is prohibited. The Company has not yet
determined the effect on its consolidated financial statements, if any, upon
adoption of SFAS No. 141(R) or SFAS No. 160.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities" ("SFAS 161"), which amends and expands the
disclosure requirements of SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), with the intent to provide users of
financial statements with an enhanced understanding of: (a) how and why an
entity uses derivative instruments; (b) how derivative instruments and related
hedged items are accounted for under SFAS 133 and its related interpretations;
and (c) how derivative instruments and related hedged items affect an entity's
financial position, financial performance and cash flows. SFAS 161 requires
qualitative disclosures about objectives and strategies for using derivatives,
quantitative disclosures about fair value amounts of and gains and losses on
derivative instruments and disclosures about credit-risk-related contingent
features in derivative instruments. This statement applies to all entities and
all derivative instruments. SFAS 161 is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008.
The Company has not yet determined the effect on its financial statements, if
any, upon adoption of SFAS 161.
In May, 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS 162"). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally
13
accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).
SFAS 162 will be effective 60 days following the SEC's approval of the Public
Company Accounting Oversight Board's amendments to AU Section 411, "The Meaning
of Present Fairly in Conformity With Generally Accepted Accounting Principles."
The FASB has stated that it does not expect SFAS 162 will result in a change in
current practice. SFAS 162 is effective 60 days following the SEC's approval of
the Public Company Accounting Oversight Board amendments to remove the GAAP
hierarchy from the auditing standards. The application of SFAS 162 will have no
effect on the Company's financial position, results of operations or cash flows.
Also in May 2008, the FASB issued SFAS No. 163, "Accounting for Financial
Guarantee Insurance Contracts - an Interpretation of SFAS Statement No. 60"
("SFAS 163"). SFAS 163 interprets Statement No. 60 and amends existing
accounting pronouncements to clarify their application to the financial
guarantee insurance contracts included within the scope of that Statement. SFAS
163 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and all interim periods within those fiscal years. As
such, the Company is required to adopt these provisions at the beginning of the
fiscal year ended June 30, 2010. The Company is currently evaluating the impact
of SFAS 163 on its financial statements but does not expect it to have an effect
on the Company's financial position, results of operations or cash flows.
In May 2008, the FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting
for Convertible Debt Instruments that may be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to
convertible debt securities that, upon conversion, may be settled by the issuer
fully or partially in cash. FSP APB 14-1 specifies that issuers of such
instruments should separately account for the liability and equity components in
a manner that will reflect the entity's nonconvertible debt borrowing rate when
interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and must be applied on a retrospective basis. Early adoption is not permitted.
The Company is assessing the potential impact of this FSP, (if any).
In June 2008, the FASB issued FSP EITF 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP
EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the earnings allocation in computing
earnings per share under the two-class method as described in SFAS No. 128,
"Earnings per Share." Under the guidance of FSP EITF 03-6-1, unvested
share-based payment awards that contain nonforfeitable rights to dividends or
dividend equivalents (whether paid or unpaid) are participating securities and
shall be included in the computation of earnings-per-share pursuant to the
two-class method. FSP EITF 03-6-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008 and all prior-period earnings
per share data presented shall be adjusted retrospectively. Early application is
not permitted. The Company is assessing the potential impact of this FSP on its
earnings per share calculation.
14
In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an
Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF
07-5"). EITF 07-5 provides that an entity should use a two-step approach to
evaluate whether an equity-linked financial instrument (or embedded feature) is
indexed to its own stock, including evaluating the instrument's contingent
exercise and settlement provisions. EITF 07-5 is effective for financial
statements issued for fiscal years beginning after December 15, 2008. Early
application is not permitted. The Company is assessing the potential impact of
this EITF on its financial condition and results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
You should read the following discussion and analysis of our financial
condition and results of operations together with our financial statements and
the related notes and other financial data included elsewhere in this report.
Some of the information contained in this discussion and analysis or set forth
elsewhere in this report, including information with respect to our plans and
strategy for our business, includes forward-looking statements that involve
risks and uncertainties. You should review the cautionary statement regarding
forward-looking statements" in the first paragraph of Item 1A of our Annual
Report on Form 10-K for a discussion of important factors that could cause
actual results to differ materially from the results described in or implied by
the forward-looking statements contained in the following discussion and
analysis.
OVERVIEW
This Financial Review discusses the Company's results of operations, financial
position and liquidity. This discussion should be read in conjunction with the
consolidated financial statements and related notes thereto contained elsewhere
in this quarterly report.
The Company provides comprehensive management and consulting services to UAHC
Health Plan of Tennessee, Inc. ("UAHC-TN"), a managed care organization ("MCO")
which is a wholly owned second-tier subsidiary of United American Healthcare
Corporation. Since November 1993, UAHC-TN has had a contract with the State of
Tennessee, Bureau of TennCare ("TennCare"), to arrange for the financing and
delivery of health care services on a capitated basis to eligible Medicaid
beneficiaries and non-Medicaid individuals who lack access to private or
employer sponsored health insurance or to another government health plan.
On April 22, 2008, we learned that UAHC-TN will cease providing managed care
services as a TennCare contractor when its present TennCare contract expires.
(See Note 5 to our Unaudited Condensed Consolidated Financial Statements in Item
1 above.) UAHC-TN's TennCare members transferred to other managed care
organizations on November 1, 2008, after which UAHC-TN continues to perform its
remaining contractual obligations through its TennCare contract expiration date
of June 30, 2009. However, revenue under this contract ceased October 31, 2008.
The net loss related to this contract discontinuance is estimated to
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range between $4.6 million and $6.6 million, which includes claim processing
costs, employee severance, lease termination costs and other corporate general
administrative expenses beginning November 2008 through June 2009. During the
fiscal 2009 second quarter, the Company incurred approximately $1.4 million of
such estimated costs. The Company has subleased its leased Tennessee facility to
a third party effective beginning April 2009 and ending December 31, 2010. The
Company recorded a liability of $0.1 million related to the remaining lease
obligation. As a result of the impending contract termination, the Company also
sold fixed assets and recognized a loss on disposal of $0.1 million. As of
December 31, 2008, there were no TennCare enrollees in UAHC-TN.
On October 10, 2006, UAHC-TN entered into a contract with the Centers for
Medicare & Medicaid Services (CMS) to act as a Medicare Advantage qualified
organization. The contract authorizes UAHC-TN to serve members enrolled in both
the Tennessee Medicaid and Medicare programs, commonly referred to as
"dual-eligibles," specifically to offer a Special Needs Plan to its eligible
members in Shelby County, Tennessee (including the City of Memphis), and to
operate a Voluntary Medicare Prescription Drug Plan, both beginning January 1,
2007. The contract term is through December 31, 2009. As of January 30, 2009
there were approximately 719 enrollees in UAHC-TN's Medicare Advantage Special
Needs Plan ("our MA-SNP").
The total number of employees of the Company at December 31, 2008 was 29
compared to 111 at December 31, 2007. The impending expiration of the TennCare
contract has resulted in a substantial decrease in the total number of
employees, and management expects a further substantial decrease by the
contract's June 30, 2009 expiration date.
FOR THE THREE MONTHS ENDED DECEMBER 31, 2008 COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 2007
Total revenues decreased $2.3 million (32%) to $4.8 million for the three months
ended December 31, 2008, compared to $7.0 million for the three months ended
December 31, 2007. The decrease was principally due to the complete transfer of
UAHC-TN's TennCare enrollees to other managed care organizations on November 1,
2008 and the impending discontinuance of its managed care services as a TennCare
contractor, as described in Note 5 to our Unaudited Condensed Consolidated
Financial Statements in Item 1 above.
Fixed administrative fees related to TennCare's ASO program (as described under
the heading "Liquidity and Capital Resources" below) were $1.2 million for the
three months ended December 31, 2008, a decrease of $2.5 million (68%) from $3.7
million for the three months ended December 31, 2007. The decrease is
principally due to a decrease in TennCare enrollees, as all enrollees were
transferred to other managed care organizations on November 1, 2008.
Variable administrative fees resulting from MRA revenue were $0.9 million for
the three months ended December 31, 2008, compared to $0.3 million for the three
months ended December 31, 2007. The $0.9 million MRA revenue received in fiscal
2009 relates to fiscal
16
2008. The $0.3 million MRA revenue received in fiscal 2008 relates to the third
quarter of fiscal 2006.
Our MA-SNP medical premiums revenues were $2.4 million for the three months
ended December 31, 2008 compared to $2.7 million for the three months ended
December 31, 2007. The decrease of $0.3 million is attributable to the decrease
in our MA-SNP enrollees.
Our MA-SNP per member per month ("PMPM") premium rate for the three months ended
December 31, 2008 was $1,124.
Total expenses decreased $0.5 million to $6.2 million for the three months ended
December 31, 2008 as compared to $6.7 million for the three months ended
December 31, 2007. The decrease in total expenses was primarily the result of a
decrease in marketing, general and administrative expenses.
Medical expenses for our MA-SNP decreased $0.3 million (11%) to $2.3 million for
the three months ended December 31, 2008 compared to $2.6 million for the three
months ended December 31, 2007. The ratio of such medical expenses to medical
premiums revenues for our MA-SNP, expressed as a percentage -- the medical loss
ratio ("MLR") -- was 81.2% for the three months ended December 31, 2008.
Marketing, general and administrative expenses decreased $0.4 million (10%) to
$3.7 million for the three months ended December 31, 2008 from $4.1 million for
the three months ended December 31, 2007. The decrease was principally due to
reductions in labor costs, adminstrative costs and professional services
expenses resulting from the impending TennCare contract expiration.
Depreciation and amortization expense was $0.06 million for the three months
ended December 31, 2008, a slight increase from $0.05 million for the three
months ended December 31, 2007.
Loss before income taxes was $1.4 million for the quarter ended December 31,
2008 compared to income before income taxes of $0.4 million for the quarter
ended December 31, 2007.
Net loss was $1.4 million, or ($0.16) per basic share, for the quarter ended
December 31, 2008, compared to net income of $0.3 million, or $0.03 per basic
share, for the quarter ended December 31, 2007. The decrease is primarily due to
the decrease in overall revenue resulting from the impending expiration of the
TennCare contract.
FOR THE SIX MONTHS ENDED DECEMBER 31, 2008 COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 2007
Total revenues decreased $2.0 million (15%) to $11.3 million for the six months
ended December 31, 2008, compared to $13.2 million for the six months ended
December 31, 2007. The decrease was principally due to the decrease in TennCare
revenues primarily due to the transfer of UAHC-TN's TennCare enrollees to other
managed care organizations on
17
November 1, 2008 and the impending discontinuance of its managed care services
as a TennCare contractor.
Fixed administrative fees related to TennCare's ASO program (as described under
the heading "Liquidity and Capital Resources" below) were $4.6 million for the
six months ended December 31, 2008, a decrease of $2.8 million (38%) from $7.4
million for the six months ended December 31, 2007. The decrease is principally
due to a decrease in TennCare enrollees, as the enrollees were transferred to
other managed care organizations on November 1, 2008.
Variable administrative fees resulting from MRA revenue were $0.9 million for
the six months ended December 31, 2008, compared to $0.3 million for the six
months ended December 31, 2007. The $0.9 million MRA revenue received in fiscal
2009 relates to fiscal 2008. The $0.3 million MRA revenue received in fiscal
2008 relates to the third quarter of fiscal 2006.
Our MA-SNP medical premiums revenues were $5.3 million for the six months ended
December 31, 2008 compared to $4.8 million for the six months ended December 31,
2007. The increase of $0.5 million is attributable to the increase in our MA-SNP
enrollees.
Our MA-SNP per member per month ("PMPM") premium rate for the six months ended
December 31, 2008 was $1,202.
Total expenses decreased $0.4 million to $12.4 million for the six months ended
December 31, 2008 as compared to $12.8 million for the six months ended December
31, 2007. The decrease is primarily due to a decrease in marketing, general and
administrative expenses.
Medical expenses for our MA-SNP were $4.8 million for the six months ended
December 31, 2008, compared to $4.4 million for the six months ended December
31, 2007. The increase in medical expenses is attributable to the growth in our
MA-SNP activity. The ratio of such medical expenses to medical premiums revenues
for our MA -SNP, expressed as a percentage -- the medical loss ratio ("MLR") --
was 89.4% for the six months ended December 31, 2008.
Marketing, general and administrative expenses decreased $1.0 million (11%) to
$7.3 million for the six months ended December 31, 2008 from $8.3 million for
the six months ended December 31, 2007. The decrease was principally due to
reductions in labor costs, adminstrative costs and professional services
expenses resulting from the impending TennCare contract expiration.
Depreciation and amortization expense was $0.1 million for the six months ended
December 31, 2008, a $0.01 million increase from $0.09 million for the six
months ended December 31, 2007.
Income tax expense was $0.08 million for the six months ended December 31, 2008
compared to $0.1 million for the six months ended December 31, 2007. The
Company's effective tax rate for the six months ended December 31, 2008 is (7%)
and differs from the
18
statutory rate of 34%. This difference is primarily related to the change in the
deferred tax valuation allowance and state income taxes.
Loss before income taxes was $1.1 million for the six months ended December 31,
2008 compared to income before income taxes of $0.5 million for the six months
ended December 31, 2007.
Net loss was $1.2 million, or ($0.13) per basic share, for the six months ended
December 31, 2008, compared to net income of $0.3 million, or $0.04 per basic
share, for the six months ended December 31, 2007. The decrease is primarily due
to the decrease in overall revenue resulting from the impending expiration of
the TennCare contract.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2008, the Company had (i) cash and cash equivalents and
short-term marketable securities of $16.6 million, compared to $19.5 million at
June 30, 2008; (ii) working capital of $14.5 million, compared to working
capital of $15.3 million at June 30, 2008; and (iii) a current assets-to-current
liabilities ratio of 3.96-to-1, compared to 3.38-to-1 at June 30, 2008.
Cash used in operating activities of $2.8 million was primarily due to
claims processing expense and increased labor related payments such as severance
and accrued vacation, resulting from the impending expiration of the TennCare
contract. (See Note 5 to our Unaudited Condensed Consolidated Financial
Statements in Item 1 above.)
Cash used for financing activities of $0.06 millions was primarily due to a
share repurchase program. On November 25, 2008, the Company's board of directors
approved the share repurchase program, authorizing the Company to repurchase up
to $1.0 million of the Company's outstanding common stock. As of December 31,
2008, the Company had repurchased a total of 44,694 shares at an average price
of $1.57 per share under the share repurchase program.
Cash decreased $4.7 million for the six months ended December 31, 2008, compared
to an increase of $1.2 million for the comparable period a year earlier. The
decrease was principally due to increased net purchases of marketable securities
and the timing of medical claims payments.
Accounts receivable from the State of Tennessee increased $0.8 million at
December 31, 2008 compared to June 30, 2008, primarily due to timing of cash
receipts from TennCare.
Property, plant and equipment decreased by $0.3 million at December 31, 2008
compared to June 30, 2008, due to recording depreciation of $0.1 million and the
disposal of fixed assets associated with the sublease of the Tennessee facility.
19
The Company's subsidiary, UAHC-TN, had a required minimum net worth requirement
using statutory accounting practices of $7.1 million at December 31, 2008.
UAHC-TN had excess statutory net worth of approximately $7.0 million at December
31, 2008.
The Company's subsidiary, UAHC-TN, was for many consecutive years a managed care
organization in the TennCare program, a State of Tennessee program that provided
medical benefits to Medicaid and working uninsured recipients. On April 22,
2008, we learned that UAHC-TN will cease providing managed care services as a
TennCare contractor when its present TennCare contract expires. UAHC-TN's
TennCare members transferred to other managed care organizations on November 1,
2008, after which UAHC-TN continues to perform its remaining contractual
obligations through its TennCare contract expiration date of June 30, 2009.
However, revenue under this contract was only earned through October 31, 2008.
Revenue under this contract represented 50% and 57% of the Company's total
revenues for the six months ended December 31, 2008 and 2007, respectively. The
net loss related to this contract discontinuance is estimated to range between
$4.6 million and $6.6 million, which includes claim processing costs, employee
severance, and other corporate general administrative expenses beginning
November 2008 through June 2009. During the fiscal 2009 second quarter, the
Company incurred approximately $1.4 million of such estimated costs. The Company
has subleased its leased Tennessee facility to a third party effective beginning
April 2009 and ending December 31, 2010. The Company recorded a liability of
$0.1 million related to the remaining lease obligation. As a result of the
impending contract termination, the Company also sold fixed assets and
recognized a loss on disposal of $0.1 million. Management believes that the
discontinuance of the TennCare contract will have a material impact on the
Company's operations.
As a result of the contract expiration as discussed above, the Company's
deferred tax valuation allowance was increased during fiscal 2008. In the third
quarter of fiscal 2008, the Company recorded deferred tax expense of $1.5
million. Also, management assessed the previously recorded goodwill of $3.5
million and determined that such amount was impaired in accordance with SFAS No.
142. As a result, the Company recorded a goodwill impairment charge of $3.5
million also during the third quarter of fiscal 2008.
20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Our management has evaluated, with the participation of our principal executive
and principal financial officers, the effectiveness of our disclosure controls
and procedures as of December 31, 2008, and based on their evaluation, our
principal executive and principal financial officers have concluded that these
controls and procedures are effective as of December 31, 2008. There was no
change in our internal controls over financial reporting identified in
connection with such evaluation that occurred during our fiscal quarter ended
December 31, 2008 that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
Disclosure controls and procedures are our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file and submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive and principal financial officers, as
appropriate to allow timely decisions regarding required disclosure.
Internal control over financial reporting is a process designed by, or under the
supervision of, our principal executive and principal financial officers, and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that: (1) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect our transactions and dispositions of
assets, (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorizations of our management and
directors, and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and others were previously defendants in the U.S. District Court for
the Eastern District of Michigan in lawsuits called "In re United American
Healthcare Corporation Securities Litigation," Master File No.
2:2005cv72112(LPZ/RSW). The District Court's dismissal of the complaint against
all defendants with prejudice has become final and nonappealable. On November
20, 2008, the period expired within which the plaintiffs could have filed a
petition seeking to appeal to the U.S. Supreme Court from the U.S. Court of
Appeals for the Sixth Circuit's affirmance of the District Court's dismissal of
the complaint, without the plaintiffs having done so.
As reported in our most recent Annual Report on Form 10-K, the Company and
others are defendants in a lawsuit in the Wayne County Circuit Court in Detroit,
Michigan, called "Provider Creditors Committee on behalf of Michigan Health
Maintenance Organizations Plans, Inc. v. United American Health Care
Corporation, et al." On December 16, 2008, the court denied the plaintiff's
emergency motion seeking a temporary restraining order to enjoin the Company
from implementing its share repurchase program. Active discovery is ongoing, and
the Company continues to vigorously defend the lawsuit.
Item 6. Exhibits
The following exhibits are files as part of this Report:
31.1 Certifications of Chief Executive Officer pursuant to Rule 13a-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certifications of Chief Financial Officer pursuant to Rule 13a-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications 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.
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
UNITED AMERICAN HEALTHCARE CORPORATION
Dated: February 5, 2009 By: /s/ William C. Brooks
-----------------------------------------
William C. Brooks
President & Chief Executive Officer
Dated: February 5, 2009 By: /s/ Stephen D. Harris
-----------------------------------------
Stephen D. Harris
Executive Vice President, Chief Financial
Officer & Treasurer
23