**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**Form      10-QSB/A**

**(Amendment      No. 1)**

| x | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|-----------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended June 30, 2007**

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT |
|---|-----------------------------------------------------------------------------------------------|

**Commission      file number 0-30639**

**World      Am, Inc.**

| **Nevada**(State                or other jurisdiction ofincorporation                or organization)                                                            | **90-0142757**(I.R.S.                EmployerIdentification                No.) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
|                                                                                                                                                             |                                                                            |
| **4340                Von Karman Avenue****Suite                200****Newport                Beach, CA**(Address                of principal executive offices) |   **92660**(Zip                Code)                                  |

**Issuer’s      telephone number, including area code (949) 955-5355**

**Applicable      only to issuers involved in bankruptcy proceedings during the preceding five      years**

**Applicable      only to corporate issuers:**

**Transitional      Small Business Disclosure Format**

----

**WORLD      AM, INC.**

**TABLE      OF CONTENTS**

| **PART                      I - FINANCIAL INFORMATION** | **1**                                                                                |
|---------------------------------------------------------|--------------------------------------------------------------------------------------|
|                                                    |                                                                                 |   |
| ITEM                      1                             | Financial                      Statements (Unaudited)                                | 1 |
|                                                    |                                                                                 |   |
| ITEM                      2                             | Management’s                      Discussion and Analysis or Plan of Operation | 43 |
|                                                    |                                                                                 |   |
| ITEM                      3                             | Controls                      and Procedures                                         | 55 |
|                                                    |                                                                                 |   |
|                                                    |                                                                                 |   |
| **PART                      II - OTHER INFORMATION**    | **58**                                                                               |
|                                                    |                                                                                 |   |
| ITEM                      1                             | Legal                      Proceedings                                               | 58 |
|                                                    |                                                                                 |   |
| ITEM                      2                             | Unregistered                      Sales of Equity Securities and Use of Proceeds     | 58 |
|                                                    |                                                                                 |   |
| ITEM                      3                             | Defaults                      Upon Senior Securities                                 | 59 |
|                                                    |                                                                                 |   |
| ITEM                      4                             | Submission                      of Matters to a Vote of Security Holders             | 59 |
|                                                    |                                                                                 |   |
| ITEM                      5                             | Other                      Information                                               | 59 |
|                                                    |                                                                                 |   |
| ITEM                      6                             | Exhibits                                                                             | 59 |

----

**Explanatory      Note**

**PART      I-FINANCIAL INFORMATION**

**ITEM      1**
**Financial      Statements**
**      (unaudited)**

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**JUNE      30, 2007**

**As      Restated, see Note 13**

**(Unaudited)**

| **ASSETS**                                                                                                                                     |   |   |      |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|
|                                                                                                                                           |   |   |      |
| Current                assets                                                                                                                  |   |   |      |
| Cash                and cash equivalents                                                                                                       |   | $      | 1,838,440 |   |
| Accounts                receivable, net                                                                                                        |   |   | 100,854   |   |
| Inventories                                                                                                                                    |   |   | 90,885    |   |
| Prepaid                expenses and other current assets                                                                                       |   |   | 23,496    |   |
| Total                current assets                                                                                                            |   |   | 2,053,675 |   |
|                                                                                                                                           |   |   |      |   |
| Fixed                assets, net                                                                                                               |   |   | 55,791    |   |
| Intangible                assets                                                                                                               |   |   | 176,604   |   |
| Refundable                deposits                                                                                                             |   |   | 3,820     |   |
|                                                                                                                                           |   |   |      |   |
| Total                assets                                                                                                                    |   | $      | 2,289,890 |   |
|                                                                                                                                           |   |   |      |   |
| **LIABILITIES                AND STOCKHOLDERS’ DEFICIT**                                                                                 |   |   |      |   |
|                                                                                                                                           |   |   |      |   |
| Current                liabilities                                                                                                             |   |   |      |   |
| Accounts                payable and accrued liabilities                                                                                        |   | $      | 449,502   |   |
| Due                to related parties                                                                                                          |   |   | 192,006   |   |
| Due                to stockholders                                                                                                             |   |   | 326,474   |   |
| Payroll                taxes payable                                                                                                           |   |   | 304,488   |   |
| Deferred                revenue                                                                                                                |   |   | 157,661   |   |
| Notes                payable                                                                                                                   |   |   | 12,365    |   |
| Convertible                debentures and accrued interest payable, net of unamortized debt                discount                of $165,012 |   |   | 113,133   |   |
| Total                current liabilities                                                                                                       |   |   | 1,555,629 |   |
|                                                                                                                                           |   |   |      |   |
| Derivatives                and warrant liabilities                                                                                             |   |   | 3,408,709 |   |
|                                                                                                                                           |   |   |      |   |
| Total                liabilities                                                                                                               |   |   | 4,964,338 |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**JUNE      30, 2007**

**As      Restated, see Note 13**

**(Unaudited)**

**(Continued)**

|                                                                                                                                                                                                                                                |   | **June                30, 2007** |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|
| 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 as of June 30, 2007 |   |                             | --         |   |
| 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                as of June 30, 2007                           |   |                             | --         |   |
| Common                stock; $0.0001 par value; 1,500,000,000 shares authorized, 923,136,478                shares issued and outstanding as of June 30, 2007                                                                                       |   |                             | 92,314     |   |
|                                                                                                                                                                                                                                                |   |                             |       |   |
| Additional                paid-in capital                                                                                                                                                                                                           |   |                             | 3,872,220  |   |
| Deficit                accumulated during the development stage                                                                                                                                                                                     |   |                             | (6,638,982 | ) |
| Total                stockholders’ deficit                                                                                                                                                                                                    |   |                             | (2,674,448 | ) |
|                                                                                                                                                                                                                                                |   |                             |       |   |
| Total                liabilities and stockholders’ deficit                                                                                                                                                                                    |   | $                                | 2,289,890  |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

|                                                                        |   |  **Three                Months Ended June 30, 2007****(As                Restated, see Note 13)** |                  |  **Three                Months Ended June 30, 2006** |   |   **Six                Months Ended June 30, 2007****(As                Restated, see Note 13)** |   |  **Six                Months Ended June 30, 2006** |        | **Period                From****March                4, 2005 (Inception) Through****June                30, 2007****(As                Restated, see Note 13)** |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|-----------------------|----------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                        |   |                                                                                                        |                  |                                                           |   |                                                                                                            |   |                                                         |        |                                                                                                                                                            |   |
| Revenues                                                                    |   | $                                                                                                           | 69,140                |                                                           | $      | 3,878                                                                                                           |   | $                                                            | 122,410     |                                                                                                                                                            | $      | 72,537 |   | $ | 580,658 |   |
| Cost                of revenues                                             |   |                                                                                                        | 50,063                |                                                           |   | --                                                                                                              |   |                                                         | 62,801      |                                                                                                                                                            |   | 31,443 |   |   | 261,413 |   |
| Gross                profit                                                 |   |                                                                                                        | 19,077                |                                                           |   | 3,878                                                                                                           |   |                                                         | 59,609      |                                                                                                                                                            |   | 41,094 |   |   | 319,245 |   |
|                                                                        |   |                                                                                                        |                  |                                                           |   |                                                                                                            |   |                                                         |        |                                                                                                                                                            |   |   |   |   |   |   |
| General                and administrative expenses                          |   |                                                                                                        | 960,979               |                                                           |   | 335,463                                                                                                         |   |                                                         | 1,547,876   |                                                                                                                                                            |   | 769,320 |   |   | 4,397,854 |   |
| Loss                from operations                                         |   |                                                                                                        | (941,902              | )                                                              |   | (331,585                                                                                                        | )      |                                                         | (1,488,267  | )                                                                                                                                                               |   | (728,226 | ) |   | (4,078,609 | ) |
| Other                income (expense):                                      |   |                                                                                                        |                  |                                                           |   |                                                                                                            |   |                                                         |        |                                                                                                                                                            |   |   |   |   |   |   |
| Miscellaneous                income (expense)                               |   |                                                                                                        | (141                  | )                                                              |   | (2,160                                                                                                          | )      |                                                         | 1,600       |                                                                                                                                                            |   | (1,757 | ) |   | (13,897 | ) |
| Interest                income                                              |   |                                                                                                        | 29,996                |                                                           |   | --                                                                                                              |   |                                                         | 29,996      |                                                                                                                                                            |   | -- |   |   | 29,996 |   |
| Settlement                gain                                              |   |                                                                                                        | --                    |                                                           |   | --                                                                                                              |   |                                                         | --          |                                                                                                                                                            |   | -- |   |   | 116,000 |   |
| Interest                expense                                             |   |                                                                                                        | (27,028               | )                                                              |   | (2,354,864                                                                                                      | )      |                                                         | (56,491     | )                                                                                                                                                               |   | (2,356,332 | ) |   | (3,207,091 | ) |
| Change                in fair value of derivative and warrant liabilities   |   |                                                                                                        | 667,471               |                                                           |   | --                                                                                                              |   |                                                         | (149,174    | )                                                                                                                                                               |   | -- |   |   | 514,619 |   |
| Total                other income (expense)                                 |   |                                                                                                        | 670,298               |                                                           |   | (2,357,024                                                                                                      | )      |                                                         | (174,069    | )                                                                                                                                                               |   | (2,358,089 | ) |   | (2,560,373 | ) |
|                                                                        |   |                                                                                                        |                  |                                                           |   |                                                                                                            |   |                                                         |        |                                                                                                                                                            |   |   |   |   |   |   |
| Loss                before provision for income taxes                       |   |                                                                                                        | (271,604              | )                                                              |   | (2,688,609                                                                                                      | )      |                                                         | (1,662,336  | )                                                                                                                                                               |   | (3,086,315 | ) |   | (6,638,982 | ) |
| Provision                for income taxes                                   |   |                                                                                                        | --                    |                                                           |   | --                                                                                                              |   |                                                         | --          |                                                                                                                                                            |   | -- |   |   | -- |   |
| Net                loss                                                     |   | $                                                                                                           | (271,604              | )                                                              | $      | (2,688,609                                                                                                      | )      | $                                                            | (1,662,336  | )                                                                                                                                                               | $      | (3,086,315 | ) | $ | (6,638,982 | ) |
|                                                                        |   |                                                                                                        |                  |                                                           |   |                                                                                                            |   |                                                         |        |                                                                                                                                                            |   |   |   |   |   |   |
| Loss                per common share, basic and diluted                     |   | $                                                                                                           | (                0.00 | )                                                              | $      | (0.02                                                                                                           | )      | $                                                            | (0.00       | )                                                                                                                                                               | $      | (0.02 | ) |   |   |   |
| Basic                and diluted weighted average common shares outstanding |   |                                                                                                        | 700,471,186           |                                                           |   | 167,614,521                                                                                                     |   |                                                         | 567,159,125 |                                                                                                                                                            |   | 153,882,780 |   |   |   |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

|                                                                                                                               |   | **Class                A Preferred Stock** |   | **Class                B Preferred Stock** |   | **Common                Stock** |   | **Additional                Paid-In** |   | **Receivable                Related to Issuance of Common** |   | **Deficit                Accumulated During the Development** |   | **Total****Stockholders’** |       |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------------------------------------------|--------|---------------------------------|--------|---------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                                                                               |   | **Shares**                                 |   | **Amount**                                 |   | **Shares**                      |   | **Amount**                            |   | **Shares**                                                  |   | **Amount**                                                    |   | **Capital**                      |       | **Stock** |   | **Stage** |   | **Deficit** |   |
| 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 and outstanding                warrants and options |   |                                       | 1,369  |                                       |   | --                              |   |                                  | --     |                                                        |   | --                                                            |   |                             | 66,570,285 |   |   | 6,656 |   |   | (773,977 | ) |   | (220,000 | ) |   | -- |   |   | (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 |   |
|                                                                                                                               |   |                                       |   |                                       |   |                            |   |                                  |   |                                                        |   |                                                          |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued in November 2005 to employees, weighted average $0.024                per                share  |   |                                       | --     |                                       |   | --                              |   |                                  | --     |                                                        |   | --                                                            |   |                             | 10,375,000 |   |   | 1,038 |   |   | 249,229 |   |   | -- |   |   | -- |   |   | 250,267 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                                                  |   | **Class                    A Preferred Stock** |   | **Class                    B Preferred Stock** |   | **Common                    Stock** |   | **Additional****Paid-In** |   | **Receivable                    Related to Issuance of Common** |   | **Deficit                    Accumulated During the Development** |   | **Total                    Stockholders’** |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|-------------------------------------|--------|---------------------------|--------|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------|-------------|
|                                                                                                                                                                  |   | **Shares**                                     |   | **Amount**                                     |   | **Shares**                          |   | **Amount**                |   | **Shares**                                                      |   | **Amount**                                                        |   | **Capital**                                      |        | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                    stock issued in December 2005 to employees, weighted average                    $0.024 per                    share                         |   |                                           | --     |                                           |   | --                                  |   |                      | --     |                                                            |   | --                                                                |   |                                             | 2,005,000   |   |   | 201 |   |   | 19,460 |   |   | (4,040 | ) |   | -- |   |   | 15,621 |   |
|                                                                                                                                                                  |   |                                           |   |                                           |   |                                |   |                      |   |                                                            |   |                                                              |   |                                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                    of note payable for shares of common stock in December 2005,                    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                                                                                                                         |   |                                           | 1,369  |                                           |   | --                                  |   |                      | 55     |                                                            |   | --                                                                |   |                                             | 113,547,959 |   |   | 11,355 |   |   | (310,997 | ) |   | (224,040 | ) |   | (600,507 | ) |   | (1,124,189 | ) |
|                                                                                                                                                                  |   |                                           |   |                                           |   |                                |   |                      |   |                                                            |   |                                                              |   |                                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued in January 2006 to employees, weighted average $0.009                    per                    share                          |   |                                           | -      |                                           |   | --                                  |   |                      | --     |                                                            |   | --                                                                |   |                                             | 3,740,000   |   |   | 374 |   |   | 34,082 |   |   | -- |   |   | -- |   |   | 34,456 |   |
|                                                                                                                                                                  |   |                                           |   |                                           |   |                                |   |                      |   |                                                            |   |                                                              |   |                                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued to vendor 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                    $0.009 per                    share                         |   |                                           | --     |                                           |   | --                                  |   |                      | --     |                                                            |   | --                                                                |   |                                             | 2,700,000   |   |   | 270 |   |   | 23,310 |   |   | -- |   |   | -- |   |   | 23,580 |   |
|                                                                                                                                                                  |   |                                           |   |                                           |   |                                |   |                      |   |                                                            |   |                                                              |   |                                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued in February 2006 to employees, weighted average                    $0.018 per                    share                         |   |                                           | --     |                                           |   | --                                  |   |                      | --     |                                                            |   | --                                                                |   |                                             | 2,623,077   |   |   | 263 |   |   | 46,893 |   |   | -- |   |   | -- |   |   | 47,156 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENTS STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                                   |   | **Class                    A Preferred Stock** |   | **Class                    B Preferred Stock** |   | **Common                    Stock** |   | **Additional                    Paid-In** |   | **Receivable                    Related to Issuance of Common** |   | **Deficit                    Accumulated During the Development** |   | **Total                    Stockholders’** |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|-------------------------------------|--------|-------------------------------------------|--------|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                                                                   |   | **Shares**                                     |   | **Amount**                                     |   | **Shares**                          |   | **Amount**                                |   | **Shares**                                                      |   | **Amount**                                                        |   | **Capital**                                      |       | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                    stock issued in February 2006 for services, weighted average                    $0.018 per                    share          |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                            |   | --                                                                |   |                                             | 2,150,000  |   |   | 215 |   |   | 38,649 |   |   | -- |   |   | -- |   |   | 38,864 |   |
|                                                                                                                                                   |   |                                           |   |                                           |   |                                |   |                                      |   |                                                            |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued in March 2006 to employees, weighted average $0.017                    per                    share             |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                            |   | --                                                                |   |                                             | 626,923    |   |   | 63 |   |   | 10,366 |   |   | -- |   |   | -- |   |   | 10,429 |   |
|                                                                                                                                                   |   |                                           |   |                                           |   |                                |   |                                      |   |                                                            |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued in March 2006 for exercise of warrant, weighted                    average                    $0.0001 per share |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                            |   | --                                                                |   |                                             | 30,879,999 |   |   | 3,088 |   |   | 24,700 |   |   | -- |   |   | -- |   |   | 27,788 |   |
|                                                                                                                                                   |   |                                           |   |                                           |   |                                |   |                                      |   |                                                            |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 for services, weighted average $0.017                    per                    share             |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                            |   | --                                                                |   |                                             | 673,077    |   |   | 67 |   |   | 11,131 |   |   | -- |   |   | -- |   |   | 11,198 |   |
|                                                                                                                                                   |   |                                           |   |                                           |   |                                |   |                                      |   |                                                            |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Payment                    for shares issued in 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 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                             |   | **Class                      A Preferred Stock** |   | **Class                      B Preferred Stock** |   | **Common                      Stock** |   | **Additional                      Paid-In** |   | **Receivable                      Related to Issuance of Common** |   | **Deficit                      Accumulated During the Development** |   | **Total                      Stockholders’** |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------|--------|---------------------------------------------|--------|-------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                                             |   | **Shares**                                       |   | **Amount**                                       |   | **Shares**                            |   | **Amount**                                  |   | **Shares**                                                        |   | **mount**                                                           |   | **Capital**                                        |       | **Stock** |   | **Stage** |   | **Deficit** |   |
| 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 |   |
|                                                                                                                                             |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                      of common stock issued to an 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 $0.007                      per                      share  |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | 2,200,000  |   |   | 220 |   |   | 15,880 |   |   | -- |   |   | -- |   |   | 16,100 |   |
|                                                                                                                                             |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                            |   | **Class                    A Preferred Stock** |   | **Class                    B Preferred Stock** |   | **Common                    Stock** |   | **Additional                    Paid-In** |   | **Receivable                    Related to****Issuance                    of Common** |   | **Deficit                    Accumulated During the Development** |   | **Total                    Stockholders’** |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|-------------------------------------|--------|-------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                                                            |   | **Shares**                                     |   | **Amount**                                     |   | **Shares**                          |   | **Amount**                                |   | **Shares**                                                                            |   | **Amount**                                                        |   | **Capital**                                      |       | **Stock** |   | **Stage** |   | **Deficit** |   |
| 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 |   |
|                                                                                                                                            |   |                                           |   |                                           |   |                                |   |                                      |   |                                                                                  |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 |   |   | -- |   |   | -- |   |
|                                                                                                                                            |   |                                           |   |                                           |   |                                |   |                                      |   |                                                                                  |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    stock issued in October 2006 for services, weighted average $0.005                    per                    share    |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                                                  |   | --                                                                |   |                                             | 22,362,000 |   |   | 2,236 |   |   | 109,574 |   |   | -- |   |   | -- |   |   | 111,810 |   |
|                                                                                                                                            |   |                                           |   |                                           |   |                                |   |                                      |   |                                                                                  |   |                                                              |   |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                    of stock option in October 2006, weighted average $0.002 per                    share                               |   |                                           | --     |                                           |   | --                                  |   |                                      | --     |                                                                                  |   | --                                                                |   |                                             | 3,396,774  |   |   | 340 |   |   | 6,454 |   |   | -- |   |   | -- |   |   | 6,794 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                                       |   | **Class                        A Preferred Stock** |   | **Class                        B Preferred Stock** |   | **Common                        Stock** |   | **Additional****Paid-In** |   | **Receivable                        Related to****Issuance                        of Common** |   | **Deficit                        Accumulated During the Development** |   | **Total****Stockholders’** |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|----------------------------------------------------|--------|-----------------------------------------|--------|---------------------------|--------|-----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|----------------------------------|-------------|
|                                                                                                                                                       |   | **Shares**                                         |   | **Amount**                                         |   | **Shares**                              |   | **Amount**                |   | **Shares**                                                                                    |   | **Amount**                                                            |   | **Capital**                      |        | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                        stock issued in October 2006 to employees, weighted average                        $0.0048 per                        share  |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 3,603,301   |   |   | 360 |   |   | 16,781 |   |   | -- |   |   | -- |   |   | 17,141 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in November 2006 for services, weighted average                        $0.0043 per                        share |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 3,136,905   |   |   | 314 |   |   | 13,036 |   |   | -- |   |   | -- |   |   | 13,350 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in November 2006 to employees, weighted average                        $0.0041 per                        share |   |                                               | --     |                                               |   | ---                                     |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 4,403,822   |   |   | 440 |   |   | 17,682 |   |   | -- |   |   | -- |   |   | 18,122 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in December 2006 for services, weighted average                        $0.0041 per                        share |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 2,317,074   |   |   | 232 |   |   | 9,268 |   |   | -- |   |   | -- |   |   | 9,500 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in December 2006 to employees, weighted average                        $0.0040 per                        share |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 4,054,356   |   |   | 406 |   |   | 15,813 |   |   | -- |   |   | -- |   |   | 16,219 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in December for cash, weighted average $0.005                        per share                                  |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | 65,000,000  |   |   | 6,500 |   |   | 307,850 |   |   | -- |   |   | -- |   |   | 314,350 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options                        vesting during the year                                                                                                     |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | --          |   |   | -- |   |   | 3,168 |   |   | -- |   |   | -- |   |   | 3,168 |   |
|                                                                                                                                                       |   |                                               |   |                                               |   |                                    |   |                      |   |                                                                                          |   |                                                                  |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                        loss                                                                                                                            |   |                                               | --     |                                               |   | --                                      |   |                      | --     |                                                                                          |   | --                                                                    |   |                             | --          |   |   | -- |   |   | -- |   |   | -- |   |   | (4,376,139 | ) |   | (4,376,139 | ) |
| Balance,                        December 31, 2006                                                                                                          |   |                                               | 1,369  |                                               |   | --                                      |   |                      | 55     |                                                                                          |   | --                                                                    |   |                             | 330,037,091 |   |   | 33,004 |   |   | 630,214 |   |   | -- |   |   | (4,976,646 | ) |   | (4,313,428 | ) |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                                 |   | **Class                  A Preferred Stock** |   | **Class                  B Preferred Stock** |   | **Common                  Stock** |   | **Additional                  Paid-In** |   | **Receivable                  Related to****Issuance                  of****Common** |   | **Deficit                  Accumulated During the Development** |   | **Total****Stockholders’** |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|--------|-----------------------------------|--------|-----------------------------------------|--------|--------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                                                                                                 |   | **Shares**                                   |   | **Amount**                                   |   | **Shares**                        |   | **Amount**                              |   | **Shares**                                                                           |   | **Amount**                                                      |   | **Capital**                      |       | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                  stock issued in January 2007 for services, weighted average $0.0049                  per                  share (unaudited)  |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 17,220,298 |   |   | 1,722 |   |   | 83,726 |   |   | -- |   |   | -- |   |   | 85,448 |   |
|                                                                                                                                                 |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                                 |   |                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in January 2007 to employees, weighted average $0.0047                  per                  share (unaudited)  |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 3,483,197  |   |   | 348 |   |   | 16,182 |   |   | -- |   |   | -- |   |   | 16,530 |   |
|                                                                                                                                                 |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                                 |   |                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in January 2007 for cash, weighted average $0.005                  per share                  (unaudited)       |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 90,000,000 |   |   | 9,000 |   |   | 441,000 |   |   | -- |   |   | -- |   |   | 450,000 |   |
|                                                                                                                                                 |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                                 |   |                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in February 2007 for services, weighted average $0.0070                  per                  share (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 15,404,838 |   |   | 1,540 |   |   | 111,235 |   |   | -- |   |   | -- |   |   | 112,775 |   |
|                                                                                                                                                 |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                                 |   |                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in February 2007 for cash, weighted average $0.005                  per share                  (unaudited)      |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 15,000,000 |   |   | 1,500 |   |   | 73,500 |   |   | -- |   |   | -- |   |   | 75,000 |   |
|                                                                                                                                                 |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                                 |   |                                                            |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in February 2007 to employees, weighted average $0.0073                  per                  share (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                                 |   | --                                                              |   |                             | 3,030,387  |   |   | 303 |   |   | 22,825 |   |   | -- |   |   | -- |   |   | 23,128 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                             |   | **Class                  A Preferred Stock** |   | **Class                  B Preferred Stock** |   | **Common                  Stock** |   | **Additional                  Paid-In** |   | **Receivable                  Related to****Issuance                  of Common** |   | **Deficit                  Accumulated During the Development** |   | **Total****Stockholders’** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|--------|-----------------------------------|--------|-----------------------------------------|--------|-----------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------|-------------|
|                                                                                                                                             |   | **Shares**                                   |   | **Amount**                                   |   | **Shares**                        |   | **Amount**                              |   | **Shares**                                                                        |   | **Amount**                                                      |   | **Capital**                      |        | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                  stock issued in March 2007 to employees, weighted average $0.008                  per share                  (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | 2,100,226   |   |   | 210 |   |   | 16,592 |   |   | -- |   |   | -- |   |   | 16,802 |   |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in March 2007 for services, weighted average $0.008                  per share                  (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | 5,223,470   |   |   | 522 |   |   | 30,845 |   |   | -- |   |   | -- |   |   | 31,367 |   |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                  of common stock issued to a consultant in 2006 (unaudited)                                                         |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | (4,103,136  | ) |   | (410 | ) |   | (20,590 | ) |   | -- |   |   | -- |   |   | (21,000 | ) |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in April 2007 to employees, weighted average $0.006                  per share                  (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | 10,257,977  |   |   | 1,026 |   |   | 65,423 |   |   | -- |   |   | -- |   |   | 66,449 |   |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in April 2007 for services, weighted average $0.006                  per share                  (unaudited) |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | 25,646,430  |   |   | 2,565 |   |   | 154,435 |   |   | -- |   |   | -- |   |   | 157,000 |   |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in April 2007 for cash, weighted average $0.008 per                  share                  (unaudited)     |   |                                         | --     |                                         |   | --                                |   |                                    | --     |                                                                              |   | --                                                              |   |                             | 131,250,000 |   |   | 13,125 |   |   | 1,036,875 |   |   | -- |   |   | -- |   |   | 1,050,000 |   |
|                                                                                                                                             |   |                                         |   |                                         |   |                              |   |                                    |   |                                                                              |   |                                                            |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in May 2007 to employees, weighted average $0.005                  per share                  (unaudited)   |   |                                         | --     |                                         |   | --                                |   |                                    | -      |                                                                              |   | --                                                              |   |                             | 1,461,038   |   |   | 146 |   |   | 7,890 |   |   | -- |   |   | -- |   |   | 8,036 |   |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH JUNE 30,      2007**

**(continued)**

|                                                                                                                                                        |   | **Class                      A Preferred Stock** |   | **Class                      B Preferred Stock** |   | **Common                      Stock** |   | **Additional                      Paid-In** |   | **Receivable                      Related to Issuance of Common** |   | **Deficit                      Accumulated During the Development** |   | **Total                      Stockholders’** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------|--------|---------------------------------------------|--------|-------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|----------------------------------------------------|-------------|
|                                                                                                                                                        |   | **Shares**                                       |   | **Amount**                                       |   | **Shares**                            |   | **Amount**                                  |   | **Shares**                                                        |   | **Amount**                                                          |   | **Capital**                                        |        | **Stock** |   | **Stage** |   | **Deficit** |   |
| Common                      stock issued in May 2007 for services, weighted average $0.006                      per share                      (unaudited)  |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | 3,075,417   |   |   | 308 |   |   | 17,835 |   |   | -- |   |   | -- |   |   | 18,142 |   |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                      stock issued in May 2007 for cash, weighted average $0.008                      per share                      (unaudited)      |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | 243,750,000 |   |   | 24,375 |   |   | 1,925,625 |   |   | -- |   |   | -- |   |   | 1,950,000 |   |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                      stock issued in June 2007 to employees, weighted average $0.006                      per share                      (unaudited) |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | 2,749,051   |   |   | 275 |   |   | 15,796 |   |   | -- |   |   | -- |   |   | 16,071 |   |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                      stock issued in June 2007 for services, weighted average $0.006                      per share                      (unaudited) |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | 27,650,194  |   |   | 2,765 |   |   | 164,998 |   |   | -- |   |   | -- |   |   | 167,763 |   |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                      of common stock issued to an employee in 2005 (unaudited)                                                                 |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | (100,000    | ) |   | (10 | ) |   | (870 | ) |   | -- |   |   | -- |   |   | (880 | ) |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                      issuance costs (unaudited)                                                                                                       |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | --          |   |   | -- |   |   | (327,500 | ) |   | -- |   |   | -- |   |   | (327,500 | ) |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options                      vesting during the period (unaudited)                                                                                          |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | --          |   |   | -- |   |   | 14,059 |   |   | -- |   |   | -- |   |   | 14,059 |   |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Initial                      fair value of warrants reclassified to derivatives and warrant                      liabilities, as restated, see Note 13      |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | --          |   |   | -- |   |   | (607,875 | ) |   | -- |   |   | -- |   |   | (607,875 | ) |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                      loss (unaudited), as restated, see Note 13                                                                                         |   |                                             | --     |                                             |   | --                                    |   |                                        | --     |                                                              |   | --                                                                  |   |                                               | --          |   |   | -- |   |   | -- |   |   | -- |   |   | (1,662,336 | ) |   | (1,662,336 | ) |
|                                                                                                                                                        |   |                                             |   |                                             |   |                                  |   |                                        |   |                                                              |   |                                                                |   |                                               |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                      June 30, 2007 (unaudited), as restated, see Note 13                                                                           |   |                                             | 1,369  | (1)                                              | $      | --                                    |   |                                        | 55     |                                                              | $      | --                                                                  |   |                                               | 923,136,478 |   | $ | 92,314 |   | $ | 3,872,220 |   | $ | -- |   | $ | (6,638,982 | ) | $ | (2,674,448 | ) |

----

| (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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                      |   | **Six                Months Ended June 30, 2007****(As                Restated, see Note 13)** |       | **Six                Months Ended June 30, 2006** |   | **From                March 4, 2005 (Inception) Through June 30,                2007****(As                Restated, see Note 13)** |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |
| Cash                flows from operating activities:                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |
|                                                                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |
| Net                loss                                                                                   |   | $                                                                                                   | (1,662,336 | )                                                           | $      | (3,086,315                                                                                                                                    | )      | $ | (6,638,982 | ) |
|                                                                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |   |   |   |
| Adjustments                to reconcile net loss to net cash used in operating                activities: |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |   |   |   |
| Initial                fair value of derivative and warrant liabilities                                   |   |                                                                                                | --         |                                                        |   | 2,337,688                                                                                                                                     |   |   | 3,040,453 |   |
| Change                in fair value of derivative and warrant liabilities                                 |   |                                                                                                | 149,174    |                                                        |   | --                                                                                                                                            |   |   | (514,619 | ) |
| Depreciation                                                                                              |   |                                                                                                | 3,811      |                                                        |   | 1,288                                                                                                                                         |   |   | 8,441 |   |
| Stock                issued for services                                                                  |   |                                                                                                | 697,632    |                                                        |   | 214,592                                                                                                                                       |   |   | 1,528,447 |   |
| Loss                on reclassification of capital lease asset                                            |   |                                                                                                | --         |                                                        |   | --                                                                                                                                            |   |   | 2,388 |   |
| Options                vesting during the period                                                          |   |                                                                                                | 14,059     |                                                        |   | 85,000                                                                                                                                        |   |   | 17,227 |   |
| Settlement                gain                                                                            |   |                                                                                                | --         |                                                        |   | --                                                                                                                                            |   |   | (116,000 | ) |
| Accrued                interest added to principal balance, net of interest                payments       |   |                                                                                                | (5,539     | )                                                           |   | 3,542                                                                                                                                         |   |   | 4,406 |   |
| Amortization                of discount on convertible debt                                               |   |                                                                                                | 45,702     |                                                        |   | 1,317                                                                                                                                         |   |   | 109,988 |   |
|                                                                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |   |   |   |
| Changes                in operating assets and liabilities:                                               |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |   |   |   |
| Accounts                receivable                                                                        |   |                                                                                                | (82,380    | )                                                           |   | 23,542                                                                                                                                        |   |   | (52,738 | ) |
| Inventories                                                                                               |   |                                                                                                | (11,084    | )                                                           |   | (4,824                                                                                                                                        | )      |   | (79,801 | ) |
| Prepaid                expenses and other current assets                                                  |   |                                                                                                | (18,136    | )                                                           |   | (380                                                                                                                                          | )      |   | (23,496 | ) |
| Refundable                deposits                                                                        |   |                                                                                                | --         |                                                        |   | --                                                                                                                                            |   |   | 6,430 |   |
| Accounts                payable and accrued expenses                                                      |   |                                                                                                | (582,916   | )                                                           |   | 201,707                                                                                                                                       |   |   | 269,969 |   |
| Payroll                taxes payable                                                                      |   |                                                                                                | (23,582    | )                                                           |   | 66,390                                                                                                                                        |   |   | 119,969 |   |
| Due                to related party                                                                       |   |                                                                                                | 192,006    |                                                        |   | --                                                                                                                                            |   |   | 192,006 |   |
| Deferred                revenue                                                                           |   |                                                                                                | 96,314     |                                                        |   | 14,607                                                                                                                                        |   |   | 157,661 |   |
|                                                                                                      |   |                                                                                                |       |                                                        |   |                                                                                                                                          |   |   |   |   |
| Net                cash used in operating activities                                                      |   |                                                                                                | (1,187,275 | )                                                           |   | (141,846                                                                                                                                      | )      |   | (1,968,251 | ) |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                            |   |   **Six                Months Ended June 30, 2007****(As                Restated, see Note 13)** |      |   **Six                Months Ended June 30, 2006** |   | **From                March 4, 2005 (Inception) Through June 30,                2007****(As                Restated, see Note 13)** |   |
|-----------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|-----------|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |
| Cash                flows from investing activities:            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |
| Cash                acquired in reverse merger                  |   |                                                                                                            | --        |                                                                    |   | --                                                                                                                                            |   |   | 935 |   |
| Purchase                of fixed assets                         |   |                                                                                                            | (55,113   | )                                                                       |   | (651                                                                                                                                          | )      |   | (56,522 | ) |
| Purchase                of intangible assets                    |   |                                                                                                            | (151,604  | )                                                                       |   | --                                                                                                                                            |   |   | (176,604 | ) |
| Net                cash used in investing activities            |   |                                                                                                            | (206,717  | )                                                                       |   | (651                                                                                                                                          | )      |   | (232,191 | ) |
|                                                            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Cash                flows from financing activities:            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Net                change in due to related parties             |   |                                                                                                            | --        |                                                                    |   | (149,101                                                                                                                                      | )      |   | (117,378 | ) |
| Proceeds                from exercise of warrants               |   |                                                                                                            | --        |                                                                    |   | 27,788                                                                                                                                        |   |   | 27,788 |   |
| Proceeds                from issuance of convertible debenture  |   |                                                                                                            | --        |                                                                    |   | 150,000                                                                                                                                       |   |   | 275,000 |   |
| Proceeds                from sale of preferred stock            |   |                                                                                                            | --        |                                                                    |   | --                                                                                                                                            |   |   | 10,000 |   |
| Proceeds                from exercise of employee stock options |   |                                                                                                            | --        |                                                                    |   | 152,823                                                                                                                                       |   |   | 460,378 |   |
| Principal                payments on convertible note payable   |   |                                                                                                            | --        |                                                                    |   | --                                                                                                                                            |   |   | (30,000 | ) |
| Repurchase                of common stock                       |   |                                                                                                            | --        |                                                                    |   | (47,766                                                                                                                                       | )      |   | -- |   |
| Net                proceeds from sale of common stock           |   |                                                                                                            | 3,197,500 |                                                                    |   | --                                                                                                                                            |   |   | 3,515,890 |   |
| Principal                payments on note payable               |   |                                                                                                            | (87,076   | )                                                                       |   | --                                                                                                                                            |   |   | (102,796 | ) |
| Net                cash provided by financing activities        |   |                                                                                                            | 3,110,424 |                                                                    |   | 133,744                                                                                                                                       |   |   | 4,038,882 |   |
|                                                            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Net                change in cash                               |   |                                                                                                            | 1,716,432 |                                                                    |   | (8,753                                                                                                                                        | )      |   | 1,838,440 |   |
|                                                            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Cash,                beginning of period                        |   |                                                                                                            | 122,008   |                                                                    |   | 10,403                                                                                                                                        |   |   | -- |   |
|                                                            |   |                                                                                                            |      |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Cash,                end of period                              |   | $                                                                                                               | 1,838,440 |                                                                    | $      | 1,650                                                                                                                                         |   | $ | 1,838,440 |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                            |   |   **Six                Months Ended June 30, 2007****(As                Restated, see Note 13)** |    |   **Six                Months Ended June 30, 2006** |   | **From                March 4, 2005 (Inception) Through June 30,                2007****(As                Restated, see Note 13)** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|---------|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |
| Supplemental                disclosure of cash flow information:                                                |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |
| Cash                paid for income taxes                                                                       |   | $                                                                                                                    | --      |                                                                    | $      | --                                                                                                                                            |   | $ | -- |   |
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Cash                paid for interest                                                                           |   | $                                                                                                                    | 11,366  |                                                                    | $      | 412                                                                                                                                           |   | $ | 17,061 |   |
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Schedule                of non-cash operating, investing and financing activities:                              |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Acquisition                of Senz-It, Inc. patent, licenses and options                                        |   | $                                                                                                                    | --      |                                                                    | $      | --                                                                                                                                            |   | $ | 1,063,992 |   |
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Acquisition                other assets and liabilities in reverse merger                                       |   | $                                                                                                                    | --      |                                                                    | $      | --                                                                                                                                            |   | $ | (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 reclassification of capital lease                                  |   | $                                                                                                                    | --      |                                                                    | $      | --                                                                                                                                            |   |   | 10,563 |   |
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Discount                on convertible debt                                                                     |   | $                                                                                                                    | --      |                                                                    | $      | --                                                                                                                                            |   | $ | 275,000 |   |
|                                                                                                            |   |                                                                                                                 |    |                                                                    |   |                                                                                                                                          |   |   |   |   |
| Initial                fair value of warrants reclassified to derivative and warrant                liabilities |   | $                                                                                                                    | 607,875 |                                                                    | $      | --                                                                                                                                            |   | $ | 607,875 |   |

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      1 - ORGANIZATION AND BASIS OF PRESENTATION **

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      1 - ORGANIZATION AND BASIS OF PRESENTATION**
**      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      1 - ORGANIZATION AND BASIS OF PRESENTATION**
**      (continued)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (continued)**

**NOTE      3 - INTANGIBLE ASSETS**

**NOTE      4 - DUE TO STOCKHOLDERS**

**NOTE      5 - PAYROLL TAXES PAYABLE**

**NOTE      6 - WARRANTS AND CONVERTIBLE DEBENTURE**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      6 - WARRANTS AND CONVERTIBLE DEBENTURE (Continued)**

| ·   | On                February 7, 2006, $100,000 was disbursed directly to the Company                for the                purchase of the Debenture; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $50,000                was retained for services provided to the Company by various                professionals; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      6 - WARRANTS AND CONVERTIBLE DEBENTURE (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      7 - NOTES PAYABLE**

**NOTE      8 - STOCK COMPENSATION PLANS**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      8 - STOCK COMPENSATION PLANS (continued)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      8 - STOCK COMPENSATION PLANS (continued)**

|                                        |   | 2007   |                     | 2006   |   |
|---------------------------------------------|--------|--------|--------------------------|--------|--------|
| Risk-free                interest rate      |   |   | 4.48                     | %      |   | 5.10 | % |
| Expected                life of the options |   |   | 3-6                years |   |   | 5                years |   |
| Expected                volatility          |   |   | 127                      | %      |   | 139 | % |
| Expected                dividend yield      |   |   | 0                        | %      |   | 0 | % |

|                                                               |   |   Number                of Shares |       |  Weighted                Average Exercise Price |   | Remaining                Contractual Term (Years) |   |  Aggregate                Intrinsic Value |                        |
|--------------------------------------------------------------------|--------|---------------------------------------------|------------|------------------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------------|-----------------------------|
|                                                               |   |                                        |       |                                            |   |                                              |   |                                      |                        |
| Options                outstanding at January 1, 2007              |   |                                        | 16,768,023 |                                                 | $      | 0.013                                             |   |                                           | 3.21                        |   | $ | -- |   |
| Granted                                                            |   |                                        | 45,700,000 |                                                 | $      | 0.005                                             |   |                                           | 3.00                - 10.00 |   | $ | 18,280 |   |
| Expired/forfeited                                                  |   |                                        | --         |                                                 |   | --                                                |   |                                           |                        |   |   |   |   |
| Exercised                                                          |   |                                        | --         |                                                 |   | --                                                |   |                                           |                        |   |   |   |   |
|                                                               |   |                                        |       |                                                 |   |                                              |   |                                           |                        |   |   |   |   |
| Options                outstanding at June 30, 2007                |   |                                        | 62,468,023 |                                                 | $      | 0.007                                             |   |                                           | 7.55                        |   | $ | 18,280 |   |
|                                                               |   |                                        |       |                                                 |   |                                              |   |                                           |                        |   |   |   |   |
| Options                vested or expected to vest at June 30, 2007 |   |                                        | 62,468,023 |                                                 | $      | 0.007                                             |   |                                           | 7.55                        |   | $ | 18,280 |   |
|                                                               |   |                                        |       |                                                 |   |                                              |   |                                           |                        |   |   |   |   |
| Options                exercisable at June 30, 2007                |   |                                        | 17,914,023 |                                                 | $      | 0.013                                             |   |                                           | 2.72                        |   | $ | -- |   |

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      8 - STOCK COMPENSATION PLANS (continued)**

|                                                     |   | June                30, 2007 |       |
|----------------------------------------------------------|--------|------------------------------|------------|
|                                                     |   | Weighted-Average             |            |   |   |   |
|                                                     |   |  Shares                 |       |  Grant-Date                Fair Value |   |  Remaining                Months to Vest |   | Remaining                Unrecognized Compensation Cost |   |
| Non-vested                outstanding at January 1, 2007 |   |                         | 72,000     |   | $ | 0.016 |   |   | 12 |   | $ | 1,152 |   |
| Granted                                                  |   |                         | 45,700,000 |   | $ | 0.003 |   |   | 36                - 60 |   | $ | 138,300 |   |
| Vested                                                   |   |                         | (1,236,000 | ) | $ | 0.016 |   |   |   |   |   | (709 | ) |
| Forfeited                                                |   |                         | --         |   |   | -- |   |   |   |   |   | -- |   |
| Non-vested                outstanding at June 30, 2007   |   |                         | 44,536,000 |   | $ | 0.003 |   |   | 54 |   | $ | 138,743 |   |

**NOTE      9 - STOCKHOLDERS’ DEFICIT**

**Class      A.**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      9- STOCKHOLDERS’ DEFICIT (continued)**

**Class      B.**

**Common      Stock.**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      9- STOCKHOLDERS’ DEFICIT (continued)**

| Shares                issued under the Non-Employee Plan |   |   | 9,923,086   |   |
|----------------------------------------------------------|--------|--------|-------------|--------|
| Shares                issued under the ESIP Plan         |   |   | 107,379,437 |   |
| Private                sale of stock                     |   |   | 480,000,000 |   |
| ESIP                stock returned and cancelled         |   |   | (4,203,136  | )      |
| Total                net shares issued                   |   |   | 593,099,387 |   |

|                                    |   |   |        |  Weighted-Average                Exercise Price |   | Weighted-Average                Remaining Contractual Life |   |
|-----------------------------------------|--------|--------|-------------|------------------------------------------------------|--------|------------------------------------------------------------|--------|
| Balance,                January 1, 2007 |   |   | 58,328,948  |                                                 | $      | 0.007                                                      |   |   | 21                months |   |
| Warrants                issued          |   |   | 120,000,000 |                                                 | $      | 0.020                                                      |   |   | 36                months |   |
| Warrants                exercised       |   |   | --          |                                                 |   | --                                                         |   |   | -- |   |
| Balance,                June 30, 2007   |   |   | 178,328,948 |                                                 | $      | 0.016                                                      |   |   | 29                months |   |

**NOTE      10 - RELATED PARTY TRANSACTIONS**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      10 - RELATED PARTY TRANSACTIONS (continued)**

**Venture      Acceleration Agreement.**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      10 - RELATED PARTY TRANSACTIONS (continued)**

**Office      Space.**

**SUTI      Holdings, LP.**

**NOTE      11 - COMMITMENTS AND CONTINGENCIES**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      11 - COMMITMENTS AND CONTINGENCIES (continued)**

**Operating      Leases.**

**Consulting      Agreement.**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      11 - COMMITMENTS AND CONTINGENCIES (continued)**

**Distributor      Agreements.**

**License      Agreement.**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      11 - COMMITMENTS AND CONTINGENCIES (continued)**

**Indemnities      and Guarantees.**

**NOTE      12 - SUBSEQUENT EVENTS **

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE      12 - SUBSEQUENT EVENTS (continued) **

**NOTE      13 - **
**RESTATEMENT      OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO FINANCIAL STATEMENTS**

**(Unaudited)**

|                                                |   |   | Unaudited                  Condensed Consolidated Balance Sheet |   |
|-----------------------------------------------------|--------|--------|-----------------------------------------------------------------|--------|
| As                  of June 30, 2007                |   |   | As                  Previously Reported                         |   |   | Adjustments |   |   | As                  Restated |   |
|                                                |   |   |                                                            |   |   |   |   |   |   |   |
| Warrant                  and derivative liabilities |   | $      | 2,950,240                                                       |   | $ | 458,469 |   | $ | 3,408,709 |   |
| Total                  liabilities                  |   | $      | 4,505,869                                                       |   | $ | 458,469 |   | $ | 4,964,338 |   |
| Additional                  paid-in capital         |   | $      | 4,480,095                                                       |   | $ | (607,875 | ) | $ | 3,872,220 |   |
| Accumulated                  deficit                |   | $      | (6,788,388                                                      | )      | $ | 149,406 |   | $ | (6,638,982 | ) |
| Total                  stockholders’ deficit  |   | $      | (2,215,979                                                      | )      | $ | (458,469 | ) | $ | (2,674,448 | ) |

|                                                                      |   | Unaudited                Condensed Consolidated Statements of Operations |       |
|---------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|
| Three                months ended June 30, 2007                           |   | As                Previously Reported                                    |       | Adjustments |   | As                Restated |   |
|                                                                      |   |                                                                |       |    |   |    |   |
| Change                in fair value of warrant and derivative liabilities |   | $                                                                        | 518,065    |   | $ | 149,406 |   | $ | 667,471 |   |
| Total                other income (expense)                               |   | $                                                                        | 520,892    |   | $ | 149,406 |   | $ | 670,298 |   |
| Net                (loss) income                                          |   | $                                                                        | (421,010   | ) | $ | 149,406 |   | $ | (271,604 | ) |
| LOSS                PER COMMON SHARE:                                     |   |                                                                     |       |   |   |   |   |   |   |   |
| Basic                and diluted                                          |   | $                                                                        | (0.00      | ) | $ | (0.00 | ) | $ | (0.00 | ) |
|                                                                      |   |                                                                     |       |
|                                                                      |   | Unaudited                Condensed Consolidated Statements of Operations |       |
| Six                Months ended June 30, 2007                             |   | As                Previously Reported                                    |       | Adjustments |   | As                Restated |   |
|                                                                      |   |                                                                |       |    |   |    |   |
| Change                in fair value of warrant and derivative liabilities |   | $                                                                        | (298,580   | ) | $ | 149,406 |   | $ | (149,174 | ) |
| Total                other income (expense)                               |   | $                                                                        | (323,475   | ) | $ | 149,406 |   | $ | (174,069 | ) |
| Net                (loss) income                                          |   | $                                                                        | (1,811,742 | ) | $ | 149,406 |   | $ | (1,662,336 | ) |
| LOSS                PER COMMON SHARE:                                     |   |                                                                     |       |   |   |   |   |   |   |   |
| Basic                and diluted                                          |   | $                                                                        | (0.00      | ) | $ | (0.00 | ) | $ | (0.00 | ) |

|                                                                       |   | Unaudited                Condensed Consolidated Statements of Operations |       |
|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|
| Period                From March 2, 2005 (Inception) Through June 30, 2007 |   | As                Previously Reported                                    |       | Adjustments |   | As                Restated |   |
|                                                                       |   |                                                                |       |    |   |    |   |
| Change                in fair value of warrant and derivative liabilities  |   | $                                                                        | 365,213    |   | $ | 149,406 |   | $ | 514,619 |   |
| Total                other income (expense)                                |   | $                                                                        | (2,709,779 | ) | $ | 149,406 |   | $ | (2,560,373 | ) |
| Net                (loss) income                                           |   | $                                                                        | (6,788,388 | ) | $ | 149,406 |   | $ | (6,638,982 | ) |

----

|                                                                        |   | Unaudited                  Condensed Consolidated Statements of Cash Flows |       |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|------------|
| Six                  months ended June 30, 2007                             |   | As                  Previously Reported                                    |       | Adjustments |   | As                  Restated |   |
| Net                  loss                                                   |   | $                                                                          | (1,811,742 | ) | $ | 149,406 |   | $ | (1,662,336 | ) |
| Change                  in fair value of warrant and derivative liabilities |   | $                                                                          | 298,580    |   | $ | (149,406 | ) | $ | 149,174 |   |

|                                                                       |   | Unaudited                Condensed Consolidated Statements of Cash Flows |       |
|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|
| Period                From March 2, 2005 (Inception) Through June 30, 2007 |   | As                Previously Reported                                    |       | Adjustments |   | As                Restated |   |
| Net                loss                                                    |   | $                                                                        | (6,788,388 | ) | $ | 149,406 |   | $ | (6,638,982 | ) |
| Change                in fair value of warrant and derivative liabilities  |   | $                                                                        | (365,213   | )  | $ | (149,406 | ) | $ | (514,619 | ) |

----

**ITEM      2. **
**Management’s      Discussion and Analysis or Plan of Operation**

**Overview.**

----

----

**Results      of Operations for the Three Months Ended June 30, 2007 (as restated, see Note      13) Compared to the Three Months Ended June 30, 2006      (unaudited).**

|                                               |   | Three                Months EndedJune                30, 2007(As                Restated, see Note 13) |     |  Three                Months EndedJune                30, 2006 |   |
|----------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|----------|---------------------------------------------------------------------|--------|
|                                               |   |                                                                                                   |     |                                                           |   |
| Revenues                                           |   | $                                                                                                      | 69,140   |                                                                | $      | 3,878 |   |
| Cost                of revenue                     |   |                                                                                                   | 50,063   |                                                                |   | -- |   |
| Gross                profit                        |   |                                                                                                   | 19,077   |                                                                |   | 3,878 |   |
| General                and administrative expenses |   |                                                                                                   | 960,979  |                                                                |   | 335,463 |   |
| Loss                from operations                |   |                                                                                                   | (941,902 | )                                                                   |   | (331,585 | ) |
| Other                income (expense), net         |   |                                                                                                   | 670,298  |                                                                |   | (2,357,024 | ) |
| Net                income (loss)                   |   | $                                                                                                      | (271,604 | )                                                                   | $      | (2,688,609 | ) |

----

|                                      |   | Three                Months EndedJune                30, 2007 |    | Three                Months EndedJune                30, 2006 |   |
|-------------------------------------------|--------|---------------------------------------------------------------|---------|---------------------------------------------------------------|--------|
|                                      |   |                                                          |    |                                                          |   |
| Professional                fees          |   | $                                                             | 252,859 |                                                          | $      | 120,226 |   |
| Payroll                expenses           |   |                                                          | 185,706 |                                                          |   | 71,037 |   |
| Rent                                      |   |                                                          | 13,399  |                                                          |   | 16,112 |   |
| Management                fees            |   |                                                          | 232,500 |                                                          |   | - |   |
| Contract                labor             |   |                                                          | -       |                                                          |   | 36,242 |   |
| Advertising                and Promotions |   |                                                          | 60,000  |                                                          |   | - |   |

** **

** **

----

**Results      of Operations for the Six Months Ended June 30, 2007 (as restated, see Note      13)      Compared to the Six Months Ended June 30, 2006      (unaudited).**

|                                               |   | Six                Months EndedJune                30, 2007(As                Restated, see Note 13) |       |  Six                Months EndedJune                30, 2006 |   |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------|--------|
|                                               |   |                                                                                                 |       |                                                         |   |
| Revenues                                           |   | $                                                                                                    | 122,410    |                                                              | $      | 72,537 |   |
| Cost                of revenue                     |   |                                                                                                 | 62,801     |                                                              |   | 31,443 |   |
| Gross                profit                        |   |                                                                                                 | 59,609     |                                                              |   | 41,094 |   |
| General                and administrative expenses |   |                                                                                                 | 1,547,876  |                                                              |   | 769,320 |   |
| Loss                from operations                |   |                                                                                                 | (1,488,267 | )                                                                 |   | (728,226 | ) |
| Other                income (expense), net         |   |                                                                                                 | (174,069   | )                                                                 |   | (2,358,089 | ) |
| Net                income (loss)                   |   | $                                                                                                    | (1,662,336 | )                                                                 | $      | (3,086,315 | ) |

----

|                                      |   | 6                Months EndedJune                30, 2007 |    | 6                Months EndedJune                30, 2006 |   |
|-------------------------------------------|--------|-----------------------------------------------------------|---------|-----------------------------------------------------------|--------|
|                                      |   |                                                      |    |                                                      |   |
| Professional                fees          |   | $                                                         | 387,920 |                                                      | $      | 248,849 |   |
| Payroll                expenses           |   |                                                      | 302,421 |                                                      |   | 254,617 |   |
| Warrant                expense            |   |                                                      | --      |                                                      |   | 27,788 |   |
| Rent                                      |   |                                                      | 25,113  |                                                      |   | 26,752 |   |
| Management                fees            |   |                                                      | 465,000 |                                                      |   | - |   |
| Contract                labor             |   |                                                      | -       |                                                      |   | 36,242 |   |
| Advertising                and Promotions |   |                                                      | 90,750  |                                                      |   | - |   |

** **

** **

**Liquidity      and Capital Resources.**

----

|   | ·  | curtail                operations significantly; |
|--------|--------------|--------------------------------------------------|

|   | · | sell                significant assets; |
|--------|--------|-----------------------------------------|

|   | ·  | seek                arrangements with strategic partners or other parties that may require                us                to relinquish significant rights to products, technologies or markets;                or |
|--------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | explore                other strategic alternatives including a merger or                sale. |
|--------|--------|------------------------------------------------------------------------------------------------|

|                                                     |   | As                ofJune                30, 2007 |      | As                ofDecember                31, 2006 |   |  Change |   |
|----------------------------------------------------------|--------|--------------------------------------------------|-----------|------------------------------------------------------|--------|--------------|--------|
|                                                     |   |                                             |      |                                                 |   |         |   |
| Cash                and cash equivalents                 |   | $                                                | 1,838,440 |                                                 | $      | 122,008      |   | $ | 1,716,432 |   |
| Accounts                receivable                       |   |                                             | 100,854   |                                                 |   | 18,474       |   |   | 82,380 |   |
| Inventories                                              |   |                                             | 90,885    |                                                 |   | 79,801       |   |   | 11,084 |   |
| Prepaid                expenses and other current assets |   |                                             | 23,496    |                                                 |   | 5,360        |   |   | 18,136 |   |
| Total                assets                              |   |                                             | 2,289,890 |                                                 |   | 258,952      |   |   | 2,030,938 |   |
| Accounts                payable                          |   |                                             | 365,575   |                                                 |   | 657,769      |   |   | (292,194 | ) |
| Due                to related party                      |   |                                             | 192,006   |                                                 |   | -            |   |   | 192,006 |   |
| Due                to stockholders                       |   |                                             | 326,474   |                                                 |   | 326,474      |   |   | - |   |
| Payroll                taxes payable                     |   |                                             | 304,488   |                                                 |   | 328,070      |   |   | (23,582 | ) |
| Total                current liabilities                 |   | $                                                | 1,555,629 |                                                 | $      | 1,920,720    |   | $ | (365,091 | ) |

----

*Operating      Activities*

*Investing      Activities*

*Financing      Activities*

----

**Contractual      Obligations.**

| 2007                last six months |   | $      | 25,650  |   |
|-------------------------------------|--------|--------|---------|--------|
| 2008                                |   |   | 53,352  |   |
| 2009                                |   |   | 55,486  |   |
| 2010                                |   |   | 57,705  |   |
| 2011                                |   |   | 60,013  |   |
|                                |   |   |    |   |
|                                |   | $      | 252,206 |   |

----

----

**Critical      Accounting Policies. **

----

*Accounting      for Equity Instruments That are Issued to Other Than Employees for Acquiring,      or      in Conjunction with Selling, Goods or Services*
*Accounting      Recognition for Certain Transactions Involving Equity Instruments Granted to      Other Than Employees*

----

**ITEM      3**
**Controls      and Procedures**

**Evaluation      of Disclosure Controls and Procedures**

----

----

**Remediation      of Material Weaknesses**

**Changes      in Internal Control over Financial Report**
**ing**

----

**PART      II - OTHER INFORMATION**

**ITEM      1. Legal Proceedings**

**ITEM      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

----

**ITEM      3. Defaults Upon Senior Securities**

**ITEM      4. Submission of Matters to a Vote of Security Holders**

**ITEM      5. Other Information**

**ITEM      6. Exhibits**

| 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).                                                                                      |
|   |                                                                                                                                                                                                                                                                          |
| 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 us 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).   |
|   |                                                                                                                                                                                                                                                                                                          |
| 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   | 63⁄4%                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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 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   | 63⁄4%                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 stockholder 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). |

----

| 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 stockholder 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.                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                          |
| 10.11  | $75,000                Factoring Agreement between the Company and JJ Ellis, LLC, dated                April 25,                2005, and attached warrant (incorporated by reference to Exhibit                10.11 of                the Form 10-KSB filed on April 2, 2007).                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                          |
| 10.12  | Addendum                to Factoring Agreement, dated August 8, 2005 (incorporated by reference                to                Exhibit 10.12 of the Form 10-KSB filed on April 2,                2007).                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                          |
| 10.13  | Consulting                Agreement between the Company and Robert Hovee, dated February 21,                2007                (incorporated by reference to Exhibit 10.13 of the Form 10-KSB filed                on                April 2, 2007).                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                          |
| 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).                                                                   |
|   |                                                                                                                                                                                                               |
| 31.1   | Rule                13a-14(a)/15d-14(a) Certification of Robert A. Hovee (filed                herewith).                                                                                                          |
|   |                                                                                                                                                                                                               |
| 31.2   | Rule                13a-14(a)/15d-14(a) Certification of David J. Barnes (filed                herewith).                                                                                                          |
|   |                                                                                                                                                                                                               |
| 32.1   | Section                1350 Certification of Robert A. Hovee (filed herewith).                                                                                                                                     |
|   |                                                                                                                                                                                                               |
| 32.2   | Section                1350 Certification of 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).                        |

----

**SIGNATURES**

|                                          |                                                                                                                                   |                      |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
|                                          | World                  Am, Inc.                                                                                                        |
|                                     |                                                                                                                              |                 |
| Dated: October                  19, 2007 | By:                                                                                                                          | /s/ Robert A. Hovee  |
|                                          | Robert                A. Hovee Its:                   Chief                  Executive Officer,and                  Director |

----