U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

                                       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: 0-30639

                                 WORLD AM, INC.
               (Exact Name of Company as Specified in its Charter)

                    Nevada                                        90-0142757
(State or Other Jurisdiction of Incorporation                  (I.R.S. Employer
               or Organization)                              Identification No.)

      4040 MacArthur Boulevard, Suite 240, Newport Beach, California 92660
                    (Address of Principal Executive Offices)

                                 (949) 955-5355
                          (Company's Telephone Number)

   ___________________________________________________________________________
   (Former Name, Former Address, and Former Fiscal Year, if Changed Since Last
                                     Report)

      Indicate by check mark whether the Company (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 Company
was required to file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.

      Indicate by check mark whether the Company is a shell company (as defined
in Rule 12b-2 of the Exchange Act): Yes |_| No |X|.

      As of November 6, 2006, the Company had 251,313,276 shares issued and
outstanding.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|.


                                        1

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I - FINANCIAL INFORMATION
   ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
      CONSOLIDATED BALANCE
      SHEET AS OF SEPTEMBER 30, 2006.....................................     3

      CONSOLIDATED STATEMENTS OF
      OPERATIONS FOR THE THREE AND NINE MONTHS
      ENDED SEPTEMBER 30, 2006 AND 2005 AND
      FOR THE PERIOD FROM MARCH 4, 2005
      (INCEPTION) THROUGH SEPTEMBER 30, 2006.............................     5

      CONSOLIDATED STATEMENT OF
      STOCKHOLDERS' DEFICIT FOR THE PERIOD
      FROM MARCH 4, 2005 (INCEPTION) THROUGH
      SEPTEMBER 30, 2006.................................................     7

      CONSOLIDATED STATEMENTS OF
      CASH FLOWS FOR THE NINE MONTHS ENDED
      SEPTEMBER 30, 2006 AND 2005 AND
      FOR THE PERIOD FROM MARCH 4, 2005
      (INCEPTION) THROUGH SEPTEMBER 30, 2006.............................    13

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.........................    15

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................    36

   ITEM 3. CONTROLS AND PROCEDURES.......................................    52

PART II - OTHER INFORMATION
   ITEM 1. LEGAL PROCEEDINGS.............................................    53

   ITEM 2. UNREGISTERED SALES OF EQUITY
           SECURITIES AND USE OF PROCEEDS................................    54

   ITEM 3. DEFAULTS UPON SENIOR SECURITIES...............................    54

   ITEM 4. SUBMISSION OF MATTERS TO A VOTE
           OF SECURITY HOLDERS...........................................    54

   ITEM 5. OTHER INFORMATION.............................................    54

   ITEM 6. EXHIBITS......................................................    55

SIGNATURES...............................................................    55


                                        2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                                 WORLD AM, INC.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2006
                                   (Unaudited)

                                     ASSETS
Current assets
  Cash                                                                $   15,374
  Accounts receivable, net                                                65,366
  Inventories                                                             24,219
                                                                      ----------
    Total current assets                                                 104,959
Fixed assets, net                                                          4,618
Other assets                                                               9,754
                                                                      ----------
Total assets                                                          $  119,331
                                                                      ==========
                      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
  Accounts payable and accrued liabilities                            $  439,435
  Due to stockholders                                                    349,604
  Payroll taxes payable                                                  366,250
  Deferred revenue                                                        61,347
  Notes payable                                                          101,943
  Convertible debentures and accrued interest payable,
    net of unamortized discount of $242,105                               40,704
                                                                      ----------
      Total current liabilities                                        1,359,283
 Derivatives and warrant liabilities                                   1,819,076
                                                                      ----------
Total liabilities                                                      3,178,359
  Commitments and contingencies
Stockholders' deficit
  Class A preferred stock; $0.0001 par value (liquidation preference
    of $1,700 per share); 40,000,000 shares authorized; 1,369 shares
    issued and no shares outstanding                                          --
  Class B preferred stock; $0.0001 par value (liquidation preference
    of $145,455 per share); 40,000,000 shares authorized;
    55 shares issued and outstanding                                          --


                                       3

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                                  (continued)

Common stock; $0.0001 par value; 1,500,000,000 shares
  authorized; 251,569,782 shares issued and 221,762,859
  shares issued and outstanding (1)                                      22,176
Additional paid-in capital                                            1,130,864
Deficit accumulated during the development stage                     (4,212,068)
                                                                    -----------
    Total stockholders' deficit                                      (3,059,028)
                                                                    -----------
Total liabilities and stockholders' deficit                         $   119,331
                                                                    ===========

(1)   The difference between the issued shares and the issued and outstanding
      shares is the number of shares held by the Company's transfer agent in
      escrow for future issuance under the Company's Stock Incentive Plan.

              The accompanying notes are an integral part of these
                        consolidated financial statements


                                       4

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                             Three Months    Three Months     Nine Months     Nine Months    From Inception
                                 Ended           Ended           Ended           Ended           Through
                             September 30,   September 30,   September 30,   September 30,    September 30,
                                 2006            2005            2006            2005             2006
                             -------------   -------------   -------------   -------------   --------------
<S>                            <C>              <C>           <C>               <C>            <C>
Revenues                       $  135,469       $  36,926     $   208,006       $  36,926      $   420,779
Cost of revenues                   77,841          14,593         109,284          14,593          225,068
                               ----------       ---------     -----------       ---------      -----------
  Gross profit                     57,628          22,333          98,722          22,333          195,711
General and administrative
  expenses                        341,782         212,391       1,111,102         223,662        1,898,592
                               ----------       ---------     -----------       ---------      -----------
Loss from operations             (284,154)       (190,058)     (1,012,380)       (201,329)      (1,702,881)
Other income (expense)
  Miscellaneous
    income/(expense)                  222          (2,345)            625          (2,345)         (15,625)
  Settlement gain                      --              --              --              --          116,000
  Interest expense               (336,401)         (1,495)     (2,694,893)         (1,495)      (2,704,646)
  Change in fair value of
    derivative and warrant
    liabilities                 1,091,042              --       1,091,042              --        1,091,042
                               ----------       ---------     -----------       ---------      -----------
    Total other income
      (expense)                   754,863          (3,840)     (1,603,226)         (3,840)      (1,513,229)
</TABLE>


                                        5

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                                   (continued)

<TABLE>
<CAPTION>
                              Three Months    Three Months     Nine Months     Nine Months    From Inception
                                  Ended           Ended           Ended           Ended           Through
                              September 30,   September 30,   September 30,   September 30,    September 30,
                                  2006            2005            2006            2005             2006
                             --------------   -------------   -------------   -------------   --------------
<S>                          <C>              <C>             <C>             <C>               <C>
Income (loss) before
  provision for income
  taxes                             470,709       (193,898)     (2,615,606)       (205,169)      (3,216,110)
Provision for income taxes               --             --              --              --               --
                             --------------   ------------    ------------    ------------      -----------
Net income (loss)            $      470,709   $   (193,898)   $ (2,615,606)   $   (205,169)     $(3,216,110)
                             ==============   ============    ============    ============      ===========
Basic income (loss) per
  common share               $         0.00   $      (0.01)   $      (0.02)    $     (0.02)
                             ==============   ============    ============    ============
Basic weighted average
  common  shares
  outstanding                   203,794,870     30,538,707     164,070,884      13,639,819
                             ==============   ============    ============    ============
Diluted income (loss) per
  common share               $         0.00   $      (0.01)   $      (0.02)   $      (0.02)
                             ==============   ============    ============    ============
Diluted weighted average
  common  shares
  outstanding                 1,936,974,396     30,538,707     164,070,884      13,639,819
                             ==============   ============    ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                        consolidated financial statements


                                        6

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006

<TABLE>
<CAPTION>
                                                   Class A         Class B                  Receivable
                                                  Preferred       Preferred                 Related to
                              Common Stock          Stock           Stock      Additional  Issuance of                   Total
                           ------------------  --------------  --------------    Paid-in      Common    Accumulated  Stockholders'
                             Shares    Amount  Shares  Amount  Shares  Amount    Capital      Stock       Deficit       Deficit
                           ----------  ------  ------  ------  ------  ------  ----------  -----------  -----------  -------------
<S>                        <C>         <C>      <C>      <C>     <C>     <C>    <C>         <C>          <C>           <C>
Senz-It, Inc. March 4,
  2005 (inception)                 --  $   --      --    $--     --      $--    $     --    $      --    $      --     $      --

Issuance of shares to
  Senz-It, Inc. founders           --      --      --     --     55       --      10,000           --           --        10,000

Assumption by Senz-It,
  Inc. of World Am, Inc.
  capital structure,
  outstanding warrants
  and options on
  August 31, 2005          66,570,285   6,656   1,369     --     --       --     221,978     (220,000)    (995,955)     (987,321)

Common stock issued in
  September 2005 for
  services, weighted
  average $0.004 per
  share                    15,410,573   1,541      --     --     --       --      52,916           --           --        54,457

Common stock issued in
  October 2005 for
  services, weighted
  average $0.003 per
  share                    12,748,670   1,275      --     --     --       --      39,521           --           --        40,796

Common stock issued in
  October 2005 for
  services, weighted
  average $0.018 per
  share                     1,795,574     180      --     --     --       --      31,961           --           --        32,141
</TABLE>


                                        7

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                    Class A         Class B                  Receivable
                                                   Preferred       Preferred                 Related to
                               Common Stock          Stock           Stock      Additional  Issuance of                   Total
                           -------------------  --------------  --------------    Paid-in      Common    Accumulated  Stockholders'
                              Shares    Amount  Shares  Amount  Shares  Amount    Capital      Stock       Deficit       Deficit
                           -----------  ------  ------  ------  ------  ------  ----------  -----------  -----------  -------------
<S>                        <C>          <C>      <C>      <C>     <C>     <C>     <C>         <C>        <C>           <C>
Common stock issued in
  November 2005 to
  employees, weighted
  average $0.024 per
  share                     10,375,000   1,038      --    --      --      --      249,229           --           --       250,267

Common stock issued in
  December 2005 to
  employees, weighted
  average $0.024 per
  share                      2,005,000     201      --    --      --      --       19,460       (4,040)          --        15,621

Common stock issued in
  December 2005 for
  satisfaction of all
  obligations related to
  a convertible note
  payable weighted
  average of $0.013 per
  share                      4,642,857     464      --    --      --      --       59,893           --           --        60,357

Net loss                            --      --      --    --      --      --           --           --     (600,507)     (600,507)
                           -----------  ------   -----   ---     ---     ---      -------     --------   ----------    ----------
Balance, December 31,
  2005 (audited)           113,547,959  11,355   1,369    --      55      --      684,958     (224,040)  (1,596,462)   (1,124,189)

The following information
  for the nine months
  ended September 30,
  2006 is unaudited:
  Common stock issued in
  January 2006 to
  employees, weighted
  average $0.009 per
  share                      3,740,000     374      --    --      --      --       35,395           --           --        35,769
</TABLE>


                                       8

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                   Class A          Class B                 Receivable
                                                  Preferred        Preferred                Related to
                               Common Stock         Stock            Stock      Additional   Issuance                    Total
                            ------------------  --------------  -------------     Paid-in    of Common  Accumulated  Stockholders'
                              Shares    Amount  Shares  Amount  Shares  Amount    Capital      Stock      Deficit       Deficit
                            ----------  ------  ------  ------  ------  ------  ----------  ----------  -----------  -------------
<S>                         <C>          <C>      <C>     <C>     <C>     <C>     <C>           <C>         <C>        <C>
Common stock issued in
  January 2006 for
  services, weighted
  average $0.010 per share  12,000,000   1,200    --      --      --      --      121,200       --          --         122,400
Common stock issued in
  January 2006 for
  services, weighted
  average $0.015 per share   2,150,000     215    --      --      --      --       32,035       --          --          32,250
Common stock issued in
  February 2006 for
  services, weighted
  average $0.006 per share   2,700,000     270    --      --      --      --       17,630       --          --          17,900
Common stock issued in
  February 2006 to
  employees, weighted
  average $0.018 per share   2,623,077     263    --      --      --      --       48,037       --          --          48,300
Common stock issued in
  March 2006 to
  employees, weighted
  average $0.017 per share     626,923      63    --      --      --      --       10,594       --          --          10,657
Common stock issued in
  March 2006 for exercise
  of warrant, weighted
  average $0.0001           30,879,999   3,088    --      --      --      --       24,700       --          --          27,788
</TABLE>


                                       9

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                   Class A          Class B                Receivable
                                                  Preferred        Preferred               Related to
                               Common Stock         Stock            Stock     Additional   Issuance                   Total
                            -----------------  --------------  --------------   Paid-in    Common of   Accumulated  Stockholders'
                              Shares   Amount  Shares  Amount  Shares  Amount   Capital      Stock       Deficit       Deficit
                            ---------  ------  ------  ------  ------  ------  ----------  ----------  -----------  -------------
<S>                         <C>          <C>     <C>     <C>     <C>     <C>     <C>          <C>            <C>       <C>
Common stock issued in
  March 2006 for services,
  weighted average $0.014
  per share                   500,000     50     --      --      --      --       6,950          --          --         7,000
Common stock issued in
  March 2006 to employees,
  weighted average $0.015
  per share                   673,077     67     --      --      --      --      10,030          --          --        10,097
Payment for shares issued
  December 2005                    --     --     --      --      --      --        --         4,040          --         4,040
Common stock issued in
  April 2006 for services,
  weighted average $0.015
  per share                 1,600,000    160     --      --      --      --      24,382          --          --        24,542
Common stock issued in
  April 2006 to employees,
  weighted average $0.015
  per share                   350,000     35     --      --      --      --       5,215          --          --         5,250
Common stock issued in
  May 2006 to employees,
  weighted average $0.0119
  per share                 1,000,000    100     --      --      --      --      11,800          --          --        11,900
</TABLE>


                                       10

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                     Class A         Class B                  Receivable
                                                    Preferred       Preferred                 Related to
                                Common Stock          Stock           Stock      Additional  Issuance of                   Total
                             ------------------  --------------  --------------    Paid-in      Common    Accumulated  Stockholders'
                               Shares    Amount  Shares  Amount  Shares  Amount    Capital      Stock       Deficit       Deficit
                             ----------  ------  ------  ------  ------  ------  ----------  -----------  -----------  -------------
<S>                          <C>          <C>      <C>     <C>     <C>     <C>    <C>             <C>          <C>        <C>
Cancellation of common
  stock issued to employee
  in 2005                    (4,459,481)  (446)    --      --      --      --     (47,320)        --           --         (47,766)
Common stock issued in June
  2006 for services,
  weighted average $0.007
  per share                   1,500,000    150     --      --      --      --      10,350         --           --          10,500
Common stock issued in June
  2006 to employees,
  weighted average $0.012
  per share                   2,200,000    220     --      --      --      --      26,590         --           --          26,810
Common stock issued in July
  2006 for services,
  weighted average $0.007
  per share                  33,285,713  3,329     --      --      --      --     229,671         --           --         233,000
Common stock issued in July
  2006 to employees,
  weighted average $0.0081
  per share                   3,595,125    359     --      --      --      --      28,595         --           --          28,954
Common stock issued in
  August 2006 to employees,
  weighted average $0.0054
  per share                   2,968,000    297     --      --      --      --      15,656         --           --          15,953
Common stock issued in
  August 2006 for services,
  weighted average $0.006
  per share                   2,153,846    215     --      --      --      --      12,708         --           --          12,923
</TABLE>


                                       11

<PAGE>

                                 WORLD AM, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
     FOR THE PERIOD OF MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                   Class A         Class B                   Receivable
                                                  Preferred       Preferred                  Related to
                              Common Stock          Stock           Stock        Additional  Issuance of                  Total
                          --------------------  ---------------  --------------   Paid-in      Common     Accumulated  Stockholders'
                             Shares    Amount   Shares   Amount  Shares  Amount    Capital      Stock       Deficit       Deficit
                          -----------  -------  ------   ------  ------  ------  ----------  -----------  -----------  -------------
<S>                        <C>         <C>       <C>       <C>     <C>     <C>    <C>          <C>         <C>          <C>
Common stock issued in
  September 2006 to
  employees, weighted
  average $0.0054 per
  share                     2,176,240      217      --      --     --       --       11,178         --         --            11,395
Common stock issued in
  September 2006 for
  services, weighted
  average $0.0045 per
  share                     5,952,381      595      --      --     --       --       26,189         --         --            26,784
Reversal of receivable
  related to Issuance of
  Common Stock                     --       --      --      --     --       --     (220,000)   220,000         --                --
Options vesting during
  the period                       --       --      --      --     --       --        4,320         --         --             4,320
Net loss                           --       --      --      --     --       --           --         --     (2,615,606)   (2,615,606)
                          -----------  -------   -----     ---    ---      ---   ----------    -------     ----------   -----------
Balance, September 30,
  2006 (Unaudited)        221,762,859  $22,176   1,369(1)  $--     55      $--   $1,130,864         --     (4,212,068)  $(3,059,028)
                          ===========  =======   =====     ===    ===      ===   ==========    =======     ==========   ===========
</TABLE>

(1)   In January 2006, the Company made the determination to cancel the 1,369
      shares of Class A preferred stock based on non-performance under a related
      loan agreement. Therefore, the Company considers these shares to be
      issued, since they have not actually been cancelled yet, but not
      outstanding.

   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                       12

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Nine Months     Nine Months      Inception
                                                                  Ended           Ended           Through
                                                              September 30,   September 30,   September 30,
                                                                   2006            2005            2006
                                                              -------------   -------------   -------------
<S>                                                            <C>              <C>            <C>
Cash flows from operating activities:
  Net loss                                                     $(2,615,606)     $(205,169)     $(3,216,110)
  Adjustments to reconcile net loss to net
    cash (used in) provided by operating activities:
      Initial fair value of derivative and
        warrant liabilities                                      2,635,118             --        2,635,118
      Change in fair value of derivative and
        warrant liabilities                                     (1,091,042)            --       (1,091,042)
      Depreciation                                                   1,903          1,393            3,743
      Stock issued for services                                    487,301         54,457          675,052
      Loss on reclassification of capital lease asset                                                2,388
      Vested options                                                 4,320             --            4,320
      Settlement gain                                                   --             --         (116,000)
      Accrued interest added to principal balance                    7,808             --            7,808
      Amortization of discount on convertible debt                  32,896             --           32,896
  Changes in operating assets and liabilities:
      Accounts receivable, net                                     (41,258)         9,539          (17,250)
      Inventories                                                  (12,067)        (3,346)         (13,135)
      Other assets                                                  (2,704)        (4,000)             496
      Accounts payable and accrued liabilities                     209,642         75,886          268,383
      Payroll taxes payable                                         69,526         84,363          181,731
      Deferred revenue                                              61,347             --           61,347
                                                               -----------      ---------      -----------
        Net cash (used in) provided by operating activities       (252,816)        13,123         (580,258)
Cash flows from investing activities:
  Cash acquired in reverse merger                                       --            935              935
  Purchase of fixed assets                                            (651)            --             (651)
                                                               -----------      ---------      -----------
        Net cash (used in) provided by investing activities           (651)           935              284
Cash flows from financing activities:
  Change in due to related parties (payments of
    $222,259 and advances of $12,788)                             (209,471)       (16,500)         (94,248)
  Proceeds from warrant exercise                                    27,788             --           27,788
  Proceeds from issuance of debenture                              275,000             --          275,000
  Proceeds from common stock issued to employees                   209,124             --          475,012
  Proceeds from sale of common stock                                    --         10,000           10,000
  Repurchase of common stock                                       (47,766)            --          (47,766)
</TABLE>


                                       13

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (continued)

<TABLE>
<CAPTION>
                                                                  Nine Months Ended    Nine Months Ended    Inception Through
                                                                 September 30, 2006   September 30, 2005   September 30, 2006
                                                                 ------------------   ------------------   ------------------
<S>                                                                   <C>                <C>                   <C>
  Proceeds from (repayments on) from line
    of credit, net                                                       3,763                  (765)             (4,718)
  Principal payments on convertible note payable                            --                    --             (30,000)
  Principal payments on note payable                                        --                (4,500)            (15,720)
                                                                      --------           -----------           ---------
    Net cash provided by (used in) financing
      activities                                                       258,438               (11,765)            595,348
                                                                      --------           -----------           ---------
Net change in cash                                                       4,971                 2,293              15,374
Cash, beginning of period                                               10,403                    --                  --
                                                                      --------           -----------           ---------
Cash, end of period                                                   $ 15,374           $     2,293           $  15,374
                                                                      ========           ===========           =========
Supplemental disclosure of cash flow information:
Cash paid for income taxes                                            $     --           $        --           $      --
                                                                      ========           ===========           =========
Cash paid for interest                                                $    412           $        --           $   5,695
                                                                      ========           ===========           =========
Schedule of non-cash operating, investing and financing
activities:
Acquisition of other assets and liabilities
in reverse merger                                                     $     --           $(1,098,417)          $(995,956)
                                                                      ========           ===========           =========
Issuance of 55 shares of Class B preferred stock                      $     --           $        --           $      --
                                                                      ========           ===========           =========
Issuance of warrants for purchase of 18,000,000 shares of
common stock                                                          $     --           $        --           $      --
                                                                      ========           ===========           =========
Reclassification of capital lease                                     $     --           $        --           $  (8,175)
                                                                      ========           ===========           =========
Removal of fixed asset due to reclassifcation of capital lease        $     --           $        --           $  10,563
                                                                      ========           ===========           =========
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.


                                       14

<PAGE>

                                 WORLD AM, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Organization.

World Am, Inc. ("World Am" or "Company") was organized in 1994. In 2002, World
Am changed its domicile from Florida to Nevada.

On August 31, 2005, the Company consummated an agreement to acquire all of the
issued and outstanding capital stock of Senz-It, Inc. ("Senz-It') from SUTI
Holdings, LP ("SUTI") in exchange for 55 shares of the Company's Class B
preferred stock and a warrant to purchase 18,000,000 shares of common stock. The
exercise price of the common shares under these warrants is $0.0001 per share.
The warrants vested immediately and expire in August 2010. Each share of Class B
preferred stock is convertible into the greater of 1% of the outstanding common
shares of the Company, including the common stock equivalents of all unexercised
warrants, options and convertible securities or 7,272,728 shares of common
stock. After the transaction, the officers and directors of the Company resigned
and the management of Senz-It controlled these positions.

As a result, the transaction was recorded as a "reverse-merger" whereby Senz-It
was considered to be the acquirer for accounting purposes. The transaction is
equivalent to the issuance of stock by a development stage company (Senz-It,
Inc.) for the net monetary assets of a public company (the Company), accompanied
by a recapitalization. Accordingly, these consolidated financial statements are
the historical financial statements of Senz-It.

Senz-It was incorporated in the State of California on March 4, 2005. There is
no historic financial information prior to that date.

Basis of Presentation.

The interim consolidated financial statements present the balance sheet of the
Company and its subsidiaries at September 30, 2006, its statements of operations
for the three and nine months ended September 30, 2006 and 2005 and the period
from March 4, 2005 (inception) through September 30, 2006, cash flows for the
nine months ended September 30, 2006 and 2005 and from the period from March 4,
2005 (inception) through September 30, 2006, and stockholders' deficit for the
period from March 4, 2005 (inception) through September 30, 2006. All
significant intercompany balances have been eliminated in consolidation.

The interim consolidated financial information is unaudited. In the opinion of
management, all adjustments necessary to present fairly the financial position
as of September 30, 2006 and the results of operations and cash flows for the
three and nine months then ended have been included in the consolidated
financial statements. Interim results are not necessarily indicative of results
of operations for the full year.


                                       15

<PAGE>

The accompanying consolidated financial statements have been prepared in
accordance with Securities and Exchange Commission requirements for interim
financial statements. Therefore, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. The consolidated financial
statements should be read in conjunction with the Company's Form 10-KSB, as
amended, for the year ended December 31, 2005.

The Company effected a 100-to-1 reverse stock split in January 2005 and a
three-for-two stock dividend in August 2005. The financial statements presented
herein have been restated to reflect the reverse stock splits as if they had
occurred at the beginning of each period presented.

The Company is in the development stage, as defined in Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises", with its principal activity being: (a) developing,
manufacturing and distributing automatic passage control and security devices,
and (b) marketing innovative technologies in the field of micro-sensor elements
and sensor arrays.

NOTE 2 - GOING CONCERN

The Company incurred a net loss of $2,615,606 for the nine months ended
September 30, 2006. Additionally, the Company's current liabilities exceeded its
current assets by $1,254,324 at September 30, 2006 and its accumulated deficit
was $4,212,068 as of September 30, 2006. These factors create substantial doubt
about the Company's ability to continue as a going concern. The Company's
management has plans to promote its services, gain clients and expand its
relationships with current clients. The Company will also seek additional
sources of capital through the issuance of debt and equity financing, but there
can be no assurance that the Company will be successful in accomplishing its
objectives. The Company will require at least $5,000,000 to sustain operations
and implement its business plan.

The ability of the Company to continue as a going concern is dependent on
additional sources of capital and the success of the Company's plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Significant estimates include the realization of accounts
receivable and inventories, the value of shares issued for services and the
amount of the deferred tax asset valuation allowance. Accordingly, actual
results could differ from these estimates.


                                       16

<PAGE>

Accounts Receivable.

Accounts receivable consists of amounts billed to customers upon performance of
service or delivery of goods. The Company performs ongoing credit evaluations of
customers and adjusts credit limits based upon payment history and the
customers' current creditworthiness, as determined by its review of their
current credit information. The Company continuously monitors collections and
payments from its customers and maintains a provision for estimated credit
losses based upon its historical experience and any customer-specific collection
issues that it has identified.

Inventories.

Inventories are stated at the lower of cost or market. Cost is principally
determined by using the average cost method. Inventories consists of raw
materials as well as finished goods held for sale. The Company's management
monitors the inventories for excess and obsolete items and makes necessary
valuation adjustments when required. Adjustments are considered to be a
reduction in the cost basis of the corresponding inventory.

Fixed Assets.

Fixed assets are recorded at cost and are depreciated using the straight-line
method over the estimated useful lives of the assets. The useful lives for the
related assets range from three to seven years.

Maintenance and repairs are charged to expense as incurred. Renewals and
improvements of a major nature are capitalized. At the time of retirement or
other disposition of property and equipment, the cost and accumulated
depreciation are removed from the accounts and any resulting gains or losses are
reflected in the consolidated statement of operations.

Long-Lived Assets.

The Company accounts for its long-lived assets in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the historical cost carrying value of an
asset may no longer be appropriate. The Company assesses recoverability of the
carrying value of an asset by estimating the future net cash flows expected to
result from the asset, including eventual disposition. If the future net cash
flows are less than the carrying value of the asset, an impairment loss is
recorded equal to the difference between the asset's carrying value and fair
value or disposable value. As of September 30, 2006, the Company does not
believe there has been any impairment of its long-lived assets. There can be no
assurances, however, that demand for the Company's products and services will
continue, which could result in an impairment of long-lived assets in the
future.


                                       17

<PAGE>

Convertible Debenture and Beneficial Conversion Feature.

If the conversion feature of conventional convertible debt provides for a rate
of conversion that is below market value, this feature is characterized as a
beneficial conversion feature ("BCF"). A BCF is recorded by the Company as a
debt discount pursuant to Emerging Issues Task Force ("EITF") Issue No. 98-5,
"Accounting for Convertible Securities with Beneficial Conversion Features or
Contingency Adjustable Conversion Ratio," and EITF Issue No. 00-27, "Application
of EITF Issue No. 98-5 to Certain Convertible Instruments." In those
circumstances, the convertible debt will be recorded net of the discount related
to the BCF. The Company amortizes the discount to interest expense over the life
of the debt using the effective interest method.

Derivative Financial Instruments.

In the case of non-conventional convertible debt, the Company bifurcates its
embedded derivative instruments and records them under the provisions of SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended, and EITF Issue No. 00-19, "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock." The
Company's derivative financial instruments consist of embedded derivatives
related to a non-conventional debenture entered into with Golden Gate Investors,
Inc./La Jolla Cove Investors, Inc. (see Note 8). These embedded instruments
related to the debenture include the conversion feature, liquidated damages
related to registration rights and default provisions. The accounting treatment
of derivative financial instruments requires that the Company record the
derivatives and related warrants at their fair value as of the inception date of
the agreement and at fair value as of each subsequent balance sheet date. Any
change in fair value will be recorded as non-operating, non-cash income or
expense at each reporting period. If the fair value of the derivatives is higher
at the subsequent balance sheet date, the Company will record a non-operating,
non-cash charge. If the fair value of the derivative is lower at the subsequent
balance sheet date, the Company will record non-operating, non-cash income.
During the three and nine months ended September 30, 2006, the Company recorded
the initial fair value of the derivatives of $422,430 and $732,487,
respectively, and $2,011,631 for related warrants as a component of interest
expense in the accompanying consolidated statements of operations. Derivatives
and warrants were valued primarily using the Black-Scholes option pricing model
with the following assumptions: dividend yield of 0%, annual volatility of 138%
- 163%, and risk free interest rate of 5.1%, totaling $473,375 for the
conversion-related and other derivatives and $1,345,701 for the warrants at
September 30, 2006. The first $275,000 of the conversion-related derivatives was
recorded as a discount on the convertible debt and will be amortized to interest
expense over the term of the debenture and the balance was recorded to interest
expense. For the three and nine months ended September 30, 2006, the Company
recorded a decrease in the fair value of the derivative and warrant liabilities
of $1,025,042, which is included as a component of other income in the
consolidated statements of operations. The derivatives are classified as
long-term liabilities.

In addition, under the provisions of EITF Issue No. 00-19, "Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock," as a result of entering into the convertible debt, the
Company is required to classify all other non-employee stock options and
warrants as liabilities and mark them to market at each reporting date.
Non-employee stock options and warrants were valued primarily using the
Black-Scholes option-pricing model with the following assumptions: dividend
yield of 0%, volatility of 163%, and risk free interest rate of 5.1%. The
initial fair value assigned to the non-employee options and warrants was
$166,000, which was recorded to interest expense. The Company recorded a
decrease in the fair market value of the warrants of $66,000 for the three and
nine months ended September 30, 2006 as other income in the consolidated
statements of operations.


                                       18

<PAGE>

Fair Value of Financial Instruments.

The Company's financial instruments consist of cash, accounts receivable,
accounts payable, accrued expenses, notes payable and convertible debentures.
Pursuant to SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments," the Company is required to estimate the fair value of all
financial instruments at the balance sheet date. The Company considers the
carrying values of its financial instruments in the financial statements to
approximate their fair values due to their short maturities and rates currently
available to the Company for similar debt instruments.

Stock-Based Compensation.

The World Am, Inc. Amended and Restated Employee Stock Incentive Plan ("ESIP
Plan"), dated February 7, 2006, is intended to allow designated officers and
employees, and certain non-employees of the Company, to receive options to
purchase common stock, and to receive common stock grants subject to certain
restrictions. The purpose of this plan is to provide employees with equity-based
compensation incentives to make significant and extraordinary contributions to
the long-term performance and growth of the Company, and to attract and retain
employees of exceptional ability. The purchase price of shares under the plan is
$0.015 per share. The option period begins on the date of grant and will not
exceed ten years. The maximum number of shares of stock that may be issued under
this plan is 235,000,000.

It was reported in the last Form 10-KSB, as amended, that as of December 31,
2005, there were 114,076,500 shares of common stock remaining to be issued under
the ESIP Plan (with options representing 13,620,000 shares of common stock being
exercised during the year ended December 31, 2005). The correct number of
options exercised in that year was 12,380,000 and the correct number of shares
remaining to be issued was 115,316,500 as of December 31, 2005.

During the nine months ended September 30, 2006, options representing 12,813,077
shares of common stock were exercised and options representing 10,000,000 shares
of common stock were granted under the ESIP Plan. 63,181,305 shares of common
stock were awarded out of the ESIP Plan during the nine months ended September
30, 2006. As of September 30, 2006, there were 39,322,118 shares of common stock
remaining to be issued under the ESIP Plan.


                                       19

<PAGE>

The World Am, Inc. Amended and Restated Non-Employee Directors and Consultants
Retainer Stock Plan ("Non-Employee Plan"), dated December 22, 2005, is intended
to enable the Company to promote the interests of the Company by attracting and
retaining consultants and independent contractors for the Company capable of
furthering the business of the Company and by aligning their economic interests
more closely with those of the Company's stockholders, by paying their retainer
or fees in the form of shares of common stock or stock options. The maximum
number of shares of stock that may be issued under this plan is 291,000,000.

A total of 5,800,000 shares were issued out of the Non-Employee Plan during the
nine months ended September 30, 2006. As of September 30, 2006, 17,184,363
shares of common stock remain to be issued under the Non-Employee Plan.

All issuances of the Company's stock for non-cash consideration have been
assigned a per share amount equaling either the market value of the shares
issued or the value of consideration received, whichever is more readily
determinable. The majority of the non-cash consideration received pertains to
services rendered by consultants and others and have been valued at the amount
billed by the consultant for services provided.

The Company's accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services follows the provisions of EITF Issue
No. 96-18, "Accounting for Equity Instruments That are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services" and
EITF Issue No. 00-18, "Accounting recognition for Certain Transactions Involving
Equity Instruments Granted to Other Than Employees." The measurement date for
the fair value of the equity instrument issued is determined at the earlier of
(a) the date at which a commitment for performance by the consultant or vendor
is reached or (b) the date at which the consultant or vendor's performance is
complete. In the case of equity instruments issued to consultants, the fair
value of the equity instrument is recognized over the term of the consulting
agreement. In accordance with EITF Issue No. 00-18, an asset acquired in
exchange for the issuance of fully vested, nonforfeitable equity instruments
should not be presented or classified as an offset to equity on the grantor's
balance sheet once the equity instrument is granted for accounting purposes.
Accordingly, the Company will record the fair value of the fully vested
non-forfeitable common stock issued for future consulting services as prepaid
expenses in the consolidated balance sheet.

On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004),
"Share-Based Payment" ("SFAS No. 123 (R)"), which establishes standards for the
accounting of transactions in which an entity exchanges its equity instruments
for goods or services, primarily focusing on accounting for transactions where
an entity obtains employee services in share-based payment transactions. SFAS
No. 123(R) requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments, including stock
options, based on the grant-date fair value of the award and to recognize it as
compensation expense over the period the employee is required to provide service
in exchange for the award, usually the vesting period. SFAS No. 123(R)
supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees" for periods beginning in fiscal 2006. In March 2005,
the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB")
No. 107 relating to SFAS No. 123(R). The Company has applied the provisions of
SAB No. 107 in its adoption of SFAS No. 123(R).


                                       20

<PAGE>

The Company adopted SFAS No. 123(R) using the modified prospective transition
method, which requires the application of the accounting standard as of January
1, 2006, the first day of the Company's fiscal year 2006. The Company's
consolidated financial statements as of and for the three and nine months ended
September 30, 2006 reflect the impact of SFAS No. 123(R). In accordance with the
modified prospective transition method, the Company's consolidated financial
statements for prior periods have not been restated to reflect, and do not
include, the impact of SFAS No. 123(R).

SFAS No. 123(R) requires companies to estimate the fair value of share-based
payment awards on the date of grant using an option-pricing model. The value of
the portion of the award that is ultimately expected to vest is recognized as
expense over the requisite service periods in the Company's consolidated
statement of operations. Prior to the adoption of SFAS No. 123(R), the Company
accounted for stock-based awards to employees and directors using the intrinsic
value method in accordance with APB Opinion No. 25 as allowed under SFAS No.
123, "Accounting for Stock-Based Compensation." Under the intrinsic value
method, no stock-based compensation expense had been recognized in the Company's
consolidated statements of operations, other than as related to option grants to
employees and consultants below the fair market value of the underlying stock at
the date of grant.

Stock-based compensation expense recognized during the period is based on the
value of the portion of share-based payment awards that is ultimately expected
to vest during the period. SFAS No. 123(R) requires forfeitures to be estimated
at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. The forfeiture rate that the Company
presently uses is 0%.

SFAS No. 123(R) requires the cash flows resulting from the tax benefits
resulting from tax deductions in excess of the compensation cost recognized for
those options to be classified as financing cash flows. Due to the Company's
loss position, there were no such tax benefits during the three and nine months
ended September 30, 2006. Prior to the adoption of SFAS No. 123(R), those
benefits would have been reported as operating cash flows had the Company
received any tax benefits related to stock option exercises.

The fair value of each stock-based award is estimated on the grant date using
the Black-Scholes option-pricing model. Expected volatilities are based on the
historical volatility of the Company's stock price. The expected term of options
granted subsequent to the adoption of SFAS No. 123(R) is derived using the
simplified method as defined in the SAB No. 107, "Implementation of FASB
123(R)." The risk-free rate for periods within the contractual life of the
option is based on the U.S. Treasury interest rates in effect at the time of
grant. The fair value of options granted was estimated using the following
weighted-average assumptions:

                                 2006      2005
                               -------   -------
Risk-free interest rate            5.1%      4.0%
Expected life of the options   5 years   5 years
Expected volatility                139%      139%
Expected dividend yield              0%        0%


                                       21

<PAGE>

A summary of option activity under the ESIP Plan and changes during the nine
months ended September 30, 2006 is presented below:

<TABLE>
<CAPTION>
                                                                    September 30, 2006
                                                    -------------------------------------------------
                                                       Weighted-Average
                                                    ----------------------     Remaining    Aggregate
                                                                  Exercise    Contractual   Intrinsic
                                                       Shares      Price     Term (Years)     Value
                                                    -----------   --------   ------------   ---------
<S>                                                 <C>            <C>            <C>          <C>
Outstanding, at December 31, 2005                    66,883,017    $0.015(1)      9.8          $--
Granted                                              10,000,000     0.015         9.8           --
Cancelled/forfeited                                 (62,500,000)
Exercised                                           (12,813,077)    0.015          --           --
                                                    -----------
Outstanding and exercisable at September 30, 2006     1,570,000    $0.015         9.3          $--
                                                    ===========
</TABLE>

(1)   As of December 31, 2005, the exercise price was 80% of the closing price
      on the date of exercise per share. The exercise price was changed to
      $0.015 in the Amended and Restated Employee Stock Incentive Plan dated
      February 7, 2006.

A summary of the activity of the Company's non-vested options is presented
below:

<TABLE>
<CAPTION>
                                                                   September 30, 2006
                                                    -----------------------------------------------
                                                      Weighted-Average                   Remaining
                                                    --------------------   Remaining   Unrecognized
                                                              Grant-Date   Months to   Compensation
                                                     Shares   Fair Value      Vest         Cost
                                                    -------   ----------   ---------   ------------
<S>                                                 <C>         <C>            <C>        <C>
Non-vested outstanding at December 31, 2005         144,000     $ 0.17         37         $2,304
Granted                                                  --         --         --             --
Vested                                              (54,000)    $ 0.17         --          (864)
Forfeited                                                --         --         --             --
                                                    -------                               ------
Non-vested outstanding at September 30, 2006         90,000     $0.017         31         $1,440
                                                    =======                               ======
</TABLE>


                                       22

<PAGE>

Prior to fiscal 2006, the weighted-average fair value of stock-based
compensation to employees was based on the single option valuation approach.
Forfeitures were recognized as they occurred and it was assumed no dividends
would be declared. As all stock options vested immediately, all compensation
expense was recognized on the grant date. Therefore, net loss for the three and
nine months ended September 30, 2005 would not have been different than as
reported.

Net Loss Per Common Share.

The Company computes net income (loss) per share in accordance with SFAS No.
128, "Earnings per Share," and SAB No. 98. Under the provisions of SFAS No. 128
and SAB No. 98, basic net income (loss) per share is computed by dividing the
net income (loss) available to common stockholders for the period by the
weighted average number of shares of common stock outstanding during the period.
The calculation of diluted net income (loss) per share gives effect to common
stock equivalents; however, potential common shares are excluded if their effect
is antidilutive. For the nine months ended September 30, 2006, and the three and
nine months ended September 30, 2005, basic and diluted earnings per share were
the same. Had such shares been included in diluted earnings per share, they
would have resulted in weighted-average common shares of 1,936,974,396 and
414,541,632 for the three and nine months ended September 30, 2006 and 2005,
respectively.

Revenue Recognition.

The Company recognizes revenue in accordance with SAB No. 101, "Revenue
Recognition in Financial Statements," as revised by SAB No. 104. As such, the
Company recognizes revenue when persuasive evidence of an arrangement exists,
title transfer has occurred, the price is fixed or readily determinable and
collectibility is probable.

Sales and manufacture of customized commercial products are recognized under the
percentage-of-completion basis when: (1) contracts executed by the parties
normally include provisions that clearly specify the enforceable rights
regarding goods or service to be provided and received by the parties, the
consideration to be exchanged, and the manner and terms of settlement; (2) the
buyer can be expected to satisfy his obligations under the contract; (3) the
Company can be expected to perform our contractual obligations; and (4) the
Company can make reasonably dependable estimates of costs to complete and the
extent of progress toward completion. The Company measures the extent of
progress toward completion by using a ratio of costs incurred to total estimated
costs. The effects of changes in the estimates, if any, are reported in the
period of change and subsequent periods. Contracts not meeting the above
criteria are reported on the completed contract method. All other sales of
products are recognized upon shipment.

As of September 30, 2006, the Company recorded deferred revenue of $61,347 that
represents progress billings on a contract that was placed on hold in the third
quarter of 2006.

The Company has contracts with various governments and governmental agencies.
Government contracts are subject to audit by the applicable governmental agency.
Such audits could lead to inquiries from the government regarding the
allowability of costs under applicable government regulations and potential
adjustments of contract revenues. To date, the Company has not been involved in
any such audits.


                                       23

<PAGE>

Income Taxes.

The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109, deferred tax assets and
liabilities are recognized for future tax benefits or consequences attributable
to temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. A valuation allowance is provided for significant
deferred tax assets when it is more likely than not that such assets will not be
realized through future operations.

Recent Accounting Pronouncements.

In May 2005, the Financial Accounting Standards Board ("FASB") issued SFAS No.
154, "Accounting Changes and Error Corrections," which replaces APB Opinion No.
20, "Accounting Changes" and SFAS No. 3, "Reporting Accounting Changes in
Interim Financial Statements," and changes the requirements for the accounting
for and reporting of a change in accounting principle. SFAS No. 154 requires
retrospective application to prior periods' financial statements of changes in
accounting principle, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. SFAS No. 154 is
effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005. The adoption of SFAS No. 154 is not expected
to have a material impact on the Company's consolidated financial position or
results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes." This interpretation prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.
This interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. The interpretation is effective for fiscal years beginning after
December 15, 2006. The Company has not yet analyzed the impact this
Interpretation will have on our financial condition, results of operations, cash
flows or disclosures.

In September 2006, the FASB adopted SFAS No. 157, "Fair Value Measurements."
SFAS No. 157 establishes a framework for measuring fair value and expands
disclosure about fair value measurements. Specifically, this standard
establishes that fair value is a market-based measurement, not an entity
specific measurement. As such, the value measurement should be determined based
on assumptions the market participants would using in pricing an asset or
liability, including, but not limited to assumptions about risk, restrictions on
the sale or use of an asset and the risk of nonperformance for a liability. The
expanded disclosures include disclosure of the inputs used to measure fair value
and the effect of certain of the measurements on earnings for the period. SFAS
No. 157 is effective for fiscal years beginning after November 15, 2007. The
Company has not yet determined the effect adoption of SFAS No. 157 will have on
its financial position or results of operations.


                                       24

<PAGE>

NOTE 4 - INVENTORIES

Inventories consist of raw materials totaling $24,219.

NOTE 5 - LICENSE OPTION

Included in other assets is $4,000, representing the cost of an option to enter
into an exclusive, royalty-bearing license of patented technology from the State
University of New York at Buffalo. The Company intends to exercise this option
in order to market an innovative technology in the field of micro-sensor
elements and sensor rays. Senz-It anticipates commercializing and marketing this
technology in the homeland security, indoor air quality, food purity and
processing and medical diagnostic industries.

NOTE 6 - DUE TO STOCKHOLDERS

Due to stockholders totaling $349,604 as of September 30, 2006 consists of
unreimbursed expenses and accrued wages to various stockholders and employees,
including $264,647 that is owed to the Company's former president and chief
executive officer for accrued salary and reimbursement of expenses.
Additionally, a company owned and managed by the former president and chief
executive officer was owed $5,000, and these monies were repaid in the third
quarter 2006. Loans are unsecured, non-interest bearing and due on demand.

The Company also accrued the cost of a finder's fee and other services provided
by a consultant. At September 30, 2006, $70,000 out of the original $204,000 has
not yet been paid.

NOTE 7 - PAYROLL TAXES PAYABLE

As of September 30, 2006, payroll taxes payable consists of late payroll taxes
and estimated accrued interest and penalties for payroll and stock option
activity totaling $366,250. Settlement discussions are presently underway to
resolve this matter.

NOTE 8 - WARRANTS AND CONVERTIBLE DEBENTURES

To obtain funding for ongoing operations, on January 23, 2006, the Company
entered into a Securities Purchase Agreement with Golden Gate Investors, Inc.
("Golden Gate"). Under this agreement, Golden Gate agreed to purchase from the
Company a convertible debenture in the aggregate principal amount of $1,000,000.
The conversion price was equal to the lesser of (i) $0.20, or (ii) 80% of the
average of the 3 lowest volume weighted average prices during the 20 trading
days prior to the election to convert, or (iii) 80% of the volume weighted
average price on the trading day prior to the election to convert.


                                       25

<PAGE>

In conjunction with the debenture, the Company issued to Golden Gate a warrant,
dated January 23, 2006, to purchase 10,000,000 shares of common stock of the
Company, exercisable at $1.00 per share. The Company also issued to Golden Gate
a warrant, dated January 23, 2006, to purchase up to that number of shares of
common stock equal to $2,750,000 divided by 120% of the average of the current
market prices of the common stock for the 20 trading days prior to January 23,
2006, at a price per share equal to the 120% of the average of the current
market price of the common stock for the 20 trading days prior to January 23,
2006.

Under an addendum to the debenture and the warrant (dated February 7, 2006), the
following was amended (among other things): (a) the principal amount of the
debenture was reduced to $100,000; (b) the number of shares into which this
debenture could be converted was changed to equal to the dollar amount of the
debenture being converted multiplied by 110, minus the product of the conversion
price multiplied by 100 times the dollar amount of the debenture being
converted, and the entire foregoing result divided by the conversion price; and
(c) the exercise price of the first warrant was increased to $1.09 per share,
with the warrant exercised in an amount equal to 100 times the amount of the
debenture being converted. With the execution of this addendum, this transaction
was closed.

In connection with this agreement, the Company also granted to Golden Gate
certain rights under a registration rights agreement, dated January 23, 2006, to
the shares to be issued upon conversion of the debenture and the warrants.

Golden Gate provided the Company with an aggregate $150,000 on February 7, 2006,
as follows:

o     $100,000 was disbursed directly to the Company in purchase of the
      Convertible Debenture; and

o     $50,000 was retained for services provided to our company by various
      professionals (this represents a prepayment towards the exercise of $1.09
      warrant).

On June 14, 2006, the parties to the Securities Purchase Agreement agreed that
all of the documents in connection with this transaction were cancelled. The
funds already advanced to the Company are credited against the amounts to be
paid under the new agreements.

The Company entered into a new Securities Purchase Agreement, dated June 19,
2006, with La Jolla Cove Investors, Inc. ("La Jolla Cove"), a company under
common control with Golden Gate. Under this agreement, La Jolla Cove agreed to
purchase from the Company a convertible debenture in the aggregate principal
amount of $500,000. The conversion price is equal to the lesser of (i) $0.20, or
(ii) 80% of the average of the three lowest volume weighted average prices
during the 20 trading days prior to the election to convert, or (iii) 80% of the
volume weighted average price on the trading day prior to the election to
convert. The number of common shares into which this debenture may be converted
is equal to the dollar amount of the debenture being converted multiplied by
eleven, minus the product of the conversion price multiplied by ten times the
dollar amount of the debenture being converted, and the entire foregoing result
shall be divided by the conversion price. However, if the volume weighted
average price is below $0.0005 per share during any ten consecutive trading
days, La Jolla Cove may elect to convert the debenture only, without exercising
the related warrants (in such case, the number of common shares that the holder
receives upon conversion of this debenture will be the amount of the debenture
being converted divided by the conversion price).


                                       26

<PAGE>

Another $125,000 was provided by La Jolla Cove to the Company in July 2006.

The fair value assigned to the conversion feature at September 30, 2006 was
$732,487, of which $457,487 was recorded as interest expense and $275,000 was
recorded as a debt discount and will be amortized to interest expense over the
life of the debenture. Amortization expense charged to operations during the
three and nine months ended September 30, 2006, was $31,579 and $32,896
respectively. Interest accrued on the debenture was $4,266 and $7,808,
respectively, for the three and nine months ended September 30, 2006. The
balance on the debenture, including accrued interest (net of unamortized
discount of $242,105) was $40,704 as of September 30, 2006.

If La Jolla Cove elects to convert a portion of the debenture and, on the day
that the election is made, the volume weighted average price is below $0.01 per
share, the Company will have the right to prepay that portion of the debenture
that the holder elected to convert, plus any accrued and unpaid interest, at
125% of such amount. In the event that the Company elects to prepay that portion
of the debenture, La Jolla Cove will have the right to withdraw its conversion
notice. If, at anytime during the month, the volume weighted average price is
below $0.01 per share, La Jolla Cove will not be obligated to convert any
portion of the debenture during that month.

In conjunction with the debenture, the Company issued to La Jolla Cove a
warrant, dated June 19, 2006, to purchase 5,000,000 shares of common stock of
the Company, exercisable at $1.00 per share. The Company also issued to La Jolla
Cove a warrant, dated June 29, 2006, to purchase up to that number of shares of
common stock equal to $2,750,000 divided by 120% of the average of the closing
prices of the common stock for the 20 trading days prior to June 19, 2006, at a
price per share equal to the 120% of the average of the current market price of
the common stock for the 20 trading days prior to June 19, 2006. The accounting
treatment of the derivatives and warrants require that the Company record
warrants at their fair values as of the inception date of the agreement, which
totaled $2,011,631. At September 30, 2006, the fair value was $1,345,701.

In connection with this transaction, the Company also granted to La Jolla Cove
certain rights under a registration rights agreement, dated June 19, 2006, to
the shares to be issued upon conversion of the debenture and the warrants.

Beginning in the first full calendar month after a registration statement is
declared effective, La Jolla Cove is required to convert at least 10% of the
face value of the debenture per calendar month into common shares of the
Company, provided that the common shares are available, registered and freely
tradable. If La Jolla Cove converts more than 10% of the face value of the
debenture in any calendar month, the excess over 10% is to be credited against
the next month's minimum conversion amount. In the event La Jolla Cove does not
convert at least 10% of the debenture in any particular calendar month, the
Company's remedy will be that the La Jolla Cove will not be entitled to collect
interest on the debenture for that month if the Company gives La Jolla Cove
written notice, at least 5 business days prior to the end of the month, of its
failure to convert the minimum required amount for that month. In the event La
Jolla Cove does not convert at least 10% of the debenture for two consecutive
calendar months, in addition to the penalty set forth in the previous sentence,
the Company may repay, at par, an amount of the debenture equal to two times the
differential between 10% of the face value of the debenture and the amount
actually converted by La Jolla Cove.


                                       27

<PAGE>

Except as discussed above, La Jolla Cove agrees that, beginning in the first
full calendar month after a registration statement is declared effective, it
will exercise at least 10% of the $1.00 warrants per calendar month, provided
that the common shares are available, registered and freely tradable. If La
Jolla Cove exercises more than 10% of this warrant in any calendar month, the
excess over 10% shall be credited against the next month's minimum exercise
amount. In the event La Jolla Cove does not exercise at least 10% of this
warrant in any particular calendar month, it will not be entitled to collect
interest on the debenture for that month if the Company gives La Jolla Cove
written notice, at least 5 business days prior to the end of the month, of its
failure to exercise the minimum required amount for that month.

Under a letter agreement, dated June 22, 2006, the parties agreed to enter into
an additional debenture and warrant to purchase common stock on the same terms
and conditions as the debenture and the 5,000,000 share warrant discussed above.
The parties must enter into the additional debenture and warrant no later than
thirty days after the principal amount of the first debenture is less than
$100,000. In the event that La Jolla Cove fails to enter into the additional
debenture and warrant in accordance with the terms of this paragraph, La Jolla
Cove will pay the Company liquidated damages of $100,000. If the Company does
not want La Jolla Cove to enter into the additional debenture and warrant, the
Company will pay La Jolla Cove liquidated damages of $100,000.

The market value of the Company's common stock significantly impacts the extent
to which the Company may be required or may be permitted to convert the
unrestricted portion of the debenture into shares of the Company's common stock.
The lower the market price of the Company's common stock at the respective times
of conversion, the more shares the Company will need to convert the principal
and interest payments then due on the debenture. If the market price of the
Company's common stock falls below certain thresholds, the Company will be
unable to convert any such repayments of principal and interest into equity, and
the Company will be forced to make such repayments in cash. The Company's
operations could be materially adversely impacted if the Company is forced to
make repeated cash payments on the debenture.

The Company filed a Form SB-2 with the Securities and Exchange Commission
("SEC") on July 13, 2006 to register all the shares underlying the debenture and
warrants. The Company received a comment letter from the SEC in which staff
questions the Company on the use of Rule 415 in the delayed secondary offering
by La Jolla Cove. As a result, the Company has made the determination to
withdraw this registration statement (which was done on October 10, 2006) and
renegotiate the transaction with La Jolla Cove discussed above and refile the
Form SB-2 registration statement in the near future.


                                       28

<PAGE>

NOTE 9 - LINE OF CREDIT

The Company has a line of credit through credit card companies with a combined
credit line up to $7,500 with an annual variable rate. As of September 30, 2006,
the balance on the line of credit totaled $3,791. For financial reporting
purposes, this amount is shown as part of accounts payable and accrued
liabilities in the consolidated balance sheet.

NOTE 10 - NOTES PAYABLE

The Company had a total of $101,943 in notes payable at September 30, 2006.

In April 2005, The Company entered into an accounts receivable factoring and
Security Agreement for up to $75,000 with a financing entity. However, the
account receivable that was used as collateral for the factoring agreement was
not assigned to the lender. When payment from the customer was received, the
factor was not paid, placing the Company in default on the loan. Under the
Settlement Agreement of December 2005, the Company agreed to pay interest at an
annual rate of 18%. At September 30, 2006 the amount owed under the Settlement
Agreement was $42,043.

In April 2005, the Company issued a $30,000 note to an individual. The note is
due on demand, is secured by stock and bears interest at the rate of 8% per
annum. At September 30, 2006, the amount owed, including interest, was $33,400.

The remaining $26,500 of notes payable is due on demand, bears no interest and
are unsecured.

NOTE 11 - FORMER STOCK PLANS

2002 Stock Compensation Plan.

On December 16, 2002, the Company adopted the 2002 Stock Compensation Plan. The
purpose of the plan was to enable the Company to promote the interests of the
Company by attracting and retaining consultants and independent contractors for
the Company capable of furthering the business of the Company by aligning their
economic interests more closely with those of the Company's stockholders and
allowing the Company to pay their retainer or fees in the form of shares of
common stock. All 55,000,000 shares of common stock authorized under this plan
were registered on a Form S-8 filed with the SEC during December 2002. As of
December 31, 2006, there were 1,800,000 shares remaining to be issued under this
plan. All remaining shares were removed from registration on June 27, 2006.

2003 Consultants Stock Compensation Plan

On August 19, 2003, the Company adopted the 2003 Consultants Stock Compensation
Plan. The purpose of the plan was to enable the Company to promote the interests
of the Company by attracting and retaining consultants and independent
contractors for the Company capable of furthering the business of the Company by
aligning their economic interests more closely with those of the Company's
stockholders and allowing the Company to pay their retainer or fees in the form
of shares of common stock or stock options. All 75,000,000 shares of common
stock authorized under this plan were registered under a Form S-8 filed with the
SEC during August 2003. The options were exercisable at a price as determined in
each case by the board of directors, but in no event shall the price be less
than 100% of the fair market value of the shares on the date of grant. As of
December 31, 2005, there were 13,000,000 shares of common stock remaining to be
issued under this plan. All remaining shares were removed from registration on
June 27, 2006.


                                       29

<PAGE>

NOTE 12- SHAREHOLDERS' EQUITY

Preferred Stock.

Class A.

The Company is authorized to issue up to 40 million shares of Class A
convertible preferred stock with a par value of $0.0001 per share. Each share
has a liquidation preference of $1,700 per preferred share. Such amounts shall
be paid on all outstanding Class A preferred shares before any payment shall be
made or any assets distributed to the holders of the common stock or any other
stock of any other series or class-ranking junior to the shares as to dividends
or assets. Each preferred share is convertible into 1,000,000 shares of the
Company's common stock at the option of the holder. Each holder of Class A
preferred stock is entitled to 1,000,000 votes and is entitled to such dividends
as may be declared by the board of directors from time to time.

During June 2004, the Company entered into a loan agreement with a lender
whereby the lender agreed to use its best efforts to provide the Company a loan
in the maximum amount of $2,000,000 subject to certain terms and conditions. The
Company agreed to issue 1,370 shares of Class A preferred stock as collateral on
the loan. The shares were issued in June 2004. The lender did not fund the loan
and accordingly, the Company provided a written demand for the return of the
shares; the certificate for 1,370 shares were returned to the Company and
cancelled.

During May 2005, the lender assigned all rights set forth in the loan agreement
to Coldwater Capital Partners, LLC. On this basis, a certificate for 1,370
shares of Class A preferred stock was issued on June 4, 2005. On July 21, 2005,
the Company authorized that one share of the Class A preferred stock be
converted into 1,000,000 restricted shares of common stock. The Company never
received any funding under this loan agreement. Therefore, in January 2006 the
Company made the determination to cancel the balance of 1,369 shares of Class A
preferred stock (such shares have not yet been cancelled). The Company is
analyzing its alternatives with regard to the 1,000,000 share conversion.


                                       30

<PAGE>

Class B.

The Company is authorized to issue up to 40 million shares of Series B preferred
stock with a par value of $0.0001 per share. To the extent assets are available,
holders of Class B preferred shares have a liquidation preference equal to the
original issue price of the shares of $145,455 per share plus all declared but
unpaid dividends on the Series B preferred shares. Such amounts shall be paid on
all outstanding Class B preferred shares before any payment shall be made or any
assets distributed to the holders of common stock or of any other stock of any
series or class junior to the shares as to dividends or assets, but junior to
Class A preferred shareholders. Each share of Class B preferred stock is
convertible into the greater of (i) 1% of the shares of common stock outstanding
on the date of conversion, after giving consideration to shares issued as a
result of the conversion and any options, warrants or other convertible
securities outstanding and (ii) 7,272,728 shares of common stock. The holders of
these preferred shares shall have the right to vote and cost that number of
votes which the holder would have been entitled to cast had such holder
converted the shares immediately prior to the record date for such vote.

On August, 31, 2005, the Company completed a Share Exchange Agreement with
Senz-It, Inc. Under this agreement, Senz-It became a wholly owned subsidiary of
the Company in exchange for 55 shares of Class B convertible preferred stock
(among other consideration).

Common Stock

The holders of the Company's common stock are entitled to one vote per share of
common shares held.

Common Stock Purchase Warrant

In February 2005, the Company sold three units through a private offering. Each
unit included a warrant that entitled the holder to acquire a specific number of
shares of the Company's common stock. According to the provisions of the
warrant, the holder has the right and privilege to purchase a number of fully
paid and nonassessable shares of the Company's common stock at any time close of
business on February 4, 2008. The number of shares is obtained by dividing the
purchase price of three units by the lowest reported bid price of the Company's
common stock during the 365 day period following the commencement of the pricing
period. As of September 30, 2006, warrants representing 18,078,948 shares of
common stock were exercisable.

From time to time, the Company issues its shares and holds the shares in escrow
on behalf of another party until consummation of certain transactions.
Additionally, there are authorized, but unissued ESIP Plan shares.


                                       31

<PAGE>

Breakdown of shares issued during the nine months ended September 30, 2006:

Exercise of warrants                         30,879,999
Shares issued under the Non-Employee Plan     5,800,000
Options exercises under the ESIP Plan        12,813,077
Shares issued under the ESIP Plan            63,181,305
Shares cancelled                             (4,459,481)
                                            -----------
Total net shares issued                     108,214,900
                                            ===========

NOTE 13- RELATED PARTY TRANSACTIONS

On May 18, 2006, the Company's subsidiary, Isotec, Inc., issued a demand
promissory note in favor of the Company's controlling shareholder, SUTI. Under
the terms of the promissory note, the Company may borrow up to $100,000 to
assist in the ongoing operations of the Company. Principal and interest are due
no later than 30 days following the commencement date. The outstanding principal
amount bears simple interest through the maturity date at a rate equal to 8% of
the loan amount. After an Event of Default (as defined in the promissory note),
all past due principal and, to the extent permitted by applicable law, interest
upon this note is to bear interest at the rate per annum equal to 12%. At
September 30, 2006 the Company owed a total of $9,294; the amount is included in
accounts payable at September 30, 2006.

A Venture Acceleration Agreement ("Agreement") was entered into between Senz-It
and Select University Technologies, Inc. Under the terms of the Agreement,
Senz-It appoints Select University Technologies, Inc. to provide services called
for the in the Agreement and to furnish certain personnel and property as
required. In return, Senz-It agrees to pay a management fee and a performance
fee. The management fee calls for a one-time payment of $100,000 and an annual
fee in the amount of $780,000, payable monthly in the amount of $65,000. The
performance fee is 6% of gross revenue for the first three years of the
Agreement. Thereafter, the performance fee is to be calculated at 15% of
quarterly operating profit (as defined in the Agreement). The performance fee is
to be calculated quarterly. The Agreement becomes effective when Senz-It has the
financial resources to pay the initial management fee, which has yet to occur.

The Company shares office space with Select University Technologies, Inc. The
Company is charged $800 per month, plus operating and administrative expenses.
The total rent and operating expenses charged to the Company for the three and
nine months ended September 30, 2006 was $12,286 and $26,723, respectively.

Included in the stockholder payable account are monies that are owed for
services rendered by various shareholders. Payment of the monies owed these
individuals were made through the issuance of Company common stock. Total
payments to these individuals, made for the nine months ended September 30,
2006, were $222,259.


                                       32

<PAGE>

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Litigation.

(a) On October 25, 2004, a complaint was filed in the United States District
Court, District of Colorado: Mitchell Vince v. Isotec, Inc. and World Am, Inc.
The complaint alleges that Isotec terminated Mr. Vince without cause prior to
the expiration of the term of an alleged employment agreement. The complaint
seeks monetary damages of $240,000. The Company has retained counsel in the
matter and responsive pleadings have been filed.

Management believes the Company has meritorious claims and defenses to the
plaintiffs' claims and ultimately will prevail on the merits. However, this
matter remains in the early stages of litigation and there can be no assurance
as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

(b) On August 2, 2006, a complaint was filed in the District Court of Boulder
County, Colorado: Karen Alexander v. World Am, Inc., Isotec, Inc., Robert A.
Hovee, David J. Barnes, James R. Largent and Ken Jochim. The complaint
principally alleges that World Am, Inc. breached an employment agreement with
the plaintiff by not paying her certain amounts allegedly owing. The Company has
retained counsel in the matter and responsive pleadings have been filed.

Management believes the Company has meritorious claims and defenses to the
plaintiff's claims and ultimately will prevail on the merits. However, this
matter remains in the very early stages of litigation and there can be no
assurance as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

(c) On September 20, 2006, a complaint was filed in the District Court of Adams
County, Colorado: James H. Alexander v. World Am, Inc. The complaint principally
alleges that the Company breached an employment agreement with the plaintiff by
not paying him certain amounts allegedly owing. The Company has retained counsel
in the matter, and responsive pleadings have been filed.

Management believes the Company has meritorious claims and defenses to the
plaintiff's claims and ultimately will prevail on the merits. However, this
matter remains in the very early stages of litigation and there can be no
assurance as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.


                                       33

<PAGE>

Operating Leases

Isotec leases a 4,800 square foot facility with a monthly rent of $3,910 and
common area expenses in Westminster, Colorado. The lease expires December 31,
2011. Rent expense was $12,378 and $39,130 for the three and nine months ended
September 30, 2006.

Distributor Agreements.

The Company has entered into several distributor agreements for distribution of
the Company's products in the United States. These agreements call for the
provision of services to the distributors in exchange for the promotion of the
Company's products. The products are sold to the distributor at a discount from
the list price of 15% to 25%.

In addition, the Company has alliance agreements to assist the Company in
establishing international distributorships. The agreements have one-year terms,
expiring between December 2006 and June 2007. The Company will pay the party to
the contract a commission of 10% of license fees and 5% of product sales on all
sales in the designated countries until such time as the distributors no longer
represent the Company.

Indemnities and Guarantees

During the normal course of business, the Company has made certain indemnities
and guarantees under which it may be required to make payments in relation to
certain transactions. These indemnities include certain agreements with the
Company's officers under which the Company may be required to indemnify such
persons for liabilities arising out of their employment relationship, lease
agreements where the Company may be required to indemnify landlords for damages
arising from non-compliance with environmental laws, contracts where the Company
may be required to indemnify the other party from liabilities resulting from
claimed infringements of the proprietary rights of third parties or
confidentiality provisions and the La Jolla Cove agreement where the Company may
be required to indemnify La Jolla Cove for breach of representation or warranty.
The duration of these indemnities and guarantees varies, and in certain cases,
is indefinite.

The majority of these indemnities and guarantees do not provide for any
limitation of the maximum potential future payments the Company would be
obligated to make. Historically, the Company has not been obligated to make
significant payments for these obligations and no liability has been recorded
for these indemnities in the accompanying consolidated balance sheet.

NOTE 15 - RECEIVABLE RELATED TO ISSUANCE OF COMMON STOCK

During May 2004, the Company entered into a Share Exchange Agreement (the
"Exchange Agreement") with World Am Security Venture Company, Ltd. ("WSVC"), a
privately held China corporation. The Company recorded a receivable totaling
$220,000 in anticipation that the remaining terms of the Exchange Agreement
would be fulfilled. During the third quarter 2006, the Company received formal
notification that WSVC considered the Shares Exchange Agreement to be null and
void. Consequently, the receivable related to stock issuance was reversed
against additional paid-in capital.


                                       34

<PAGE>

NOTE 16 - SUBSEQUENT EVENTS

Stock Issuances.

(1)   On October 10, 2006, the Company issued 22,362,000 free trading shares of
      common stock for services rendered by consultants valued at $ 111,810
      ($0.005 per share).

(2)   On October 10, 2006, the Company issued 1,587,594 free trading shares of
      common stock as payment of compensation owed employees valued at $7,938
      ($0.005 per share).

(3)   On October 13, 2006 the Company issued 264,920 free trading shares of
      common stock as payment of compensation owed employees valued at $1,325
      ($0.005 per share).

(4)   On October 16, 2006, the Company issued 3,396,774 restricted shares of
      common stock to an optionee for a stock option that was issued on July 28,
      2005. The shares were valued at $18,871 ($0.005 per share).

(5)   On October 30, 2006, the Company issued 1,750,787 free trading shares of
      common stock as payment of compensation owed employees values at $7,879
      ($0.0045 per share).

(6)   On November 1, 2006, the Company issued 188,342 free trading shares of
      common stock as payment of compensation owed employees valued at $791
      ($0.0042 per share).

Private Placement.

On October 11, 2006, the Company commenced a private offering of up to 30 units
at a price of $25,000 per unit (each unit consists of 5,000,000 shares of common
stock and a warrant to purchase 1,250,000 shares of common stock). No units have
been sold to date.


                                       35

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

      The following discussion and analysis of financial condition and results
of operations of the Company is based upon, and should be read in conjunction
with, its unaudited consolidated financial statements and related notes included
elsewhere in this Form 10-QSB, which have been prepared in accordance with
accounting principles generally accepted in the United States.

      On August 31, 2005, the Company consummated an agreement to acquire all of
the issued and outstanding capital stock of Senz-It, Inc. ("Senz-It") from SUTI
Holdings, LP ("SUTI"), in exchange for 55 shares of the Company's Class B
preferred stock and a warrant for 18,000,000 shares of common stock. The
exercise price of the common shares under these warrants is $0.0001 per share.
The warrants vest immediately and expire on August 31, 2010. Each share of Class
B preferred stock is convertible into the greater of 1% of the outstanding
common shares of the Company, including the common stock equivalents of all
unexercised warrants, options and convertible securities, or 7,272,728 shares of
common stock. Each share of Class B preferred stock is entitled to the number of
votes to which the holder would be entitled if it had converted its shares of
Class B preferred stock at the time of voting.

      According to the terms of the acquisition agreement, the warrants and the
preferred stock were issued upon the closing of this transaction on August 31,
2005. Under the terms of this agreement, the Company is obligated, among other
things, to raise capital in the amount of $4,000,000 to support the product
development of Senz-It by June 30, 2006, which may be extended by mutual
agreement. If sufficient funds are not raised, SUTI has the right to rescind the
acquisition agreement. The parties have agreed to an open ended extension of the
latter date to allow the Company to raise such funds.

      Under this agreement, SUTI is entitled to select three directors for the
Company's board of directors. As of June 20, 2005, Select University
Technologies, Inc., the general partner of SUTI, was hired to manage all
operations of Senz-It under the terms of a Venture Acceleration Agreement (see
Exhibit 10.7).

      Though this transaction is not yet effective, Senz-It intends to exercise
the option it holds to enter into an exclusive, royalty-bearing license with the
State University of New York at Buffalo (see Exhibit 10.6). This license will
cover patents developed by that university that will enable Senz-It to develop
technology with an entirely new approach to sensing and process monitoring,
homeland security and environmental scanning applications. When executed, this
license agreement will be disclosed in a Form 8-K.

      Fundraising efforts will continue during the last part of 2006 to move
Senz-It to an engineering prototype phase. The technology represented by Senz-It
is an innovative advancement in the field of micro-sensors that has applications
in homeland security, indoor air quality monitoring, food processing and health
care. The products are in the developing field of "electronic noses" and can
identify patterns of molecules present in air or liquid environments for
significantly less cost than current approaches.


                                       36

<PAGE>

      Prior to the transaction discussed above, the Company was a public company
with assets of $88,656, liabilities totaling $1,084,612, and 66,570,285 shares
of common stock issued and outstanding; Senz-It was a privately-held,
non-operating development stage company. The transaction is considered to be a
capital transaction in substance, rather than a business combination. Inasmuch,
the transaction is equivalent to the issuance of stock by a development stage
company (Senz-It) for the net monetary assets of a public company (World Am,
Inc.), accompanied by a recapitalization. The accounting for the transaction is
identical to that resulting from a reverse acquisition, except goodwill and
other intangible assets were not recorded. No goodwill was recognized because in
the judgment of Company management, no goodwill could be associated with the
operations of the Company. Accordingly, these consolidated financial statements
are the historical financial statements of Senz-It (incorporated on March 4,
2005).

Overview.

      Isotec has developed and or is in the process of developing innovative
systems and processes in the field of "Transparent Security" and "Automated
Passage Control." Company personnel have installed systems for Los Alamos Labs,
Lawrence Livermore Labs, Mellon Bank, Wells Fargo Bank, Union Bank, the United
States Air Force and United States Department of Energy, among others. The
principal markets for the products and services remain government and financial
institutions.

      The Company believes that its planned growth and profitability will depend
in large part on the ability to promote its services, gain clients and expand
its relationship with current clients. Accordingly, the Company intends to focus
its attention and investment of resources in marketing, strategic partnerships,
and development of its client base. In addition to development of our own
products and services, we have broadened our product offering by becoming
distributors of additional products in our core marketplace in order to generate
additional revenues. If the Company is not successful in promoting its services
and expanding its client base, this may have a material adverse effect on its
financial condition and the ability to continue to operate the business.

      From the last reporting period Isotec has upgraded its website, completed
a new TurboCad software training program and completed a School Safety Access
Control product. They have already received an order from one of the two new
domestic distributors. Of the five new international distributors a training
program in Colorado was initiated and orders are expected in the near future. A
scale model portal was designed and built. A new sales and marketing manager was
hired. The Isotec group is executing to plan.

      On the Senz-It side, three memorandums of understanding were signed with
experts in their respective areas of target analyte collection, precision
electro-optical reader systems and proprietary software to recognize light
patterns. Also, the Director of New Business Development was appointed the
Chairman of the American Public Transportation Authority (APTA) committee on
buses and trains to author detection standards. Senz-It continues to apply for
developments grants.


                                       37

<PAGE>

      The Company believes its future growth and overall success will be
dependent upon its ability to develop the patent protected technology
represented by Senz-It.

Results of Operations.

      Senz-It was incorporated in the State of California on March 4, 2005.
There is no historic financial information prior to March 31, 2005 and only very
limited activity between that date and June 30, 2005.

(a) Revenues.

      The Company had revenues of $135,469 and $208,006 for the three and nine
months ended September 30, 2006 compared with $36,926 and $36,926 for the
comparable periods in the prior year. The increase in revenue in the third
quarter and for the nine months ended September 30, 2006 is due to contract
received from a government prime contractor. Revenues for the period from March
4, 2005 (inception) through September 30, 2006 were $420,779.

(b) Cost of Revenues.

      The Company had cost of revenues of $77,841 and $109,284 for the three and
nine months ended September 30, 2006 compared to $14,593 and $14,593 for the
comparable periods for the prior year. The increase in cost of sales in the
third quarter and for the nine months ended September is due to the increased
level of sales for the period. Cost of revenues for the period from March 4,
2005 (inception) through September 30, 2006 were $225,068.

(c) General and Administrative Expenses.

      The Company incurred general and administrative expenses of $341,782 and
$1,111,102 for the three and nine months ended September 30, 2006 compared to
$212,391 and $223,663 for the comparable periods of the prior year. General and
administrative expenses for the period from March 4, 2005 (inception) through
September 30, 2006 were $1,898,592. The major expenses incurred during the nine
months ended September 30, 2006 were:

                                       Nine months ended
                                      September 30, 2006
                                      ------------------
               Professional Fees          $443,262
               Payroll Expenses           $273,981
               Compensation Expense       $ 89,106
               Rent                       $ 39,131
               Warrant Expense            $ 27,788


                                       38

<PAGE>

The increase in 2006 over the comparable period in 2005 resulted from an
increase in 2006 of shares issued for services.

(d) Income Taxes.

      At December 31, 2005, the Company had a net operating loss carryforward of
approximately $11,000,000. Realization of deferred tax assets is dependent upon
future earnings, if any, the timing and amount of which are uncertain.
Accordingly, the net deferred tax assets have been fully offset by a valuation
allowance. These carryforwards, if not utilized to offset taxable income will
expire in various periods through 2025. Such losses may not be fully deductible
due to significant amounts of non-cash service costs and the change in ownership
rules under Section 382 of the Internal Revenue Code. The company has
established a valuation allowance for the full tax benefit of the operating loss
carryovers dues to the uncertainty regarding realization.

(e) Other Income (Expense).

      Total other income (expense) was $754,863 for the three months ended
September 30, 2006 and $(1,603,226) for the nine months ended September 30,2006.
The reason that the Company reported other income for the three months ended
September 30, 2006 was the reduction in the fair value of the derivative and
warrant liabilities that was caused by the continued lowering of the Company's
common stock price. The reason that the Company reported other (expense) for the
nine months ended September 30, 2006 was the recording of the derivative and
warrant liabilities in the second quarter. This amount was reduced in the third
quarter because of the continuing decrease in the Company's common stock price.

(f) Net Income (Loss).

      The Company had net income of $470,709 for the three months ended
September 30, 2006 and a net loss of $(2,615,606) for nine months ended
September 30, 2006, compared to net losses of $(193,898) and $(205,169) for the
three and nine months ended September 30, 2005. The net loss for the period from
March 4, 2005 (inception) through September 30, 2006 was $3,328,610. The net
income for the three months ended September 30, 2006 was the result of a
decrease in the fair value of the derivative and warrant liabilities from the
second quarter of 2006. The decrease in the fair value was due to a decline in
the price of the Company's common stock, which makes conversion of the
debentures and exercise of the warrants less attractive. The net loss for the
nine months ended September 30, 2006 mainly resulted from interest expense
recorded in connection with the conversion and other derivatives and the
warrants associated with the convertible debt in 2006.


                                       39

<PAGE>

Factors That May Affect Operating Results.

      The operating results of the Company can vary significantly depending upon
a number of factors, many of which are outside its control. General factors that
may affect the Company's operating results include:

o     market acceptance of and changes in demand for products and services;

o     consolidation in the dealer channel;

o     a small number of customers account for, and may in future periods account
      for, substantial portions of the Company's revenue, and revenue could
      decline because of delays of customer orders or the failure to retain
      customers;

o     gain or loss of clients or strategic relationships;

o     announcement or introduction of new services and products by the Company
      or by its competitors;

o     the ability to build brand recognition;

o     timing of sales to customers;

o     the ability to upgrade and develop systems and infrastructure to
      accommodate growth;

o     the ability to introduce and market products and services in accordance
      with market demand;

o     changes in governmental regulation; and

o     reduction in or delay of capital spending by clients due to the effects of
      terrorism, war and political instability.

      The Company believes that its planned growth and profitability will depend
in large part on the ability to promote its services, gain clients and expand
its relationship with current clients. Accordingly, the Company intends to
invest in marketing, strategic partnerships, and development of its client base.
If the Company is not successful in promoting its services and expanding its
client base, this may have a material adverse effect on its financial condition
and the ability to continue to operate the business.

      The Company is also subject to the following specific factors that may
affect its operating results:

(a) The Company May Not Be Able To Accommodate Rapid Growth Which Could Decrease
Revenues And Result In A Loss Of Customers.


                                       40

<PAGE>

      The Company has developed innovative systems and processes to establish
itself as a factor in the field of "Transparent Security" and "Automated Passage
Control", and has installed systems for such locations as Los Alamos Labs,
Lawrence Livermore Labs, Mellon Bank, Wells Fargo Bank, Union Bank, the United
States Air Force and United States Department of Energy. To manage anticipated
growth, we must continue to implement and improve our operational, financial and
management information systems. The Company must also hire, train and retain
additional qualified personnel, continue to expand and upgrade core
technologies, and effectively manage relationships with end users, suppliers and
other third parties. Our expansion could place a significant strain on current
services and support operations, sales and administrative personnel, capital and
other resources. The Company could also experience difficulties meeting demand
for our services. The Company cannot guaranty that our systems, procedures or
controls will be adequate to support operations, or that management will be
capable of fully exploiting the market. Our failure to effectively manage growth
could adversely affect our business and financial results.

(b) Protection of Proprietary Rights May Affect Our Success and Ability to
Compete.

      The Company's success and ability to compete will be dependent in part on
the protection of our potential patents, trademarks, trade names, service marks
and other proprietary rights. We intend to rely on trade secret and copyright
laws to protect the intellectual property that we plan to develop, but there can
be no assurance that such laws will provide sufficient protection to us, that
others will not develop products that are similar or superior to ours, or that
third parties will not copy or otherwise obtain and use our proprietary
information without authorization. In addition, certain of our know-how and
proprietary technology may not be patentable.

      The Company may rely on certain intellectual property licensed from third
parties, and may be required to license additional products or services in the
future, for use in the general operations of its business plan. There can be no
assurance that these third party licenses will be available or will continue to
be available to us on acceptable terms or at all. The inability to enter into
and maintain any of these licenses could have a material adverse effect on our
business, financial condition or operating results.

      There is a risk that some of our products may infringe the proprietary
rights of third parties. In addition, whether or not our products infringe on
proprietary rights of third parties, infringement or invalidity claims may be
asserted or prosecuted against it and it could incur significant expense in
defending them. If any claims or actions are asserted against the Company, it
may be required to modify its products or seek licenses for these intellectual
property rights. We may not be able to modify our products or obtain licenses on
commercially reasonable terms, in a timely manner or at all. Our failure to do
so could have a negative affect on its business and revenues.

(c) Dependence on Suppliers May Affect Our Ability to Conduct Business.

      The Company depends upon a number of suppliers for components of its
products. There is an inherent risk that certain components of our products will
be unavailable for prompt delivery or, in some cases, discontinued. The Company
has only limited control over any third-party manufacturer as to quality
controls, timeliness of production, deliveries and various other factors. Should
the availability of certain components be compromised, it could force the
Company to develop alternative designs using other components, which could add
to the cost of goods sold and compromise delivery commitments. If we are unable
to obtain components in a timely manner, at an acceptable cost, or at all, we
may need to select new suppliers, redesign or reconstruct processes used to
build its devices. In such an instance, the Company would not be able to
manufacture any devices for a period of time, which could materially adversely
affect its business, results from operations, and financial condition.


                                       41

<PAGE>

(d) The Company Faces Strong Competition in the Market, Which Could Make It
Difficult for It to Generate Income

      The market for the Company's products is competitive. Future success will
depend on our ability to adapt to rapidly changing technologies, evolving
industry standards, product offerings and evolving demands of the marketplace.

      Some competitors have:

o     longer operating histories;

o     larger customer bases;

o     greater name recognition and longer relationships with clients; and

o     significantly greater financial, technical, marketing, public relations
      and managerial resources than the Company.

      Competitors may develop or offer services that provide significant
technological, creative, performance, price or other advantages over the
products offered by the Company. If we fail to gain market share or lose
existing market share, our financial condition, operating results and business
could be adversely affected and the value of the investment in the Company could
be reduced significantly. We may not have the financial resources, technical
expertise or marketing, distribution or support capabilities to compete
successfully.

(e) The Company Could Fail To Develop New Products To Compete in this Industry
of Rapidly Changing Technology, Resulting in Decreased Revenue

      The markets in which the Company competes are characterized by rapid
technological change, frequent new product introductions, evolving industry
standards and changing needs of customers. There can be no assurance that our
existing products will continue to be properly positioned in the market or that
we will be able to introduce new or enhanced products into the market on a
timely basis, or at all. Currently, the Company is focusing on upgrading and
introducing new products. There can be no assurance that enhancements to
existing products or new products will receive customer acceptance. As
competition in the electronic payments industry increases, it may become
increasingly difficult for the Company to be competitive.

      Risks associated with the development and introduction of new products
include delays in development and changes in payment processing, and operating
system technologies that could require the Company to modify existing products.
There is also the risk to the Company that there may be delays in initial
shipments of new products. Further risks inherent in new product introductions
include the uncertainty of price-performance relative to products of
competitors, competitors' responses to the introductions and the desire by
customers to evaluate new products for longer periods of time.


                                       42

<PAGE>

(f) New Versions of the Company's Products May Contain Errors or Defects, Which
Could Affect Its Ability to Compete.

      The Company's products are complex and, accordingly, may contain
undetected errors or failures when first introduced or as new versions are
released. This may result in the loss of, or delay in, market acceptance of our
products. The Company may in the future discover errors and additional
scalability limitations in new releases or new products after the commencement
of commercial shipments or be required to compensate customers for such
limitations or errors. As a result, our business, cash flow, financial
condition and results of operations could be materially adversely affected.

(g) The Company's Ability to Grow is Directly Tied to Its Ability to Attract and
Retain Customers. Failure to Attract New Customers Could Result in Reduced
Income.

      The Company has no way of predicting whether its marketing efforts will be
successful in attracting new business and acquiring substantial market share. If
our marketing efforts fail, we may fail to attract new customers and fail to
retain existing ones, which would adversely affect our business and financial
results.

(h) If Government Regulation of Our Business Changes, the Company May Need to
Change the Manner in Which It Conducts Business, or Incur Greater Operating
Expenses.

      The adoption or modification of laws or regulations relating to our
business could limit or otherwise adversely affect the manner in which we
currently conduct our business. If the Company is required to comply with new
regulations or legislation or new interpretations of existing regulations or
legislation, this compliance could cause us to incur additional expenses or
alter our business model.

      The manner in which legislation may be interpreted and enforced cannot be
precisely determined and may subject either us or our customers to potential
liability, which in turn could have an adverse effect on our business, results
of operations and financial condition.

(i) The Company's Success Is Largely Dependent on the Abilities of Its
Management and Employees.

      The Company's success is largely dependent on the personal efforts and
abilities of its senior management. The loss of certain members of the Company's
senior management, including its chief executive officer, could have a material
adverse effect on our business and prospects. The Company intends to recruit in
fiscal year 2006 employees who are skilled in its industry. The failure to
recruit these key personnel could have a material adverse effect on our
business. As a result, we may experience increased compensation costs that may
not be offset through either improved productivity or higher revenue. There can
be no assurances that we will be successful in retaining existing personnel or
in attracting and recruiting experienced qualified personnel.


                                       43

<PAGE>

(j) Any Required Expenditures as a Result of Indemnification Will Result in a
Decrease of Our Net Income.

      The Company's articles of incorporation include provisions to the effect
that we may indemnify any director, officer, or employee. In addition,
provisions of Nevada law provide for such indemnification, as well as for a
limitation of liability of our directors and officers for monetary damages
arising from a breach of their fiduciary duties. Any limitation on the liability
of any director or officer, or indemnification of any director, officer, or
employee, could result in substantial expenditures being made by us in covering
any liability of such persons or in indemnifying them.

Operating Activities.

      The net cash used in operating activities was $252,816 for the nine months
ended September 30, 2006, compared to cash provided by operating activities in
the amount of $13,123 for nine months ended September 30, 2005 and net cash used
in operating activities in the amount of $580,258 for the period from March 4,
2005 (inception) through September 30, 2006. The principal cause for the net
cash used in operations was a net loss of $2,615,606, offset by the initial fair
value of, and change in, fair value of derivative and warrant liabilities of
$1,544,076, stock issued for services in the amount of $487,301, an increase in
accounts payable and accrued liabilities of $209,642 and an increase in payroll
taxes payable of $69,526.

Investing Activities.

      Net cash used in investing activities was $651 for the nine months ended
September 30, 2006 (which was composed of fixed asset acquisition), compared to
cash provided by investing activities of $935 for nine months ended September
30, 2005 and $284 for the period from March 4, 2005 (inception) through
September 30, 2006.

Financing Activities.

      For the nine months ended September 30, 2006, the net cash provided by
financing activities totaled $258,438. The net cash, primarily, came from the
sale of common stock and from the sale of a debenture.


                                       44

<PAGE>

Liquidity and Capital Resources.

(a) General Discussion.

      As of September 30, 2006, the Company had total current assets of $104,959
and total current liabilities of $1,359,283, resulting in a working capital
deficit of $1,254,324. At September 30, 2006, the Company's assets consisted
primarily of accounts receivable ($65,366), inventory ($24,219) and cash
($15,364). During the period from March 4, 2005 (inception) through September
30, 2006, the Company incurred a net loss of $3,216,110, and incurred a net loss
of $2,615,606 for the nine months ended September 30, 2006. The Company had an
accumulated deficit of $4,212,068 as of September 30, 2006.

      These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. The Company's Report of Independent
Registered Public Accounting Firm included in the Form 10-KSB, as amended, for
the year ended December 31, 2005 includes an explanatory paragraph regarding
doubt about the Company's ability to continue as a going concern.

      The consolidated financial statements included in this Form 10-QSB have
been prepared assuming that the Company continues as a going concern and
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. However, the ability of the Company to continue
as a going concern on a longer-term basis will be dependent upon its ability to
generate sufficient cash flow from operations to meet its obligations on a
timely basis, to retain its current financing, to obtain additional financing,
and ultimately attain profitability.

      The Company's current cash flow from operations will not be sufficient to
maintain its capital requirements for the next twelve months. The Company
believes it will need to raise up to $5,000,000 during the next twelve months so
it may continue executing its business plans. Whereas the Company has in the
past raised capital (in the absence of any equity investment, the Company has
previously relied upon short-term borrowings in the form of purchase order and
invoice factoring), no assurance can be given that these sources of financing
will continue to be available to the Company and/or that demand for our
equity/debt instruments will be sufficient to meet its capital needs, or that
financing will be available on terms favorable to the Company. The financial
statements do not include any adjustments relating to the recoverability of
assets and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

      If funding is insufficient at any time in the future, the Company may not
be able to take advantage of business opportunities or respond to competitive
pressures, or may be required to reduce the scope of its planned product
development and marketing efforts, any of which could have a negative impact on
its business, operating results and financial condition. In addition,
insufficient funding may have a material adverse effect on the Company's
financial condition, which could require it to:

o     curtail operations significantly;


                                       45

<PAGE>

o     sell significant assets;

o     seek arrangements with strategic partners or other parties that may
      require the Company to relinquish significant rights to products,
      technologies or markets; or

o     explore other strategic alternatives including a merger or sale of the
      Company.

      To the extent that the Company raises additional capital through the sale
of equity or convertible debentures, the issuance of such securities may result
in dilution to existing stockholders. If additional funds are raised through the
issuance of convertible debentures, these securities may have rights,
preferences and privileges senior to holders of common stock and the terms of
such debt could impose restrictions on the Company's operations. Regardless of
whether the Company's cash assets prove to be inadequate to meet the Company's
operational needs, the Company may seek to compensate providers of services by
issuance of stock in lieu of cash, which may also result in dilution to existing
shareholders.

(b) La Jolla Cove Investors, Inc./Golden Gate Investors, Inc.

      On January 23, 2006, the Company entered into a Securities Purchase
Agreement with Golden Gate Investors, Inc. (see Exhibit 4.1). Under this
agreement, Golden Gate agreed to purchase from the Company a convertible
debenture in the aggregate principal amount of $1,000,000 (see Exhibit 4.2). The
conversion price is equal to the lesser of (i) $0.20, or (ii) 80% of the average
of the 3 lowest volume weighted average prices during the 20 trading days prior
to the election to convert, or (iii) 80% of the volume weighted average price on
the trading day prior to the election to convert.

      In conjunction with the debenture, the Company issued to Golden Gate a
warrant, dated January 23, 2006, to purchase 10,000,000 shares of common stock
of the Company, exercisable at $1.00 per share (see Exhibit 4.3). The Company
also issued to Golden Gate a warrant, dated January 23, 2006, to purchase up to
that number of shares of common stock equal to $2,750,000 divided by 120% of the
average of the current market prices of the common stock for the 20 trading days
prior to January 23, 2006, at a price per share equal to the 120% of the average
of the current market price of the common stock for the 20 trading days prior to
January 23, 2006 (see Exhibit 4.4).

      Under an addendum to the debenture and the warrant (dated February 7,
2006), the following was amended (among other things): (a) the principal amount
of the debenture was reduced to $100,000; (b) the number of shares into which
this debenture may be converted was changed to equal to the dollar amount of the
debenture being converted multiplied by 110, minus the product of the conversion
price multiplied by 100 times the dollar amount of the debenture being
converted, and the entire foregoing result divided by the conversion price; and
(c) the exercise price of the first warrant was increased to $1.09 per share,
with the warrant exercised in an amount equal to 100 times the amount of the
debenture being converted (see Exhibit 4.6). With the execution of this
addendum, this transaction was closed.


                                       46

<PAGE>

      In connection with this agreement, the Company also granted to Golden Gate
certain rights under a registration rights agreement, dated January 23, 2006, to
the shares to be issued upon conversion of the debenture and the warrants (see
Exhibit 4.5).

      Golden Gate provided the Company with an aggregate $150,000 on February 7,
2006, as follows:

o     $100,000 was disbursed directly to the Company; and

o     $50,000 has been retained for services provided to the Company by various
      professionals (this represents a prepayment towards the exercise of $1.09
      warrant).

      On June 14, 2006, the parties to the Securities Purchase Agreement agreed
that all of the documents in connection with this transaction are to be
cancelled (see Exhibit 4.7). The funds already advanced to the Company are
credited against the amounts to be paid under the new agreements.

      The Company entered into a new Securities Purchase Agreement, dated June
19, 2006, with La Jolla Cove Investors, Inc., a company under common control
with Golden Gate Investors, Inc. (see Exhibit 4.8). Under this agreement, La
Jolla Cove agreed to purchase from the Company a convertible debenture in the
aggregate principal amount of $500,000 (see Exhibit 4.9). The conversion price
is equal to the lesser of (i) $0.20, or (ii) 80% of the average of the three
lowest volume weighted average prices during the 20 trading days prior to the
election to convert, or (iii) 80% of the volume weighted average price on the
trading day prior to the election to convert. The number of common shares into
which this debenture may be converted is equal to the dollar amount of the
debenture being converted multiplied by eleven, minus the product of the
conversion price multiplied by ten times the dollar amount of the debenture
being converted, and the entire foregoing result shall be divided by the
conversion price; provided, however, if the volume weighted average price is
below $0.0005 per share during any ten consecutive trading days, La Jolla Cove
may elect to convert this debenture only, without exercising the related
warrants (in such case, the number of common shares that the holder receives
upon conversion of this debenture will be the amount of the debenture being
converted divided by the conversion price).

      Another $125,000 was provided by La Jolla Cove to the Company in July
2006.

      If La Jolla Cove elects to convert a portion of the debenture and, on the
day that the election is made, the volume weighted average price is below $0.01
per share, the Company will have the right to prepay that portion of the
debenture that the holder elected to convert, plus any accrued and unpaid
interest, at 125% of such amount. In the event that the Company elects to prepay
that portion of the debenture, La Jolla Cove will have the right to withdraw its
conversion notice. If, at anytime during the month, the volume weighted average
price is below $0.01 per share, La Jolla Cove will not be obligated to convert
any portion of the debenture during that month.


                                       47

<PAGE>

      In conjunction with the debenture, the Company issued to La Jolla Cove a
warrant, dated June 19, 2006, to purchase 5,000,000 shares of common stock of
the company, exercisable at $1.00 per share (see Exhibit 4.10). The Company also
issued to La Jolla Cove a warrant, dated June 19, 2006, to purchase up to that
number of shares of common stock equal to $2,750,000 divided by 120% of the
average of the closing prices of the common stock for the 20 trading days prior
to June 19, 2006, at a price per share equal to the 120% of the average of the
current market price of the common stock for the 20 trading days prior to June
19, 2006 (see Exhibit 4.11).

      In connection with this transaction, the Company also granted to La Jolla
Cove certain rights under a registration rights agreement, dated June 19, 2006,
to the shares to be issued upon conversion of the debenture and the warrants
(see Exhibit 4.12).

      Beginning in the first full calendar month after a registration statement
is declared effective, La Jolla Cove is required to convert at least 10% of the
face value of the debenture per calendar month into common shares of the
Company, provided that the common shares are available, registered and freely
tradable. If La Jolla Cove converts more than 10% of the face value of the
debenture in any calendar month, the excess over 10% is to be credited against
the next month's minimum conversion amount. In the event La Jolla Cove does not
convert at least 10% of the debenture in any particular calendar month, the
Company's remedy will be that the La Jolla Cove will not be entitled to collect
interest on the debenture for that month if the Company gives La Jolla Cove
written notice, at least 5 business days prior to the end of the month, of its
failure to convert the minimum required amount for that month. In the event La
Jolla Cove does not convert at least 10% of the debenture for two consecutive
calendar months, in addition to the penalty set forth in the previous sentence,
the Company may repay, at par, an amount of the debenture equal to two times the
differential between 10% of the face value of the debenture and the amount
actually converted by La Jolla Cove.

      Except as discussed above, La Jolla Cove agrees that, beginning in the
first full calendar month after a registration statement is declared effective,
it will exercise at least 10% of the $1.00 warrants per calendar month, provided
that the common shares are available, registered and freely tradable. If La
Jolla Cove exercises more than 10% of this warrant in any calendar month, the
excess over 10% shall be credited against the next month's minimum exercise
amount. In the event La Jolla Cove does not exercise at least 10% of this
warrant in any particular calendar month, it will not be entitled to collect
interest on the debenture for that month if the Company gives La Jolla Cove
written notice, at least 5 business days prior to the end of the month, of its
failure to exercise the minimum required amount for that month.

      Under a letter agreement, dated June 22, 2006, the parties agreed to enter
into an additional debenture and warrant to purchase common stock on the same
terms and conditions as the debenture and the 5,000,000 share warrant discussed
above. The parties must enter into the additional debenture and warrant no later
than thirty days after the principal amount of the first debenture is less than
$100,000. In the event that La Jolla Cove fails to enter into the additional
debenture and warrant in accordance with the terms of this paragraph, La Jolla
Cove will pay the Company liquidated damages of $100,000. If the Company does
not want La Jolla Cove to enter into the additional debenture and warrant, the
Company will pay La Jolla Cove liquidated damages of $100,000.


                                       48

<PAGE>

      La Jolla Cove has contractually agreed under the transaction document to
restrict its ability to convert the debentures or exercise the warrants and
receive shares of common stock such that the number of shares of common stock
held by them and their affiliates after such conversion or exercise does not
exceed 9.99% of the then issued and outstanding shares of common stock of the
Company.

      The Company filed a Form SB-2 with the Securities and Exchange Commission
("SEC") on July 13, 2006 to register all the shares underlying the debenture and
warrants. The Company received a comment letter from the SEC in which staff
questions the Company on the use of Rule 415 in the delayed secondary offering
by La Jolla Cove. Basically, the SEC is no longer permitting Rule 415 shelf
offerings done on a secondary basis where the number of shares to be registered
on behalf of a selling shareholder exceeds the number of outstanding shares of
the company. The SEC now is basically ignoring the ownership caps in such
transactions, such as the 9.99% cap under the La Jolla Cove debenture and
warrants, and taking the position that such a selling stockholder is a de-facto
affiliate of the company, and, therefore, the purported secondary delayed
offering by the company is a de-facto primary delayed offering by the company
(which the Company is not permitted to do since it is not Form S-3 eligible).
Under the current view of the SEC, only about 35% of the outstanding shares of a
company can be registered under any one Form SB-2. As a result, the Company has
made the determination to withdraw this registration statement (which was done
on October 10, 2006) and renegotiate the transaction with La Jolla discussed
above and refile the Form SB-2 registration statement in the near future.

Off Balance Sheet Arrangements.

      The Company does not engage in any off balance sheet arrangements that are
reasonably likely to have a current or future effect on our financial condition,
revenues, results of operations, liquidity or capital expenditures.

Inflation.

      The impact of inflation on our costs and the ability to pass on cost
increases to its customers over time is dependent upon market conditions. We are
not aware of any inflationary pressures that have had any significant impact on
our operations over the past quarter, and the Company does not anticipate that
inflationary factors will have a significant impact on future operations.

Critical Accounting Policies.

      The SEC has issued Financial Reporting Release No. 60, "Cautionary Advice
Regarding Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting
companies provide additional disclosure and commentary on their most critical
accounting policies. In FRR 60, the SEC has defined the most critical accounting
policies as the policies that are most important to the portrayal of a company's
financial condition and operating results, and require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Based on this definition,
the Company's most critical accounting policies include: (a) use of estimates in
the preparation of financial statements; (b) stock-based compensation
arrangements; (c) revenue recognition; and (d) derivative financial instruments.
The methods, estimates and judgments the Company uses in applying these most
critical accounting policies have a significant impact on the results the
Company reports in its financial statements.


                                       49

<PAGE>

(a) Use of Estimates in the Preparation of Financial Statements.

      The preparation of these financial statements requires the Company to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, the Company evaluates these estimates,
including those related to revenue recognition and concentration of credit risk.
The Company bases its estimates on historical experience and on various other
assumptions that is believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.

(b) Stock-Based Compensation Arrangements.

      The Company issues shares of common stock to various individuals and
entities for management, legal, consulting and marketing services. These
issuances will be valued at the fair market value of the service provided and
the number of shares issued is determined, based upon the open market closing
price of common stock as of the date of each respective transaction. These
transactions will be reflected as a component of selling, general and
administrative expenses in the accompanying statement of operations.

      On January 1, 2006, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "Share-Based Payment," which establishes
standards for the accounting of transactions in which an entity exchanges its
equity instruments for goods or services, primarily focusing on accounting for
transactions where an entity obtains employee services in share-based payment
transactions. SFAS No. 123(R) requires a public entity to measure the cost of
employee services received in exchange for an award of equity instruments,
including stock options, based on the grant-date fair value of the award and to
recognize it as compensation expense over the period the employee is required to
provide service in exchange for the award, usually the vesting period.

(c) Revenue Recognition.

      Sales and construction of customized commercial products are recognized
under the percentage-of-completion basis when: (1) Contracts executed by the
parties normally include provisions that clearly specify the enforceable rights
regarding goods or service to be provided and received by the parties, the
consideration to be exchanged, and the manner and terms of settlement; (2) the
buyer can be expected to satisfy his obligations under the contract; (3) the
Company can be expected to perform our contractual obligations; and (4) the
Company can make reasonably dependable estimates of costs to complete and the
extent of progress toward completion. The Company measures the extent of
progress toward completion by using a ratio of costs incurred to total estimated
costs. The effects of changes in the estimates, if any, are reported in the
period of change and subsequent periods. Contracts not meeting the above
criteria are reported on the completed contract method. All other sales of
products are recognized upon shipment.


                                       50

<PAGE>

(d) Derivative Financial Instruments.

      The Company bifurcates its embedded derivative instruments related to its
convertible debentures and records them at their fair value at inception and
adjusts them to their fair values at each balance sheet date. Any change in fair
value is recorded as non-operating, non-cash income or expense at each reporting
period. If the fair value of the derivatives is higher at the subsequent balance
sheet date, the Company records a non-operating, non-cash charge. If the fair
value of the derivative is lower at the subsequent balance sheet date, the
Company records non-operating, non-cash income. The derivatives are valued
primarily using the Black-Scholes option pricing mode.. The derivatives are
classified as long-term liabilities.

      In addition, the Company classifies all other non-employee stock options
and warrants and derivative liabilities and mark them to market at each
reporting date. Non-employee stock options and warrants are valued primarily
using the Black-Scholes option pricing model.

Forward Looking Statements.

      Information in this Form 10-QSB contains "forward looking statements"
within the meaning of Rule 175 of the Securities Act of 1933, as amended, and
Rule 3b-6 of the Securities Act of 1934, as amended. When used in this Form
10-QSB, the words "expects," "anticipates," "believes," "plans," "will" and
similar expressions are intended to identify forward-looking statements. These
are statements that relate to future periods and include, but are not limited
to, statements regarding our adequacy of cash, expectations regarding net losses
and cash flow, our need for future financing, and our operating expenses.

      Forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those discussed above
as well as risks set forth above under "Factors That May Affect Operating
Results." These forward-looking statements speak only as of the date hereof. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.


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<PAGE>

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

      The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) that are designed to ensure that information required
to be disclosed in our periodic reports filed under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to management, including the Company's principal executive officer
and principal financial officer, to allow timely decisions regarding required
disclosure.

      As of the end of the period covered by this report, management carried out
an evaluation, under the supervision and with the participation of the Company's
principal executive officer and principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act). Based upon the evaluation, the Company's
principal executive officer and principal financial officer concluded that its
disclosure controls and procedures were effective at a reasonable assurance
level to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. In addition, the Company's principal executive officer and principal
financial officer concluded that its disclosure controls and procedures were
effective at a reasonable assurance level to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure.

      Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, will be or have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, and/or by management override of the control. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions;
over time, controls may become inadequate because of changes in conditions,
and/or the degree of compliance with the policies and procedures may
deteriorate. Because of the inherent limitations in a cost-effective internal
control system, misstatements due to error or fraud may occur and not be
detected.

Changes in Disclosure Controls and Procedures.

      There were no changes in the Company's disclosure controls and procedures,
or in factors that could significantly affect those controls and procedures,
since their most recent evaluation.


                                       52

<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      Other than as set forth below, the Company is not a party to any material
pending legal proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.

      (a) On October 25, 2004, a complaint was filed in the United States
District Court, District of Colorado: Mitchell Vince V. Isotec, Inc. and World
Am, Inc. The complaint alleges that Isotec terminated Mr. Vince without cause
prior to the expiration of the term of an alleged employment agreement. The
complaint seeks monetary damages of $240,000. The Company has retained counsel
in the matter and responsive pleadings have been filed.

      Management believes the Company has meritorious claims and defenses to the
plaintiffs' claims and ultimately will prevail on the merits. However, this
matter remains in the early stages of litigation and there can be no assurance
as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

      (b) On August 2, 2006, a complaint was filed in the District Court of
Boulder County, Colorado: Karen Alexander v. World Am, Inc., Isotec, Inc.,
Robert A. Hovee, David J. Barnes, James R. Largent, and Ken Jochim. The
complaint principally alleges that World Am, Inc. breached an employment
agreement with the plaintiff by not paying her certain amounts allegedly owing.
The Company has retained counsel in the matter, and responsive pleadings have
been filed.

      Management believes the Company has meritorious claims and defenses to the
plaintiff's claims and ultimately will prevail on the merits. However, this
matter remains in the very early stages of litigation and there can be no
assurance as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

      (c) On August 2, 2006, a complaint was filed in the District Court of
Boulder County, Colorado: Innovision, Ltd. v. World Am, Inc.. The complaint
principally alleges that World Am, Inc. breached a promissory note with the
plaintiff (which is controlled by Ms. Alexander) by not paying the principal and
accrued interest under this note. The Company has paid all monies and the
lawsuit has been dismissed.

      (d) On September 20, 2006, a complaint was filed in the District Court of
Adams County, Colorado: James H. Alexander v. World Am, Inc. The complaint
principally alleges that World Am, Inc. breached an employment agreement with
the plaintiff by not paying him certain amounts allegedly owing. The Company has
retained counsel in the matter, and responsive pleadings have been filed.


                                       53

<PAGE>

      Management believes the Company has meritorious claims and defenses to the
plaintiff's claims and ultimately will prevail on the merits. However, this
matter remains in the very early stages of litigation and there can be no
assurance as to the outcome of the lawsuit. Litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. Were unfavorable rulings to
occur, there exists the possibility of a material adverse impact of money
damages on the Company's financial condition, results of operations, or
liquidity of the period in which the ruling occurs, or future periods.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      There were no unregistered sales of the Company's equity securities during
the three months ended on September 30, 2006. There were no purchases of common
stock of the Company by the Company or its affiliates during the three months
ended September 30, 2006.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

      Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None

ITEM 5. OTHER INFORMATION.

Subsequent Events.

Stock Issuances.

(1)   On October 10, 2006, the Company issued 22,362,000 free trading shares of
      common stock for services rendered by consultants valued at $ 111,810
      ($0.005 per share).

(2)   On October 10, 2006, the Company issued 1,587,594 free trading shares of
      common stock as payment of compensation owed employees valued at $7,938
      ($0.005 per share).

(3)   On October 13, 2006 the Company issued 264,920 free trading shares of
      common stock as payment of compensation owed employees valued at $1,325
      ($0.005 per share).

(4)   On October 16, 2006, the Company issued 3,396,774 restricted shares of
      common stock to an optionee for a stock option that was issued on July 28,
      2005. The shares were valued at $18,871 ($0.005 per share).


                                       54

<PAGE>

(5)   On October 30, 2006, the Company issued 1,750,787 free trading shares of
      common stock as payment of compensation owed employees valued at $7,879
      ($0.0045 per share).

(6)   On November 1, 2006, the Company issued 188,342 free trading shares of
      common stock as payment of compensation owed employees valued at $791
      ($0.0042 per share).

Private Placement.

      On October 11, 2006, the Company commenced a private offering of up to 30
units at a price of $25,000 per unit (each unit consists of 5,000,000 shares of
common stock and a warrant to purchase 1,250,000 shares of common stock. No
units have been sold to date.

ITEM 6. EXHIBITS.

      Exhibits included or incorporated by reference herein are set forth in the
attached Exhibit Index.

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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.

                                        World Am, Inc.


Dated: November 14, 2006                By: /s/ Robert A. Hovee
                                            -----------------------
                                            Robert A. Hovee,
                                            Chief Executive Officer


Dated: November 14, 2006                By: /s/ David J. Barnes
                                            -----------------------
                                            David J. Barnes,
                                            Chief Financial Officer


                                       55

<PAGE>

                                  EXHIBIT INDEX

Number   Description
------   -----------
2.1      Agreement and Plan of Merger between the Company and Allmon
         Corporation, dated May 11, 2000 (incorporated by reference to Exhibit
         2.1 of the Form 8-K12g-3 filed on May 16, 2000).

2.2      Stock Purchase Agreement between the Company, Isotec, Incorporated, and
         selling shareholders, dated February 22, 2000 (incorporated by
         reference to Exhibit 2.2 of the Form 10-QSB filed on May 21, 2001).

2.3      Share Exchange Agreement between the Company and World Am Security
         Venture Company, Ltd., dated May 18, 2004 (incorporated by reference to
         Exhibit 2 of the Form 8-K filed on May 26, 2004).

3.1      Articles of Incorporation, dated July 5, 2002 (incorporated by
         reference to Exhibit 3.1 of the Form 10-QSB/A filed on February 5,
         2004).

3.2      Certificate of Amendment to Articles of Incorporation, dated August 20,
         2002 (incorporated by reference to Exhibit 3.2 of the Form 10-QSB/A
         filed on February 5, 2004).

3.3      Certificate of Amendment to Articles of Incorporation, dated December
         20, 2002 (incorporated by reference to Exhibit 3.3 of the Form 10-QSB/A
         filed on February 5, 2004).

3.4      Certificate of Amendment to Articles of Incorporation, dated August 2,
         2004 (incorporated by reference to Exhibit 3.4 of the Form 10-QSB filed
         on August 20, 2004).

3.5      Certificate of Amendment of Articles of Incorporation, dated November
         8, 2004 (incorporated by reference to Exhibit 3.1 of the Form 8-K filed
         on November 16, 2004).

3.6      Certificate of Amendment of Articles of Incorporation, dated December
         1, 2004 (incorporated by reference to Exhibit 3.2 of the Form 8-K filed
         on November 16, 2004).

3.7      Bylaws, dated May 15, 2000 (incorporated by reference to Exhibit 3.2 of
         the Form 8-K12g-3 filed on May 16, 2000).

4.1      Employee Stock Incentive Plan, dated January 22, 2001 (incorporated by
         reference to Exhibit 4.1 of the Form S-8 filed on January 29, 2001).


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<PAGE>

4.2      Non-Employee Directors and Consultants Retainer Stock Plan, dated
         January 5, 2001 (incorporated by reference to Exhibit 4.2 of the Form
         S-8 filed on January 29, 2001).

4.3      Common Stock Purchase Agreement between the Company and Four Way
         Associates, Inc., dated June 1, 2001 (incorporated by reference to
         Exhibit 4.3 of the Form SB-2 filed on August 28, 2001).

4.4      Amended and Restated Employee Stock Incentive Plan, dated November 20,
         2001 (incorporated by reference to Exhibit 4.1 of the Form S-8 POS
         filed on January 31, 2002).

4.5      Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan, dated November 20, 2001 (incorporated by reference to
         Exhibit 4.2 of the Form S-8 POS filed on January 31, 2002).

4.6      2002 Non-Employee Directors and Consultants Retainer Stock Plan, dated
         September 12, 2002 (incorporated by reference to Exhibit 4 of the Form
         S-8 filed on September 18, 2002).

4.7      2002 Stock Compensation Plan, dated December 16, 2002 (incorporated by
         reference to Exhibit 4 of the Form S-8 filed on December 23, 2002)

4.8      2003 Consultants Stock Compensation Plan dated August 19, 2003
         (incorporated by reference to Exhibit 4 of the Form S-8 filed on August
         22, 2003).

4.9      2003 Non-Qualified Stock Option Plan, dated September 29, 2003
         (incorporated by reference to Exhibit 4 of the Form S-8 filed on
         October 1, 2003).

4.10     Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan (Amendment No. 2), dated February 10, 2004 (incorporated by
         reference to Exhibit 4 of the Form S-8 POS filed on February 13, 2004).

4.11     Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan (Amendment No. 3), dated June 1, 2004 (incorporated by
         reference to Exhibit 4 of the Form S-8 POS filed on June 10, 2004).

4.12     Amended and Restated Employee Stock Incentive Plan (Amendment No. 2),
         dated July 15, 2004 (incorporated by reference to Exhibit 4 of the Form
         S-8 POS filed on August 6, 2004).

4.13     Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan (Amendment No. 4), dated October 12, 2004 (incorporated by
         reference to Exhibit 4 of the Form S-8 POS filed on October 19, 2004).


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<PAGE>

4.14     Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan (Amendment No. 5), dated December 1, 2004 (incorporated by
         reference to Exhibit 4 of the Form S-8 POS filed on December 13, 2004).

4.15     Amended and Restated Employee Stock Incentive Plan (Amendment No. 3),
         dated October 17, 2005 (incorporated by reference to Exhibit 4 of the
         Form S-8 POS filed on December 6, 2005).

4.16     Amended and Restated Non-Employee Directors and Consultants Retainer
         Stock Plan (Amendment No. 6), dated December 22, 2005 (incorporated by
         reference to Exhibit 4 of the Form S-8 POS filed on January 6, 2006).

4.17     Securities Purchase Agreement between the Company and Golden Gate
         Investors, Inc., dated January 23, 2006 (incorporated by reference to
         Exhibit 4.1 of the Form 8-K filed on February 10, 2006).

4.18     6 3/4% Convertible Debenture issued to Golden Gate Investors, Inc.,
         dated January 23, 2006 (incorporated by reference to Exhibit 4.2 of the
         Form 8-K filed on February 10, 2006).

4.19     Warrant to Purchase Common Stock (due January 6, 2009) issued to Golden
         Gate Investors, Inc., dated January 23, 2006 (incorporated by reference
         to Exhibit 4.3 of the Form 8-K filed on February 10, 2006).

4.20     Warrant to Purchase Common Stock (due January 6, 2011) issued to Golden
         Gate Investors, Inc., dated January 23, 2006 (incorporated by reference
         to Exhibit 4.4 of the Form 8-K filed on February 10, 2006).

4.21     Registration Rights Agreement between the Company and Golden Gate
         Investors, Inc., dated January 23, 2006 (incorporated by reference to
         Exhibit 4.5 of the Form 8-K filed on February 10, 2006).

4.22     Addendum to Convertible Debenture and Warrant To Purchase Common Stock,
         dated February 7, 2006 (incorporated by reference to Exhibit 4.6 of the
         Form 8-K filed on February 10, 2006).

4.23     Amended and Restated Employee Stock Incentive Plan (Amendment No. 4),
         dated February 7, 2006 incorporated by reference to Exhibit 4 of the
         Form S-8 POS filed on February 14, 2006).

4.24     Cancellation Letter between the Company and Golden Gate Investors,
         Inc., dated June 14, 2006 (incorporated by reference to Exhibit 4.7 of
         the Form 8-K/A filed on June 27, 2006).


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<PAGE>

4.25     Securities Purchase Agreement between the Company and La Jolla Cove
         Investors, Inc., dated June 19, 2006 (incorporated by reference to
         Exhibit 4.8 of the Form 8-K/A filed on June 27, 2006).

4.26     6 3/4% Convertible Debenture issued to La Jolla Cove Investors, Inc.,
         dated June 19, 2006 (incorporated by reference to Exhibit 4.9 of the
         Form 8-K/A filed on June 27, 2006).

4.27     Warrant to Purchase Common Stock (due June 19, 2009) issued to La Jolla
         Cove Investors, Inc., dated June 19, 2006 (incorporated by reference to
         Exhibit 4.10 of the Form 8-K/A filed on June 27, 2006).

4.28     Warrant to Purchase Common Stock (due June 19, 2011) issued to La Jolla
         Cove Investors, Inc., dated June 19, 2006 (incorporated by reference to
         Exhibit 4.11 of the Form 8-K/A filed on June 27, 2006).

4.29     Registration Rights Agreement between the Company and La Jolla Cove
         Investors, Inc., dated June 19, 2006 (incorporated by reference to
         Exhibit 4.12 of the Form 8-K/A filed on June 27, 2006).

4.30     Additional Transaction Letter between the Company and La Jolla Cove
         Investors, Inc., dated June 22, 2006 (incorporated by reference to
         Exhibit 4.13 of the Form 8-K/A filed on June 27, 2006).

10.1     Employment Agreement between the Company and James Alexander, dated
         February 20, 2002 (incorporated by reference to Exhibit 10.4 of the
         Form 10-QSB filed on May 14, 2002).

10.2     Amendment A to Employment Agreement between the Company and James
         Alexander, dated as of February 20, 2002 (incorporated by reference to
         Exhibit 10.1 of the Form 10-KSB filed on April 11, 2003).

10.3     Amendment B to Employment Agreement between the Company and James
         Alexander, dated January 15, 2004 (incorporated by reference to Exhibit
         10.3 of the Form 10-KSB filed on April 20, 2004).

10.4     Share Exchange Agreement between the Company, on the one hand, and
         Senz-It, Inc. and the shareholder of Senz-It, on the other hand, dated
         June 10, 2005 (including the following: Exhibit A: Shares to be Issued;
         Exhibit B: Warrant; Exhibit C: Series B Preferred Stock Certificate of
         Designation; and Exhibit I: Funding Schedule) (not including the
         following: Exhibit D: World Am, Inc. Officer's Certificate; Exhibit E:
         Senz It, Inc. Officer's Certificate; Exhibit F: Senz It Financial
         Statements; Exhibit G: Senz It Contracts; Exhibit H: World Am
         Contracts; Exhibit J: Form 8-K; Exhibit K: Press Release; Schedule 5.7:
         Taxes; and Schedule 5.9: Legal Proceedings) (incorporated by reference
         to Exhibit 10.1 of the Form 8-K/A filed on September 7, 2005).


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<PAGE>

10.5     Promissory Note issued by the Company in favor of Torrey Peaks
         Ventures, dated June 13, 2005 (incorporated by reference to Exhibit
         10.1 of the Form 8-K filed on March 21, 2006).

10.6     Amendment "A" to Promissory Note, dated July 14, 2005 (incorporated by
         reference to Exhibit 10.2 of the Form 8-K filed on March 21, 2006).

10.7     First Amendment to Share Exchange Agreement between the Company, on the
         one hand, and Senz-It, Inc. and the shareholder of Senz-It, on the
         other hand, dated August 31, 2005 (incorporated by reference to Exhibit
         10.2 of the Form 8-K/A filed on September 7, 2005).

10.8     Option to Exclusive License Agreement between Senz-It Inc. and The
         Research Foundation of State University of New York, dated June 20,
         2005 (incorporated by reference to Exhibit 10.3 of the Form 8-K/A filed
         on September 7, 2005).

10.9     Venture Acceleration Agreement between Senz-It, Inc. and Select
         University Technologies, Inc., dated June 20, 2005 (incorporated by
         reference to Exhibit 10.4 of the Form 8-K/A filed on November 28,
         2005).

10.10    Demand Promissory Note issued by the Company in favor of SUTI Holdings,
         LP, dated May 18, 2006 (incorporated by reference to Exhibit 10.01 of
         the Form 10-KSB filed on May 22, 2006).

14       Code of Business Conduct and Ethics, adopted by the Company's board of
         directors (incorporated by reference to Exhibit 14 of the Form 10-KSB
         filed on April 20, 2004).

16.1     Letter on Change in Certifying Accountant (incorporated by reference to
         Exhibit 16 of the Form 8-K/A filed on July 12, 2004).

16.2     Letter on Change in Certifying Accountant (incorporated by reference to
         Exhibit 16 of the Form 8-K/A filed on August 3, 2006).

21       Subsidiaries of the Company (incorporated by reference to Exhibit 21 of
         the Form 10-KSB/A filed on June 30, 2006).

23       Consent of Independent Registered Public Accounting Firm (incorporated
         by reference to Exhibit 23 of the Form 10-KSB filed on May 22, 2006).

31.1     Rule 13a-14(a)/15d-14(a) Certification of Robert A. Hovee (filed
         herewith).


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<PAGE>

31.2     Rule 13a-14(a)/15d-14(a) Certification of David J. Barnes (filed
         herewith).

32       Section 1350 Certification of Robert A. Hovee and David J. Barnes
         (filed herewith).

99.1     Confirmation of Provisional Patent Application, dated September 2, 2004
         (incorporated by reference to Exhibit 99.3 of the Form 10-KSB filed on
         April 21, 2005).

99.2     Confirmation of Provisional Patent Application, dated September 2, 2004
         (incorporated by reference to Exhibit 99.4 of the Form 10-KSB filed on
         April 21, 2005).

99.3     Press release issued by the Company, dated June 13, 2005 (incorporated
         by reference to Exhibit 99 of the Form 8-K filed on June 16, 2005).

99.4     Press Release issued by the Company, dated August 9, 2005 (incorporated
         by reference to Exhibit 99.2 of the Form 8-K/A filed on September 7,
         2005).

99.5     Press Release issued by the Company, dated September 7, 2005
         (incorporated by reference to Exhibit 99.3 of the Form 8-K/A filed on
         September 7, 2005).

99.6     Press Release issued by the Company, dated November 7, 2005
         (incorporated by reference to Exhibit 99 of the Form 8-K filed on
         November 14, 2005).

99.7     Press Release issued by the Company, dated November 14, 2005
         (incorporated by reference to Exhibit 99 of the Form 8-K filed on
         November 16, 2005).

99.8     Press Release issued by the Company, dated February 21, 2006
         (incorporated by reference to Exhibit 99 of the Form 8-K filed on March
         2, 2006).

                                       61