**UNITED      STATES**
**SECURITIES      AND EXCHANGE COMMISSION**
**Washington,      D.C. 20549**

**Form      10-QSB**

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

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

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

**Commission      file number 0-30639**

**World      Am, Inc.**

| **Nevada**                                                                                                | **90-0142757**                                                    |
|-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
| (State                or other jurisdiction ofincorporation                or organization)               | (I.R.S.                EmployerIdentification                No.) |
|                                                                                                      |                                                              |
| **4340                Von Karman Avenue****Suite                200****Newport                Beach, CA** | **92660**                                                         |
| (Address                of principal executive offices)                                                   | (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**               | **2**                                                                            |
|-------------------------------------------------------------------------|----------------------------------------------------------------------------------|
|                                                                    |                                                                             |   |
| ITEM                  1                                                 | Financial                  Statements (Unaudited)                                | 2 |
|                                                                    |                                                                             |   |
| ITEM                  2                                                 | Management’s                  Discussion and Analysis or Plan of Operation | 44 |
|                                                                    |                                                                             |   |
| ITEM                  3                                                 | Controls                  and Procedures                                         | 56 |
|                                                                    |                                                                             |   |
| TEM                  3A(T)                                              | Controls                  and Procedures                                         | 58 |
|                                                                    |                                                                             |   |
| **PART                  II –                  OTHER INFORMATION** | **59**                                                                           |
|                                                                    |                                                                             |   |
| ITEM                  1                                                 | Legal                  Proceedings                                               | 59 |
|                                                                    |                                                                             |   |
| ITEM                  2                                                 | Unregistered                  Sales of Equity Securities and Use of Proceeds     | 60 |
|                                                                    |                                                                             |   |
| ITEM                  3                                                 | Defaults                  Upon Senior Securities                                 | 61 |
|                                                                    |                                                                             |   |
| ITEM                  4                                                 | Submission                  of Matters to a Vote of Security Holders             | 61 |
|                                                                    |                                                                             |   |
| ITEM                  5                                                 | Other                  Information                                               | 61 |
|                                                                    |                                                                             |   |
| ITEM                  6                                                 | Exhibits                                                                         | 61 |

----

**PART      I-FINANCIAL INFORMATION**

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

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**SEPTEMBER      30, 2007**

**(Unaudited)**

| **ASSETS**                                                                                                                                                                                                                                                                        |   |   |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                                                                                                                                                                                                                              |   |   |       |
| Current                  assets                                                                                                                                                                                                                                                   |   |   |       |
| Cash                  and cash equivalents                                                                                                                                                                                                                                        |   | $      | 1,079,709  |   |
| Accounts                  receivable, net                                                                                                                                                                                                                                         |   |   | 124,727    |   |
| Inventories                                                                                                                                                                                                                                                                       |   |   | 35,486     |   |
| Prepaid                  expenses and other current assets                                                                                                                                                                                                                        |   |   | 12,541     |   |
| Total                  current assets                                                                                                                                                                                                                                             |   |   | 1,252,463  |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Fixed                  assets, net                                                                                                                                                                                                                                                |   |   | 70,708     |   |
| Intangible                  assets                                                                                                                                                                                                                                                |   |   | 179,323    |   |
| Refundable                  deposits                                                                                                                                                                                                                                              |   |   | 3,820      |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Total                  assets                                                                                                                                                                                                                                                     |   | $      | 1,506,314  |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIT**                                                                                                                                                                                                                  |   |   |       |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Current                  liabilities                                                                                                                                                                                                                                              |   |   |       |   |
| Accounts                  payable and accrued liabilities                                                                                                                                                                                                                         |   | $      | 744,259    |   |
| Due                  to related parties                                                                                                                                                                                                                                           |   |   | 70,250     |   |
| Due                  to stockholders                                                                                                                                                                                                                                              |   |   | 325,009    |   |
| Payroll                  taxes payable                                                                                                                                                                                                                                            |   |   | 259,392    |   |
| Deferred                  revenue                                                                                                                                                                                                                                                 |   |   | 34,208     |   |
| Notes                  payable- short-term                                                                                                                                                                                                                                        |   |   | 1,119      |   |
| Convertible                  debentures and accrued interest payable, net of unamortized debt                  discount                  of $141,907                                                                                                                              |   |   | 132,067    |   |
| Total                  current liabilities                                                                                                                                                                                                                                        |   |   | 1,566,304  |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Notes                  Payable –                  long-term                                                                                                                                                                                                                 |   |   | 2,656      |   |
| Derivatives                  and warrant liabilities                                                                                                                                                                                                                              |   |   | 2,337,324  |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Total                  liabilities                                                                                                                                                                                                                                                |   |   | 3,906,284  |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| 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 September 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 September 30, 2007                             |   |   | —    |   |
| Common                  stock; $0.0001 par value; 1,500,000,000 shares authorized, 962,402,813                  shares issued and outstanding as of September 30, 2007                                                                                                            |   |   | 96,240     |   |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                       |   |   | 4,017,190  |   |
| Deficit                  accumulated during the development stage                                                                                                                                                                                                                 |   |   | (6,513,400 | ) |
| Total                  stockholders’ deficit                                                                                                                                                                                                                                |   |   | (2,399,970 | ) |
|                                                                                                                                                                                                                                                                              |   |   |       |   |
| Total                  liabilities and stockholders’ deficit                                                                                                                                                                                                                |   | $      | 1,506,314  |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

|  |   | **Three****Months****Ended****September****30,                  2007** |   | **Three****Months****Ended****September****30,                  2006** |   | **Nine Months****Ended****September****30, 2007** |   | **Nine Months****Ended****September 30,****2006** |   | **Period                  From****March 4, 2005****(Inception)****Through****September 30,****2007** |   |
|--|--------|------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|

|                                                                        |   |   |          |   |   |          |   |   |        |   |   |
|-----------------------------------------------------------------------------|--------|--------|---------------|--------|--------|---------------|--------|--------|-------------|--------|--------|
| Revenues                                                                    |   | $      | 376,884       |   | $      | 135,469       |   | $      | 499,294     |   | $      | 208,006 |   | $ | 957,542 |   |
| Cost                  of revenues                                           |   |   | 225,899       |   |   | 77,841        |   |   | 288,700     |   |   | 109,284 |   |   | 487,312 |   |
| Gross                  profit                                               |   |   | 150,985       |   |   | 57,628        |   |   | 210,594     |   |   | 98,722 |   |   | 470,230 |   |
|                                                                        |   |   |          |   |   |          |   |   |        |   |   |   |   |   |   |   |
| General                  and administrative expenses                        |   |   | 1,076,797     |   |   | 341,782       |   |   | 2,624,673   |   |   | 1,111,102 |   |   | 5,474,651 |   |
| Loss                  from operations                                       |   |   | (925,812      | )      |   | (284,154      | )      |   | (2,414,079  | )      |   | (1,012,380 | ) |   | (5,004,421 | ) |
| Other                  income (expense):                                    |   |   |          |   |   |          |   |   |        |   |   |   |   |   |   |   |
| Miscellaneous                  income (expense)                             |   |   | --            |   |   | 222           |   |   | 1,600       |   |   | 625 |   |   | (13,897 | ) |
| Interest                  income                                            |   |   | 4,934         |   |   | --            |   |   | 34,930      |   |   | -- |   |   | 34,930 |   |
| Settlement                  gain                                            |   |   | --            |   |   | --            |   |   | --          |   |   | -- |   |   | 116,000 |   |
| Interest                  expense                                           |   |   | (24,925       | )      |   | (336,401      | )      |   | (81,416     | )      |   | (2,694,893 | ) |   | (3,232,016 | ) |
| Change                  in fair value of derivative and warrant liabilities |   |   | 1,071,385     |   |   | 1,091,042     |   |   | 922,211     |   |   | 1,091,042 |   |   | 1,586,004 |   |
| Total                  other income (expense)                               |   |   | 1,051,394     |   |   | 754,863       |   |   | 877,325     |   |   | (1,603,226 | ) |   | (1,508,979 | ) |
|                                                                        |   |   |          |   |   |          |   |   |        |   |   |   |   |   |   |   |
| Income                  (Loss) before provision for income taxes            |   |   | 125,582       |   |   | 470,709       |   |   | (1,536,754  | )      |   | (2,615,606 | ) |   | (6,513,400 | ) |
| Provision                  for income taxes                            |   |   | --            |   |   | --            |   |   | --          |   |   | -- |   |   | -- |   |
| Net                  income (loss)                                          |   | $      | 125,582       |   | $      | 470,709       |   | $      | (1,536,754  | )      | $      | (2,615,606 | ) | $ | (6,513,400 | ) |
|                                                                        |   |   |          |   |   |          |   |   |        |   |   |   |   |   |   |   |
| Basic                  income (loss) per common share                       |   | $      | 0.00          |   | $      | 0.00          |   | $      | (0.00       | )      | $      | (0.02 | ) |   |   |   |
|  Basic                  weighted average common shares outstanding     |   |   | 938,319,363   |   |   | 203,794,870   |   |   | 692,341,330 |   |   | 164,070,884 |   |   |   |   |
| Diluted                  income (loss) per common share                     |   | $      | 0.00          |   | $      | 0.00          |   | $      | 0.00        |   | $      | (0.02 | ) |   |   |   |
|                                                                        |   |   |          |   |   |          |   |   |        |   |   |   |   |   |   |   |
| Diluted                  weighted average common shares outstanding         |   |   | 2,796,184,649 |   |   | 1,936,974,396 |   |   | 692,341,330 |   |   | 164,070,884 |   |   |   |   |

----

**WORLD      AM, INC.**
**(A      DEVELOPMENT STAGE COMPANY)**
**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**
**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 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 SEPTEMBER 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 SEPTEMBER 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 SEPTEMBER 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 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 SEPTEMBER 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 SEPTEMBER 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 SEPTEMBER 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 SEPTEMBER 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 SEPTEMBER 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 | ) |
|                                                                                                                                                              |   |                                     |    |                                     |   |                  |   |                      |    |                                                            |   |                                                         |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in July 2007 to employees, weighted average                        $0.005 per share                        (unaudited) |   |                                     | — |                                     |   | —               |   |                      | — |                                                            |   | —                                                      |   |                             | 3,908,833   |   |   | 391 |   |   | 18,669 |   |   | — |   |   | — |   |   | 19,060 |   |
|                                                                                                                                                              |   |                                     |    |                                     |   |                  |   |                      |    |                                                            |   |                                                         |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                        stock issued in July 2007 for services, weighted average                        $0.005 per share                        (unaudited) |   |                                     | — |                                     |   | —               |   |                      | — |                                                            |   | —                                                      |   |                             | 4,624,430   |   |   | 462 |   |   | 22,660 |   |   | — |   |   | — |   |   | 23,122 |   |
|                                                                                                                                                              |   |                                     |    |                                     |   |                  |   |                      |    |                                                            |   |                                                         |   |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Initial                        fair value of warrants reclassified to derivatives and warrant                        liabilities                                  |   |                                     | — |                                     |   | —               |   |                      | — |                                                            |   | —                                                      |   |                             | —     |   |   | — |   |   | (607,875 | ) |   | — |   |   | — |   |   | (607,875 | ) |

----

**WORLD      AM, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONDENSED      CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR      THE PERIOD FROM MARCH 4, 2005 (INCEPTION) THROUGH SEPTEMBER 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 2007 to employees, weighted average $0.004                  per                  share (unaudited)                             |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | 3,831,679                                                           |   |   | 383                                                                   |   |   | 15,845                           |   |   | — |   |   | -                  - |   |   | 16,228 |   |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in August 2007 for services, weighted average $0.004                  per                  share (unaudited)                             |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | 5,438,475                                                           |   |   | 544                                                                   |   |   | 23,639                           |   |   | — |   |   | — |   |   | 24,183 |   |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in September 2007 to employees, weighted average $0.003                  per                  share (unaudited)                          |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | 5,364,392                                                           |   |   | 536                                                                   |   |   | 16,254                           |   |   | — |   |   | — |   |   | 16,790 |   |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Common                  stock issued in September 2007 for services, weighted average $0.003                  per                  share (unaudited)                          |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | 11,357,147                                                          |   |   | 1,136                                                                 |   |   | 36,614                           |   |   | — |   |   | — |   |   | 37,750 |   |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of debenture to common stock issued in September 2007, at the calculated                  conversion price of $.00022 per share  (unaudited) |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | 4,741,379                                                           |   |   | 474                                                                   |   |   | 549                              |   |   | — |   |   | — |   |   | 1,023 |   |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Stock                  issuance costs (unaudited)                                                                                                                             |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | —                                                             |   |   | —                                                               |   |   | (324,750                         | )      |   | — |   |   | — |   |   | (324,750 | ) |
| Options                  vesting during the period (unaudited)                                                                                                                |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | —                                                             |   |   | —                                                               |   |   | 22,049                           |   |   | — |   |   | — |   |   | 22,049 |   |
| Net                  loss (unaudited)                                                                                                                                         |   |   | —                                      |   |   | —                                      |   |   | —                                 |   |   | —                                       |   |   | —                                                             |   |   | —                                                               |   |   | —                          |   |   | — |   |   | (1,536,754 | ) |   | (1,536,754 | ) |
|                                                                                                                                                                          |   |   |                                         |   |   |                                         |   |   |                                    |   |   |                                          |   |   |                                                                |   |   |                                                                  |   |   |                             |   |   |   |   |   |   |   |   |   |   |
| Balance,                  September 30, 2007 (unaudited)                                                                                                                      |   |   | 1,369                                        | (1)    | $      | —                                      |   |   | 55                                      |   | $      | —                                       |   |   | 962,402,813                                                         |   | $      | 96,240                                                                |   | $      | 4,017,190                        |   | $ | — |   | $ | (6,513,400 | ) | $ | (2,399,970 | ) |

|   | (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)**

|                                                                                                      |   | **Nine                Months****Ended****September 30,2007** |       | **Nine                Months****Ended****September 30,****2006** |   | **From****March 4, 2005****(Inception)****Through****September 30,****2007** |   |
|-----------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |
| Cash                flows from operating activities:                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |
|                                                                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |
| Net                loss                                                                                   |   | $                                                                 | (1,536,754 | )                                                                     | $      | (2,615,606                                                                                  | )      | $ | (6,513,400 | ) |
|                                                                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |   |   |   |
| Adjustments                to reconcile net loss to net cash used in operating                activities: |   |                                                              |       |                                                                  |   |                                                                                        |   |   |   |   |
| Initial                fair value of derivative and warrant liabilities                                   |   |                                                              | —    |                                                                  |   | 2,635,118                                                                                   |   |   | 3,040,453 |   |
| Change                in fair value of derivative and warrant liabilities                                 |   |                                                              | (922,210   | )                                                                     |   | (1,091,042                                                                                  | )      |   | (1,586,003 | ) |
| Depreciation                                                                                              |   |                                                              | 9,730      |                                                                  |   | 1,903                                                                                       |   |   | 14,360 |   |
| Stock                issued for services                                                                  |   |                                                              | 834,766    |                                                                  |   | 696,425                                                                                     |   |   | 2,125,959 |   |
| Stock                issued in payment of debt                                                            |   |                                                              | 1,023      |                                                                  |   | —                                                                                     |   |   | 1,023 |   |
| Loss                on reclassification of capital lease asset                                            |   |                                                              | —    |                                                                  |   | —                                                                                     |   |   | 2,388 |   |
| Options                vesting during the period                                                          |   |                                                              | 22,049     |                                                                  |   | 4,320                                                                                       |   |   | 25,217 |   |
| Settlement                gain                                                                            |   |                                                              | —    |                                                                  |   | —                                                                                     |   |   | (116,000 | ) |
| Net                change in accrued interest added to principal balance                                  |   |                                                              | (9,710     | )                                                                     |   | 7,808                                                                                       |   |   | 235 |   |
| Amortization                of discount on convertible debt                                               |   |                                                              | 68,807     |                                                                  |   | 32,896                                                                                      |   |   | 133,093 |   |
|                                                                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |   |   |   |
| Changes                in operating assets and liabilities:                                               |   |                                                              |       |                                                                  |   |                                                                                        |   |   |   |   |
| Accounts                receivable                                                                        |   |                                                              | (106,253   | )                                                                     |   | (41,258                                                                                     | )      |   | (76,611 | ) |
| Inventories                                                                                               |   |                                                              | 44,315     |                                                                  |   | (12,067                                                                                     | )      |   | (24,402 | ) |
| Prepaid                expenses and other current assets                                                  |   |                                                              | (7,181     | )                                                                     |   | (2,704                                                                                      | )      |   | (12,541 | ) |
| Refundable                deposits                                                                        |   |                                                              | —    |                                                                  |   | —                                                                                     |   |   | 6,430 |   |
| Accounts                payable and accrued expenses                                                      |   |                                                              | (288,159   | )                                                                     |   | 213,405                                                                                     |   |   | 564,726 |   |
| Payroll                taxes payable                                                                      |   |                                                              | (68,678    | )                                                                     |   | 69,526                                                                                      |   |   | 74,873 |   |
| Due                to related party                                                                       |   |                                                              | 68,784     |                                                                  |   | —                                                                                     |   |   | 68,784 |   |
| Deferred                revenue                                                                           |   |                                                              | (27,139    | )                                                                     |   | 61,347                                                                                      |   |   | 34,208 |   |
|                                                                                                      |   |                                                              |       |                                                                  |   |                                                                                        |   |   |   |   |
| Net                cash used in operating activities                                                      |   |                                                              | (1,916,610 | )                                                                     |   | (39,929                                                                                     | )      |   | (2,237,208 | ) |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                           |   | **Nine                Months****Ended****September 30,****2007** |      | **Nine                Months****Ended****September 30****2006** |   | **From****March 4, 2005****(Inception)****Through****September30,****2007** |   |
|----------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------|----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|
|                                                           |   |                                                                  |      |                                                                 |   |                                                                                  |   |
| Cash                flows from investing activities:           |   |                                                                  |      |                                                                 |   |                                                                                  |   |
| Cash                acquired in reverse merger                 |   |                                                                  | —   |                                                                 |   | —                                                                               |   |   | 935 |   |
| Purchase                of fixed assets                        |   |                                                                  | (75,949   | )                                                                    |   | (651                                                                                  | )      |   | (77,358 | ) |
| Purchase                of intangible assets                   |   |                                                                  | (154,323  | )                                                                    |   | —                                                                               |   |   | (179,323 | ) |
| Net                cash used in investing activities           |   |                                                                  | (230,272  | )                                                                    |   | (651                                                                                  | )      |   | (255,746 | ) |
|                                                           |   |                                                                  |      |                                                                 |   |                                                                                  |   |   |   |   |
| Cash                flows from financing activities:           |   |                                                                  |      |                                                                 |   |                                                                                  |   |   |   |   |
| Net                change in due to related parties            |   |                                                                  | —   |                                                                 |   | (209,471                                                                              | )      |   | (117,378 | ) |
| Proceeds                from exercise of warrants              |   |                                                                  | —   |                                                                 |   | 27,788                                                                                |   |   | 27,788 |   |
| Proceeds                from issuance of convertible debenture |   |                                                                  | —   |                                                                 |   | 275,000                                                                               |   |   | 275,000 |   |
| Proceeds                from sale of preferred stock           |   |                                                                  | —   |                                                                 |   | —                                                                               |   |   | 10,000 |   |
| Principal                payments on convertible note payable  |   |                                                                  | —   |                                                                 |   | —                                                                               |   |   | (30,000 | ) |
| Repurchase                of common stock                      |   |                                                                  | —   |                                                                 |   | (47,766                                                                               | )      |   | — |   |
| Net                proceeds from sale of common stock          |   |                                                                  | 3,200,250 |                                                                 |   | —                                                                               |   |   | 3,518,640 |   |
| Proceeds                from loans                             |   |                                                                  | 3,970     |                                                                 |   | —                                                                               |   |   | 3,970 |   |
| Principal                payments on note payable              |   |                                                                  | (99,637   | )                                                                    |   | —                                                                               |   |   | (115,357 | ) |
| Net                cash provided by financing activities       |   |                                                                  | 3,104,583 |                                                                 |   | 45,551                                                                                |   |   | 3,572,663 |   |
|                                                           |   |                                                                  |      |                                                                 |   |                                                                                  |   |   |   |   |
| Net                change in cash                              |   |                                                                  | 957,701   |                                                                 |   | 4,971                                                                                 |   |   | 1,079,709 |   |
|                                                           |   |                                                                  |      |                                                                 |   |                                                                                  |   |   |   |   |
| Cash,                beginning of period                       |   |                                                                  | 122,008   |                                                                 |   | 10,403                                                                                |   |   | — |   |
|                                                           |   |                                                                  |      |                                                                 |   |                                                                                  |   |   |   |   |
| Cash,                end of period                             |   | $                                                                     | 1,079,709 |                                                                 | $      | 15,374                                                                                |   | $ | 1,079,709 |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                            |   | **Nine                Months****Ended****September 30,****2007** |    | **Nine                Months****Ended****September 30****2007** |   | **From March 4,****2005****(Inception)****Through****September 30,****2007** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |                                                                  |    |                                                                 |   |                                                                                        |   |
| Supplemental                disclosure of cash flow information:                                                |   |                                                                  |    |                                                                 |   |                                                                                        |   |
| Cash                paid for income taxes                                                                       |   | $                                                                     | 800     |                                                                 | $      | —                                                                                     |   | $ | 800 |   |
|                                                                                                            |   |                                                                  |    |                                                                 |   |                                                                                        |   |   |   |   |
| Cash                paid for interest                                                                           |   | $                                                                     | 18,230  |                                                                 | $      | 412                                                                                         |   | $ | 23,925 |   |
|                                                                                                            |   |                                                                  |    |                                                                 |   |                                                                                        |   |   |   |   |
| Schedule                of non-cash operating, investing and financing activities:                              |   |                                                                  |    |                                                                 |   |                                                                                        |   |   |   |   |
| Acquisition                of Senz-It, Inc. patent, licenses and options                                        |   | $                                                                     | — |                                                                 | $      | —                                                                                     |   | $ | 1,063,992 |   |
|                                                                                                            |   |                                                                  |    |                                                                 |   |                                                                                        |   |   |   |   |
| Acquisition                of 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 |   |
|                                                                                                            |   |                                                                  |    |                                                                 |   |                                                                                        |   |   |   |   |
| Stock                issued in payment of debt                                                                  |   | $                                                                     | 1,023   |                                                                 | $      | —                                                                                     |   | $ | 1,023 |   |

----

**WORLD      AM, INC.**

**(A      Development Stage Company)**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September      30, 2007**

**(Unaudited)**

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

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

**        (continued)**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

**NOTE      3 – INTANGIBLE ASSETS**

**NOTE      4 – DUE TO STOCKHOLDERS**

**NOTE      5 – PAYROLL TAXES PAYABLE**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

**NOTE      6 – WARRANTS AND CONVERTIBLE DEBENTURE**

|   | · | 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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

**NOTE      7 – NOTES PAYABLE**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

**NOTE      8 – STOCK COMPENSATION PLANS**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

**)**

----

**WORLD          AM, INC.**

**(A          Development Stage Company)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September          30, 2007**

**(Unaudited)**

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

|                                        |   | 2007   |                        | 2006   |   |
|---------------------------------------------|--------|--------|-----------------------------|--------|--------|
| Risk-free                interest rate      |   |   | 3.97%-                4.48% |   |   | 5.10% |   |
| Expected                life of the options |   |   | 3-6                years    |   |   | 5                years |   |
| Expected                volatility          |   |   | 127-                140.8%  |   |   | 139% |   |
| Expected                dividend yield      |   |   | 0%                          |   |   | 0% |   |

|                                                       |   |   Number                  of Shares |       |  Weighted                  Average Exercise Price |   | Weighted                  Average Remaining Contractual Term (Years) |   |  Aggregate                  Intrinsic Value |   |
|------------------------------------------------------------|--------|-----------------------------------------------|------------|--------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                       |   |                                          |       |                                              |   |                                                                 |   |                                        |   |
| Options                  outstanding at January 1, 2007    |   |                                          | 16,768,023 |                                                   | $      | 0.013                                                                |   |                                             |        |   | $ | -- |   |
| Granted                                                    |   |                                          | 49,300,000 |                                                   | $      | 0.006                                                                |   |                                             |   |   | $ | -- |   |
| Expired/forfeited                                          |   |                                          | --         |                                                   |   | --                                                                   |   |                                             |   |   |   |   |   |
| Exercised                                                  |   |                                          | --         |                                                   |   | --                                                                   |   |                                             |   |   |   |   |   |
|                                                       |   |                                          |       |                                                   |   |                                                                 |   |                                             |   |   |   |   |   |
| Options                  outstanding at September 30, 2007 |   |                                          | 66,068,023 |                                                   | $      | 0.008                                                                |   |                                             | 7.08   |   | $ | -- |   |
|                                                       |   |                                          |       |                                                   |   |                                                                 |   |                                             |   |   |   |   |   |
| Options                  exercisable at September 30, 2007 |   |                                          | 21,550,023 |                                                   | $      | 0.013                                                                |   |                                             | 2.54   |   | $ | -- |   |

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

|                                                                |   | September                  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                                                             |   |                                | 49,300,000 |   | $ | 0.003 |   |   | 36                  - 60 |   |   | 148,548 |   |
| Vested                                                              |   |                                | (4,854,000 | ) | $ | 0.016 |   |   |   |   |   | (15,913 | ) |
| Forfeited                                                           |   |                                | --         |   |   | -- |   |   |   |   |   | -- |   |
| Non-vested                  outstanding at September 30, 2007  |   |                                | 44,518,000 |   | $ | 0.003 |   |   | 51 |   | $ | 132,635 |   |

**NOTE      9 - STOCKHOLDERS’ DEFICIT**

**Class      A.**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

**Class      B.**

**Common      Stock.**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

| Shares                issued under the Non-Employee Plan |   |   | 9,923,086   |   |
|----------------------------------------------------------|--------|--------|-------------|--------|
| Shares                issued under the ESIP Plan         |   |   | 146,645,772 |   |
| Private                sale of stock                     |   |   | 480,000,000 |   |
| ESIP                stock returned and cancelled         |   |   | (4,203,136  | )      |
| Total                net shares issued                   |   |   | 632,365,722 |   |

|                                       |   |   |        |  Weighted-AverageExercisePrice |   | Weighted-AverageRemainingContractualLife |   |
|--------------------------------------------|--------|--------|-------------|-------------------------------------|--------|------------------------------------------|--------|
| Balance,                January 1, 2007    |   |   | 58,328,948  |                                | $      | 0.007                                    |   |   | 18                months |   |
| Warrants                issued             |   |   | 120,000,000 |                                | $      | 0.020                                    |   |   | 33                months |   |
| Warrants                exercised          |   |   | —     |                                |   | —                                  |   |   | — |   |
| Balance,                September 30, 2007 |   |   | 178,328,948 |                                | $      | 0.016                                    |   |   | 29                months |   |

**NOTE      10 - RELATED PARTY TRANSACTIONS**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

**Venture      Acceleration Agreement.**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

**Operating      Leases.**

**Consulting      Agreement.**

**Distributor      Agreements.**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

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

**License      Agreement.**

**Indemnities      and Guarantees.**

----

**WORLD        AM, INC.**

**(A        Development Stage Company)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**September        30, 2007**

**(Unaudited)**

**NOTE      12 - SUBSEQUENT EVENTS **

----

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

**Overview**

----

----

**Results      of Operations for the Three Months Ended September 30, 2007 (unaudited) Compared      to the Three Months Ended September 30, 2006 (unaudited).**

|                                               |   | Three  MonthsEndedSeptember  30,2007 |      |  Three  MonthsEndedSeptember  30,2006 |   |
|----------------------------------------------------|--------|----------------------------------------------------------|-----------|----------------------------------------------------------------|--------|
|                                               |   |                                                     |      |                                                      |   |
| Revenues                                           |   | $                                                        | 376,884   |                                                           | $      | 135,469 |   |
| Cost                of revenues                    |   |                                                     | 225,899   |                                                           |   | 77,841 |   |
| Gross                profit                        |   |                                                     | 150,985   |                                                           |   | 57,628 |   |
| General                and administrative expenses |   |                                                     | 1,076,797 |                                                           |   | 341,782 |   |
| Loss                from operations                |   |                                                     | (925,812  | )                                                              |   | (284,154 | ) |
| Other                income, net                   |   |                                                     | 1,051,394 |                                                           |   | 754,863 |   |
| Net                income                          |   | $                                                        | 125,582   |                                                           | $      | 470,709 |   |

----

|                                      |   | Three                MonthsEndedSeptember  30,  2007 |    | Three  MonthsEndedSeptember  30,  2006 |   |
|-------------------------------------------|--------|--------------------------------------------------------------------------|---------|----------------------------------------------------------------------|--------|
|                                      |   |                                                                     |    |                                                                 |   |
| Professional                fees          |   | $                                                                        | 367,371 |                                                                 | $      | 194,412 |   |
| Payroll                expenses           |   |                                                                     | 283,103 |                                                                 |   | 108,470 |   |
| Rent                                      |   |                                                                     | 19,042  |                                                                 |   | 12,378 |   |
| Management                fees            |   |                                                                     | 232,500 |                                                                 |   | - |   |
| Advertising                and Promotions |   |                                                                     | 76,200  |                                                                 |   | - |   |

** **

** **

----

**Results      of Operations for the Nine Months Ended September 30, 2007 (unaudited) Compared      to the Nine Months Ended September 30, 2006 (unaudited).**

|                                               |   | Nine                MonthsEndedSeptember                30,2007 |       |  Nine                MonthsEndedSeptember                30,2006 |   |
|----------------------------------------------------|--------|-----------------------------------------------------------------|------------|-----------------------------------------------------------------------|--------|
|                                               |   |                                                            |       |                                                             |   |
| Revenues                                           |   | $                                                               | 499,294    |                                                                  | $      | 208,006 |   |
| Cost                of revenue                     |   |                                                            | 288,700    |                                                                  |   | 109,284 |   |
| Gross                profit                        |   |                                                            | 210,594    |                                                                  |   | 98,722 |   |
| General                and administrative expenses |   |                                                            | 2,624,673  |                                                                  |   | 1,111,102 |   |
| Loss                from operations                |   |                                                            | (2,414,079 | )                                                                     |   | (1,012,380 | ) |
| Other                income (expense), net         |   |                                                            | 877,325    |                                                                  |   | (1,603,226 | ) |
| Net                income (loss)                   |   | $                                                               | (1,536,754 | )                                                                     | $      | (2,615,606 | ) |

----

|                                      |   |  Nine  MonthsEndedSeptember  30,2007 |          |  Nine  MonthsEndedSeptember  30,2006 |   |
|-------------------------------------------|--------|---------------------------------------------------------------|---------------|---------------------------------------------------------------|--------|
|                                      |   |                                                          |          |                                                     |   |
| Professional                fees          |   | $                                                             | 755,291       |                                                          | $      | 443,262 |   |
| Payroll                expenses           |   |                                                          | 530,855       |                                                          |   | 363,087 |   |
| Warrant                expense            |   |                                                          | —  |                                                          |   | 27,788 |   |
| Rent                                      |   |                                                          | 44,155        |                                                          |   | 39,131 |   |
| Management                fees            |   |                                                          | 697,500       |                                                          |   | —  |   |
| Contract                labor             |   |                                                          | —  |                                                          |   | 36,242 |   |
| Advertising                and Promotions |   |                                                          | 166,951       |                                                          |   | —  |   |

** **

** **

**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  ofSeptember  30,2007 |      | As  ofDecember  31,2006 |   |  Change |   |
|------------------------------------------------------------|--------|----------------------------------------------|-----------|---------------------------------------------|--------|--------------|--------|
|                                                       |   |                                         |      |                                        |   |         |   |
| Cash                  and cash equivalents                 |   | $                                            | 1,079,709 |                                        | $      | 122,008      |   | $ | 957,701 |   |
| Accounts                  receivable                       |   |                                         | 124,727   |                                        |   | 18,474       |   |   | 106,253 |   |
| Inventories                                                |   |                                         | 35,486    |                                        |   | 79,801       |   |   | (44,315 | ) |
| Prepaid                  expenses and other current assets |   |                                         | 12,541    |                                        |   | 5,360        |   |   | 7,181 |   |

----

|   |   | As  ofSeptember  30,2007 |   | As  ofDecember  31,2006 |   |  Change |   |
|--------|--------|----------------------------------------------|--------|---------------------------------------------|--------|--------------|--------|

| Total                  assets                          |   |   | 1,506,314 |   |   | 258,952   |   |   | 1,247,362 |   |
|--------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Accounts                  payable and accrued expenses |   |   | 744,259   |   |   | 657,769   |   |   | 86,490    |   |
| Due                  to related party                  |   |   | 70,250    |   |   | -         |   |   | 70,250    |   |
| Due                  to stockholders                   |   |   | 325,009   |   |   | 326,474   |   |   | (1,465    | )      |
| Payroll                  taxes payable                 |   |   | 259,392   |   |   | 328,070   |   |   | (68,678   | )      |
| Total                  current liabilities             |   | $      | 1,566,304 |   | $      | 1,920,720 |   | $      | (354,416  | )      |

*Operating      Activities*

*Investing      Activities*

*Financing      Activities*

----

**Contractual      Obligations.**

| 2007                last three months |   | $      | 12,183  |   |
|---------------------------------------|--------|--------|---------|--------|
| 2008                                  |   |   | 49,218  |   |
| 2009                                  |   |   | 51,185  |   |
| 2010                                  |   |   | 53,232  |   |
| 2011                                  |   |   | 55,362  |   |
|                                  |   |   |    |   |
|                                  |   | $      | 221,180 |   |

----

----

**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 Reporting**

**ITEM      3**
**A(T)**
**Controls      and Procedures**

----

**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**

| (a) | 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).                                                             |

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|   | 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 C. Robert Kline (filed                herewith).                                                                                                |
|   |   |   |                                                                                                                                                                                                               |
|   | 32.1   |   | Section                1350 Certification of Robert A. Hovee (filed herewith).                                                                                                                                     |
|   |   |   |                                                                                                                                                                                                               |
|   | 32.2   |   | Section                1350 Certification of C. Robert Kline (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:                  November                  15, 2007 | /s/                  Robert A. Hovee |
|                                                       | By:                                  | Robert                  A. Hovee |
|                                                       | Its:                                 | Chief                  Executive Officer, |
|                                                       |                                 | and                  Director |

----