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

                                    FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ TO ______________


                           COMMISSION FILE NUMBER: 0-30639


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

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

          1400 West 122nd Avenue, Suite 104, Westminster, Colorado 80234
                      (Address of Principal Executive Offices)

                                     (303) 452-0022
                               (Company's Telephone Number)

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

     Indicate by check mark whether the Company (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Company was required to file such reports),
and (2) been subject to such filing requirements for the past 90 days.
Yes     X       No            .

     As of June 30, 2005, the Company had 22,083,782 (1) shares of
common stock issued and outstanding.

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

(1)  Adjusted for a one for one hundred reverse split of the common
stock that was effective on January 21, 2005.

                                 TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                            PAGE

         ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

                  CONDENSED CONSOLIDATED BALANCE
                  SHEET AS OF JUNE 30, 2005                                  3

                  CONDENSED CONSOLIDATED STATEMENTS
                  OF OPERATIONS FOR THE THREE AND SIX MONTHS
                  ENDED JUNE 30, 2005 AND JUNE 30, 2004                      5

                  CONDENSED CONSOLIDATED STATEMENT
                  OF STOCKHOLDERS' DEFICIT FOR THE
                  SIX MONTHS ENDED JUNE 30, 2005                             6

                  CONDENSED CONSOLIDATED STATEMENTS
                  OF CASH FLOWS FOR SIX MONTHS ENDED
                  JUNE 30, 2005 AND JUNE 30, 2004                            8

                  NOTES TO CONDENSED CONSOLIDATED
                  FINANCIAL STATEMENTS                                      10

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS             17

         ITEM 3.  CONTROLS AND PROCEDURES                                   27

PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS                                         28

         ITEM 2.  UNREGISTERED SALES OF EQUITY
                  SECURITIES AND USE OF PROCEEDS                            29

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                           29

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE
                  OF SECURITY HOLDERS                                       29

         ITEM 5.  OTHER INFORMATION                                         30

         ITEM 6.  EXHIBITS                                                  30

SIGNATURE                                                                   30


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                                  WORLD AM, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
                                   (Unaudited)

                                      ASSETS

Current assets
Cash                                                             $     2,445
Accounts receivable, net                                              15,829
Inventory                                                             11,084

Total current assets                                                  29,358

Fixed assets, net                                                     18,728

Other assets                                                             350

Total assets                                                          48,436

                     LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued liabilities                             129,206
Due to stockholders                                                  426,663
Payroll taxes payable                                                241,846
Line of credit                                                         7,991
Notes payable                                                         27,109
Convertible note payable, net of discount of $0.00                    30,000
Capital lease obligation                                               9,025

Total current liabilities                                            871,840

Total liabilities                                                    871,840

Commitments and contingencies                                             --

Stockholders' deficit
Class A preferred stock; $0.0001 par value; 40,000,000 shares
Authorized 1,370 shares issued and no shares outstanding                  --

Class B preferred stock; $0.0001 par value; 40,000,000 shares
Authorized no shares issued and outstanding                               --

Common stock; $0.0001 par value; 1,500,000,000 shares
authorized 22,083,782 (1) shares issued and outstanding                2,208

Additional paid-in capital                                         9,280,919

Receivable related to issuance of common stock                      (220,000)

Accumulated deficit                                                (9,886,531)

Total stockholders' deficit                                          (823,404)

Total liabilities and stockholders' deficit                            48,436

(1)  Adjusted for a one for one hundred reverse split of the common
stock that was effective on January 21, 2005.

The accompanying notes are an integral part of these financial statements


                                   WORLD AM, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (Unaudited)



<TABLE>
<CAPTION>
                                       Three Months Ended June 30,      Six Months Ended June 30,
                                       2005                  2004       2005                2004
                                                        (RESTATED)                     (RESTATED)
<S>                                    <C>                 <C>          <C>               <C>
Revenues                               $   108,721        $    41,020   $   294,028      $   178,221
Cost of revenues                            62,888             32,922       185,437           93,592
Gross profit                                45,833              8,098       108,591           84,629

General and administrative                 566,297            781,379     1,012,056        1,260,323

Loss from operations                      (520,464)          (773,281)     (903,465)      (1,175,694)

Other income (expense)
Other income                                   367              4,376         3,774            9,619
Interest income                                  1                 35             1              163
Interest expense                           (18,073)              (336)      (32,759)            (336)

Total other income (expense)               (17,705)             4,075       (28,984)           9,446

Loss before provision for income taxes    (538,169)          (769,206)     (932,449)      (1,166,248)

Provision for income taxes                      --                 --            --               --

Net loss                                  (538,169)          (769,206)     (932,449)      (1,166,248)

Basic and diluted loss per common share      (0.06)             (0.13)        (0.10)           (0.22)

Basic and diluted weighted average common
shares outstanding                       9,585,651 (1)      5,812,898 (1) 9,585,651 (1)    5,357,776
</TABLE>


(1) Adjusted for one for one hundred reverse split of the common stock that was
effective on January 21, 2005

The accompanying notes are an integral part of these financial statements


                                     WORLD AM, INC.
              CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                         FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                       (Unaudited)



<TABLE>
<CAPTION>
                                                                                                  Total
                           Common Stock             Additional        Other       Accumulated Stockholders'
                        Shares        Amount      Paid-in Capital  Receivables      Deficit       Deficit
<S>                     <C>           <C>         <C>              <C>                  <C>     <C>
Balance,
December 31, 2004       8,321,053         832     $ 8,590,858      $  (220,000)     $(8,954,082) $(582,392)

Common stock issued
in January 2005
for services, weighted
average $0.14 per
share                     668,934          67          96,811              --               --     96,878

Common stock issued
in February 2005
for services, weighted
average $0.16 per share   816,965          82         134,323              --               --    134,405

Common stock issued
in March 2005
for services, weighted
average $0.16 per share    89,299           9          14,458              --               --     14,467

Common stock issued
in April 2005
for services, weighted
average $0.10 per share 1,335,979         134         133,470              --               --    133,604

Common stock issued
in May 2005
for services, weighted
average $0.03 per share 3,812,810         381         119,635              --               --    120,016

Common stock issued
in June 2005
for services, weighted
average $0.02 per
   share                6,334,309         633         107,017              --               --    107,650

Common stock issued
in May 2005 in
satisfaction of notes
payable                   434,783          43          17,348              --               --     17,391

Exercise of employee
stock options in
January 2005              269,650          27          23,031              --               --     23,058

Options granted to
employees for
services                       --          --          13,968              --               --     13,968

Warrants recorded as
discount on
Convertible note payable       --          --          30,000              --               --     30,000

Net loss                       --          --              --              --         (932,449) (932,449)

Balance,
June 30, 2005
(Unaudited)            22,083,782       2,208       9,280,919        (220,000)      (9,886,531) (823,404)
</TABLE>



(1)  Adjusted for a one for one hundred reverse split of the common
stock that was effective on January 21, 2005.

The accompanying notes are an integral part of these financial statements


                                   WORLD AM, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                      Six Months Ended June 30,
                                                        2005           2004
                                                                    (RESTATED)

Cash flows from operating activities:
Net loss                                              $  (932,449) $(1,166,248)

Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation                                                2,225        2,180
Stock issued for services                                 620,988      568,560
Amortization of prepaid services related to
issuance of common stock                                       --      184,971
Amortization of discount on convertible note
payable                                                    30,000           --

Changes in operating assets and liabilities:
Change in accounts receivable, net                         14,760       62,044
Change in inventory                                        18,039      (26,366)
Change in other assets                                        300        3,024
Change in accounts payable and accrued liabilities         14,039       63,518
Change in taxes payable                                   (22,754)     (29,286)

Net cash used in operating activities                    (254,852)    (337,603)

Cash flows from investing activities:
Purchase of fixed assets                                   (1,041)      (4,925)

Net cash used in investing activities                      (1,041)      (4,925)

Cash flows from financing activities:
Change in due to related parties                          132,758       38,722
Proceeds from exercise of employee options                 23,058           --
Proceeds (payments) from line of credit                     3,141       (2,025)
Proceeds from notes payable                                39,500           --
Proceeds from convertible note payable                     30,000           --
Principal payments on note payable                         (6,000)      (6,000)
Principal payments on capital lease obligations            (2,114)        (425)
Proceeds related to stock options exercised in 2003
recorded as receivable related to the issuance of
common stock                                                   --      120,000

Net cash provided by financing activities                 220,343      150,272

Net change in cash                                        (35,550)    (192,256)

Cash, beginning of period                                  37,995      229,069

Cash, end of period                                         2,445       36,813

Supplemental disclosure of cash flow information:
Cash paid for income taxes                                     --           --

Cash paid for interest                                         --           --

Schedule of non-cash operating,
investing and financing activities:
Assumption of capital lease obligation                         --       13,590

Issuance of 418,500 shares of common
stock for prepaid services                                     --      265,550

Issuance of 200,000 shares of common
stock for receivable                                           --      220,000

Warrants recorded as discount on
convertible note payable                                   30,000           --

434,783 shares of common stock issued
in satisfaction of notes payable                           17,391           --

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


                                WORLD AM, INC.
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The interim consolidated financial statements present the balance
sheet, statements of operations, stockholders' equity and cash flows
of World Am, Inc. and its subsidiary ("Company").  All significant
intercompany balances have been eliminated in consolidation.

The interim consolidated financial information is unaudited.  In the
opinion of management, all adjustments necessary to present fairly the
financial position as of June 30, 2005 and the results of operations
and cash flows presented herein have been included in the consolidated
financial statements. Interim results are not necessarily indicative
of results of operations for the full year.

The accompanying consolidated financial statements have been prepared
in accordance with Securities and Exchange Commission requirements for
interim financial statements. Therefore, they do not include all of
the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. The financial statements should be read in conjunction
with the Form 10-KSB for the year ended December 31, 2004 of the
Company.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

NOTE 2 - GOING CONCERN

The Company incurred a net loss of approximately $932,000 for the six
months ended June 30, 2005 and the Company's current liabilities
exceeded its current assets by approximately $842,000 at June 30,
2005.  The accumulated deficit was approximately $9,887,000 as of June
30, 2005.  These factors create substantial doubt about the Company's
ability to continue as a going concern. The Company's management has
plans to promote its services, gain clients and expand its
relationships with current clients.  The Company will also seek
additional sources of capital through the issuance of debt and equity
financing, but there can be no assurance that the Company will be
successful in accomplishing its objectives.

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

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Stock-based compensation - The Company applies Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees, and Related Interpretations", in accounting for stock
options issued to employees.  Under APB No. 25, employee compensation
cost is recognized when estimated fair value of the underlying stock
on date of the grant exceeds exercise price of the stock option.  For
stock options and warrants issued to non-employees, the Company
applies Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation".  SFAS No 123 requires the
recognition of compensation cost using a fair value based method
whereby compensation cost is measured at the grant date based on the
value of the award and is recognized over the service period, which is
usually the vesting period.  The Company uses the Black-Scholes
pricing model to calculate the fair value of options and warrants
issued to non-employees.  Stock issued for compensation is valued
using the market price of the stock on the date of the related agreement.

The fair value under SFAS No. 123 is the same as the value as
calculated under APB No. 25 due to the immediate conversion by
employees upon grant of options.

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

Stock split - In January 2005, the Company had a one for 100 reverse
split of common shares authorized and outstanding.  All share and per
share amounts in the accompanying financial statements of the Company
and notes thereto, have been retroactively adjusted to give effect to
the stock splits.

Reclassification - Certain prior year balances have been reclassified
to conform to the current year presentation, which have no effect on
net income.

Inventory - Inventory is stated at the lower of cost or market.  Cost
is principally determined by using the average cost method.  Inventory
consists of raw materials as well as finished goods held for sale.
The Company's management monitors the inventory for excess and
obsolete items and makes necessary valuation adjustments when required.

NOTE 4 - INVENTORY

Inventory totaling $11,084 consists of finished goods.

NOTE 5 - DUE TO STOCKHOLDERS

Due to stockholders totaling $426,663 as of June 30, 2005 consist of a
$2,000 loan from the Company's President, a $2,000 loan from a
stockholder, and unreimbursed expenses and accrued wages to various
stockholders and employees totaling $422,663.  All loans are
unsecured, bearing no interest and due on demand.

NOTE 6 - PAYROLL TAXES PAYABLE

As of June 30, 2005, payroll taxes payable consists of late payroll
taxes for both payroll and stock option activity totaling $241,846.

NOTE 7 - SETTLEMENT LIABILITY

On January 30, 2004, a complaint was filed in the District Court of
Adams County, Colorado: Robert Hainey and Internet Marketing
Solutions, Inc. v. World Am Communications, Inc. and Isotec, Inc.  The
complaint, which has causes of action for breach of contract and
unjust enrichment, alleges that the defendants failed to pay the
plaintiffs for certain consulting and public relations and related
work, reimbursement of certain business expenses incurred on behalf of
the defendants, and to repay a loan made by the plaintiffs to the
defendants.  The complaint sought total monetary damages of
approximately $308,000.

As discussed in Note 15, on July 27, 2005, the Company settled this
matter.  Under the terms of this settlement, the Company is obligated
to pay the sum of $116,000 over a period of four years in semi-annual
installments, beginning on October 1, 2005.  The plaintiffs are
obligated to pay the Company the sum of $2,000 per installment payment
to reimburse it for administrative costs in connection with the
payment.  Accordingly, the Company recorded a settlement liability and
a settlement loss totaling $116,000, with $29,000 recorded as short-
term or amounts due within one year and $87,000 recorded as long-term.

As of June 30, 2005, future payments on the settlement liabilities are
as follows:

July 1, 2005 through December 31, 2005                   $  14,500
2006                                                        29,000
2007                                                        29,000
2008                                                        29,000
2009                                                        14,500

                                                         $ 116,000

NOTE 8 - LINE OF CREDIT

The Company has a line of credit through a credit card company with a
credit line up to $8,260 with an annual variable rate (24.91% at June
30, 2005).  As of June 30, 2005, the balance on the line of credit
totaled $7,991.

NOTE 9 - NOTES PAYABLE

In June 2003, pursuant to a dismissal of action by a certain
individual, the Company entered into a promissory note agreement
totaling $30,000 with the individual.  The note is unsecured, bears no
interest (1.25% interest in the event of default), is payable in
monthly principal only installments of $1,000, and matures December
2005.  As of June 30, 2005, the remaining portion of the note payable
totals $5,000.

During June 2005, the Company received $4,500 from an entity.  The
note is unsecured, bears no interest, and is due on demand.

During April and May 2005, the Company received $20,000 and $15,000,
respectively, from an individual.  The notes are unsecured, bearing
interest at 10% per annum, and due on demand.  During May 2005, the
Company issued stock in satisfaction of $17,391 of the $20,000 note.
Accordingly, as of June 30, 2005, the remaining balance of the notes
total $17,609.

NOTE 10 - CONVERTIBLE NOTE PAYABLE

During February 2005, the Company issued a $30,000 convertible note
payable to an individual in connection with the sale of Units.  The
convertible note is due on demand, is unsecured, and bearing interest
at 10%.  The note is convertible by the holder prior to maturity, in
multiples of $1,000 principal amount, into shares of the Company's
common stock.  The number of shares of the Company's common stock
shall be determined by dividing the principal amount to be converted
by the lowest bid price of the Company's common stock during the 180-
day period following the issuance of the note.  In the event the
holder converts prior to the end of the pricing period, the number of
shares of the Company's common stock shall be determined by dividing
the principal amount to be converted by the lowest reported bid price
of the Company's common stock between the date of issuance of the note
and date of conversion.

The holder of the convertible note also received warrants to purchase
shares of the Company's common stock that expire during February 2008.
The number of warrants to be received by the holder shall be
determined by dividing the purchase price of the Units ($10,000) by
the lowest bid price of the Company's Common stock during the thirty
(30) day period following the Pricing Period.  In the event the holder
exercises prior to the end of the pricing period, the number of shares
of the Company's Common Stock that may be acquired upon exercise of
the warrant shall be determined by dividing the purchase price of the
warrant by the lowest reported bid price of the Company's common stock
between the date of grant and the date of exercise of the warrant.
The Company recorded the value of the warrants totaling $30,000 as a
discount on the convertible note payable that has been fully accreted
as of June 30, 2005.

NOTE 11 - CAPITAL LEASE OBLIGATION

The Company is obligated under a capital lease for manufacturing
equipment.  For financial reporting purposes, minimum lease payments
relating to the equipment have been capitalized.  The capital lease
obligation totaling $10,300 requires twelve minimum monthly lease
payments of $425 and a final payment of $9,450, with an imputed
interest rate of 8.5%.  The future minimum lease payments required
under the capital lease obligation as of June 30, 2005, are as
follows:

April 1, 2005 through December 31, 2005                    $  9,875
Less: amount representing interest                              850

Present value of minimum lease payments                    $  9,025

NOTE 12 - EMPLOYEE STOCK INCENTIVE PLAN

On January 22, 2001, the Company adopted an Employee Stock Incentive
Plan (the Company adopted Amendment No. 3 to this plan on July 15,
2004).  This plan is intended to allow directors, officers, employees,
and certain non-employees of the Company to receive options to purchase
company common stock.  The purpose of this plan is to provide these
persons with equity-based compensation incentives to make significant
and extraordinary contributions to the long-term performance and growth
of the company, and to attract and retain employees.  All 110,000,000
shares of common stock authorized under this plan have been registered
as a result of Form S-8's filed with the SEC (the most recent being in
August 2004).  The options are exercisable at 65% of the fair market
value of the Company's common stock on the date the stock option is granted.

During the six months ended June 30, 2005, the Company granted options
to purchase 269,650 shares (post reverse split) of the Company's
common stock valued at $13,968 under APB No.25.  All options were
immediately exercised for cash totaling $23,058.

NOTE 13 - PREFERRED STOCK

During June 2004, the Company entered into a loan agreement with
Mercatus & Partners, LLC ("Lender") whereby the Lender agreed to use
its best efforts to provide the Company a loan in the maximum amount
of $2,000,000 subject to certain terms and conditions. The Company
agreed to issue 1,370 shares of Class A Preferred stock that is
convertible to common stock at a ratio of 1-to-1,000,000 as collateral
on the loan.  The shares were issued during June 2004 and recorded
them as issued but not outstanding as of June 30, 2005. The lender did
not fund the loan and accordingly, the Company provided a written
demand for the return of the shares, as provided in the loan agreement.

During May 2005, the Lender assigned all rights set forth in the loan
agreement to Coldwater Capital Partners, LLC, including the 1,370
shares of Class A Preferred stock held as collateral on the loan. The
Company has approved this assignment. Through the date of this filing,
the Company has not received funding under the terms of this loan
agreement.

NOTE 14 - RESTATED FINANCIAL STATEMENTS

Subsequent to the issuance of the Company's financial statements as of
June 30, 2004, management became aware that those financial statements
did not reflect certain account balances properly.  Properly
accounting of these items in the revised financial statements has the
following effect:



<TABLE>
<CAPTION>
                                                Six Months         Six Months        Restated
                                                  Ended              Ended           Increase
                                                June 30, 2004     June 30, 2004     (Decrease)
                                                                    (Restated)
<S>                                              <C>                <C>               <C>
Revenues                                         $   178,221        $   178,221       $       --

Cost of revenues                                      93,592             93,592               --

Gross profit                                          84,629             84,629               --

Operating expense                                  1,140,323          1,260,323         (120,000)

Loss from operations                              (1,055,694)        (1,175,694)        (120,000)

Other income                                           9,446              9,446               --

Net loss                                          (1,046,248)        (1,166,248)        (120,000)

Basic and diluted loss per common share                (0.20)             (0.20)           (0.00)
</TABLE>


<TABLE>
<CAPTION>
                                                Three Months       Three Months       Restated
                                                   Ended              Ended           Increase
                                                June 30, 2004      June 30, 2004     (Decrease)
                                                                     (Restated)
<S>                                               <C>                <C>              <C>
Revenues                                          $   41,020         $   41,020       $      --

Cost of revenues                                      32,922             32,922              --

Gross profit                                           8,098              8,098              --

Operating expense                                    730,479            781,379         (50,900)

Loss from operations                                (722,381)          (773,281)        (50,900)

Other income                                           4,075              9,446              --

Net loss                                            (718,306)        (1,166,248)        (50,900)

Basic and diluted loss per common share                (0.00)             (0.20)          (0.00)
</TABLE>



During 2003, shares of the Company's common stock issued for options
exercised were recorded as operating expenses, as discussed in
Footnote 14 to the financial statements included in Form 10-KSB for
the year ended December 31, 2004. The cash consideration, totaling
$60,000 and $60,000, for the shares issued was received during the
three months ended March 31, 2004 and the six months ended June 30,
2004 and reported as a reduction to operating expenses. The
restatement of the statement of operations for the three and six
months ended June 30, 2004 was primarily related to properly reporting
the cash received for options exercised as a reduction to receivable
related to common stock. Additionally, the Company overstated stock
based compensation for the three months ended June 30, 2004 by $9,100.

NOTE 15 - SUBSEQUENT EVENTS

(a)   During July 2005, the Company issued 19,071,920 shares (post-
reverse split) of common stock in satisfaction of services totaling $274,991.

(b)  On January 30, 2004, a complaint was filed in the District Court
of Adams County, Colorado: Robert Hainey and Internet Marketing
Solutions, Inc. v. World Am Communications, Inc. and Isotec, Inc.  The
complaint, which has causes of action for breach of contract and
unjust enrichment, alleges that the defendants failed to pay the
plaintiffs for certain consulting and public relations and related
work, reimbursement of certain business expenses incurred on behalf of
the defendants, and to repay a loan made by the plaintiffs to the
defendants.  The complaint sought total monetary damages of
approximately $308,000.

On July 27, 2005, the Company settled this matter.  Under the terms of
this settlement, the Company is obligated to pay the sum of $116,000
over a period of four years in semi-annual installments, beginning on
October 1, 2005.  The plaintiffs are obligated to pay the Company the
sum of $2,000 per installment payment to reimburse it for
administrative costs in connection with the payment.  Accordingly, the
Company recorded a settlement liability and related loss as discussed
in Note 7.

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

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

Overview.

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

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

     On June 10, 2005, the Company entered into Share Exchange
Agreement with Senz-It, Inc., a California corporation ("Senz-It"),
and its shareholders (a Form 8-K on this transaction incorrectly
reported the date as June 9, 2005).  See Exhibit 10.4.  Under the
terms of this agreement, the Company will issue the following in
exchange for all 1,000,000 shares of Senz-It common stock outstanding:

     (a)  Warrants to purchase a total of 12,000,000 shares of Company
common stock, exercisable at $0.0001 per share for a period of
five years after issuance; and

     (b)  Fifty-five shares of Company Series B preferred stock (each
share of which is convertible, at the option of the holder, at
any time after the issuance of such share into that number of
fully paid and nonassessable shares of common stock equal to 1%
of the outstanding shares of common stock of the Company then
outstanding, after giving consideration to the shares issued as a
result of the conversion, any options, warrants, or other
convertible securities then outstanding, and any other securities
issued simultaneously on the date of conversion).  Each share of
Class B preferred stock will be entitled to the number of votes
to which the holders thereof would be entitled if they converted
their shares of Class B preferred stock at the time of voting.

     According to the terms of the Share Exchange Agreement, the warrants
and the preferred stock are to be issued upon the closing of this
transaction (which is scheduled for sometime in August 2005).

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

Results of Operations.

     Subsequent to the issuance of the Company's financial statements
as of June 30, 2004, management became aware that those financial
statements did not reflect certain account balances properly.
Properly accounting of these items in the revised financial statements
has the following effect:



<TABLE>
<CAPTION>
                                                Six Months         Six Months        Restated
                                                  Ended              Ended           Increase
                                                June 30, 2004     June 30, 2004     (Decrease)
                                                                    (Restated)
<S>                                              <C>                <C>               <C>
Revenues                                       $   178,221          $   178,221       $       --

Cost of revenues                                    93,592               93,592               --

Gross profit                                        84,629               84,629               --

Operating expense                                1,140,323            1,260,323         (120,000)

Loss from operations                            (1,055,694)          (1,175,694)        (120,000)

Other income                                         9,446                9,446               --

Net loss                                        (1,046,248)          (1,166,248)        (120,000)

Basic and diluted loss per common share              (0.20)               (0.20)           (0.00)
</TABLE>


<TABLE>
<CAPTION>
                                                Three Months       Three Months       Restated
                                                   Ended              Ended           Increase
                                                June 30, 2004      June 30, 2004     (Decrease)
                                                                     (Restated)
<S>                                               <C>                <C>              <C>
Revenues                                         $   41,020          $   41,020       $       --

Cost of revenues                                     32,922              32,922               --

Gross profit                                          8,098               8,098               --

Operating expense                                   730,479             781,379          (50,900)

Loss from operations                               (722,381)           (773,281)         (50,900)

Other income                                          4,075               9,446               --

Net loss                                           (718,306)         (1,166,248)         (50,900)

Basic and diluted loss per common share               (0.00)              (0.20)           (0.00)
</TABLE>



     During 2003, shares of the Company's common stock issued for
options exercised were recorded as operating expenses, as discussed in
Footnote 14 to the financial statements included in Form 10-KSB for
the year ended December 31, 2004. The cash consideration, totaling
$60,000 and $60,000, for the shares issued was received during the
three months ended March 31, 2004 and the six months ended June 30,
2004 and reported as a reduction to operating expenses. The
restatement of the statement of operations for the three and six
months ended June 30, 2004 was primarily related to properly reporting
the cash received for options exercised as a reduction to receivable
related to common stock. Additionally, the Company overstated stock
based compensation for the three months ended June 30, 2004 by $9,100.

(a)  Revenues.

     Revenues for the three months ended June 30, 2005 were
$108,721 as compared to $41,020 (as restated) for the three months
ended June 30, 2004, an increase of $67,701 or approximately 165%
Revenues for the six months ended June 30, 2005 were $294,028 as
compared to $178,221 (as restated) for the six months ended June 30,
2004, an increase of $115,807 or approximately 65%.  These increases
were primarily attributed to the continued efforts by the Company in
the acquisition of sales, marketing, advertising, business and legal
talent to complete product development and continue marketing
activities to increase the dealer network and position the Company to
participate in market growth expected in the future.  Although the
increased operating revenues represent an increase in sales, with the
absence of additional operational funding, the Company's ability to
continue as a going concern is still in doubt.

(b)  Cost of Revenues.

     Cost of revenues for the three months ended June 30, 2005 were
$62,888 as compared to $32,922 (as restated) for the three months
ended June 30, 2004, an increase of $29,966 or approximately 91%  Cost
of revenues for the six months ended June 30, 2005 were $185,437 as
compared to $93,592 (as restated) for the six months ended June 30,
2004, an increase of $91,845 or approximately 98%.  These increases
were attributed to increased revenues, as discussed above.  Although
the increases were not proportional to the revenue growth, management
believes these increases in cost of revenues are the direct result of
increased revenues and reflect the fact that costs of revenues
increase as revenues increase.

(c)  General and Administrative Expense.

     The Company was able to reduce the amount of general and
administrative expenses during the three months ended June 30, 2005 by
$215,182 (to $566,297), a reduction of approximately 27% as compared
to $781,379 (as restated) for the three months ended June 30, 2004.
For the six months ended June 30, 2005, the general and administrative
expenses were $1,012,056 as compared to $1,260,323 (as restated) for
the six months ended June 30, 2004, a decrease of $248,267 or
approximately 20%.  The general and administrative expenses reflect
the impact of the use of S-8 stock to compensate needed services by
various professionals in the absence of equity funding.  Although this
is a significant reduction in operating expenses, the Company plans to
continue to pursue revenue growth and expects to utilize a private
placement or other equity offering during 2005, in addition to
utilization of S-8 stock to compensate for certain needed services.

(d)  Loss from Operations.

     The net loss from operations for the three months ended June
30, 2005 was $520,464 as compared to $773,281 (as restated) for the
three months ended June 30, 2004, a decrease of $252,817 or
approximately 33%.  The net loss from operations for the six months
ended June 30, 2005 was $903,465 as compared to $1,175,694 (as
restated) for the six months ended June 30, 2004, a decrease of
$272,229 or approximately 23%.  Management believes these results are
a direct reflection of continued efforts to control expenses and to
increase the net results of operations.  Although the operations are
still losing money, management continues to attempt to slow the rate
of loss.

(e)  Net Operating Loss Carryforward.

     For the fiscal year ending December 31, 2004, the Company
had net operating loss carry forward of $8,954,082 as compared with
$7,094,140 for the previous fiscal year.  Realization of deferred tax
assets is dependent upon future earnings, if any, the timing and
amount of which are uncertain.  Accordingly, the net deferred tax
assets have been fully offset by a valuation allowance.  The increase
in net operating loss carry forward is the result of the Company's
operating loss experienced in fiscal 2004.  These carryforwards, if
not utilized to offset taxable income begin to expire in 2009.
Utilization of the net operating loss may be subject to substantial
annual limitation due to the ownership change limitations provided by
the Internal Revenue Code and similar state provisions.  The annual
limitation could result in the expiration of the net operating loss
before utilization.

Factors That May Affect Operating Results.

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

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

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

     - gain or loss of clients or strategic relationships;

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

     - the ability to build brand recognition;

     - timing of sales to customers;

     - price competition;

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

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

     - changes in governmental regulation; and

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

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

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

(a)  Competition.

     The market for products and services offered by the Company
is highly competitive.  The Company's future success will depend on
its ability to adapt to rapidly changing technologies, evolving
industry standards, product offerings and evolving demands of the
marketplace.

     Some of our competitors have:

     - longer operating histories;

     - larger customer bases;

     - greater name recognition and longer relationships with clients;
       and

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

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

(b)  Technological and Market Changes.

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

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

(c)  New Versions of Company's Products May Contain Errors or Defects.

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

(d)  Protection of Proprietary Rights.

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

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

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

(e)  Economic Conditions.

     The Company's business can be affected by the general
condition of the world economy, as well as by social, political and
military conditions.  In light of the current economic environment
these factors could have a material adverse impact on the Company's
business, operating results, and financial condition and we may
continue to incur losses for the foreseeable future.

(f)  Key Personnel.

     The Company's success is largely dependent on the personal
efforts and abilities of the Company's senior management.  The loss of
certain members of the Company's management, including its chief
executive officer, could have a material adverse effect our business
and prospects.

     The Company intends to recruit in fiscal year 2005 employees
who are skilled in the products of the Company.  The failure to
recruit these key personnel could have a material adverse effect on
the Company's business. As a result, the Company may experience
increased compensation costs that may not be offset through either
improved productivity or higher revenue.  There can be no assurances
that the Company will be successful in retaining existing personnel or
in attracting and recruiting experienced qualified personnel.

Operating Activities.

     The net cash used by operating activities was $254,852 for
the six months ended June 30, 2005 as compared to $337,603 (as
restated) for the six months ended June 30, 2004, a decrease of
$82,751 or approximately 24%.  There were several contributors to this
decrease, including a significant decrease in accounts payable and the
absence of any amortization of prepaid services related to the
issuance of common stock.

Liquidity and Capital Resources.

     As of June 30, 2005, the Company had total current assets of
$29,358 and total current liabilities of $871,840, resulting in a
working capital deficit of $842,482; as of that date, the Company had
cash of $2,445.  During the six months ended June 30, 2005 and 2004,
the Company incurred losses of $932,449 and $1,166,248, respectively,
and the Company had an accumulated deficit of $9,886,531 as of June
30, 2005.  These factors raise substantial doubt as to the Company's
ability to continue as a going concern.  In fact, the Company's
independent accountants' audit report included in the Form 10-KSB for
the year ended December 31, 2004 includes a substantial doubt
paragraph regarding the Company's ability to continue as a going concern.

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

     Our current cash flow from operations will not be sufficient to
maintain our capital requirements for the next twelve months.
Accordingly, the Company will need to continue raising capital through
either debt or equity instruments.  The Company believes it will need
to raise up to $5,000,000 during the next twelve months so it may
continue executing its business plans.  Whereas the Company has in the
past raised capital (in the absence of any equity investment, the
Company has previously relied upon short-term borrowings in the form
of purchase order and invoice factoring), no assurance can be given
that these sources of financing will continue to be available to us
and/or that demand for our equity/debt instruments will be sufficient
to meet its capital needs, or that financing will be available on
terms favorable to the Company.  As of June 30, 2005, the Company had
no significant sources of liquidity.  The financial statements do not
include any adjustments relating to the recoverability and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

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

     - curtail operations significantly;

     - sell significant assets;

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

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

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

Off Balance Sheet Arrangements.

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

Inflation.

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

Critical Accounting Policies.

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

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

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

(b)  Stock-Based Compensation Arrangements.

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

(c)  Revenue Recognition.

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

Forward Looking Statements.

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

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

ITEM 3.  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

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

     As disclosed under Management's Discussion and Analysis of
Financial Condition and Results of Operations and in Note 14 to the
financial statements, subsequent to the issuance of the Company's
financial statements as of June 30, 2004, management became aware that
those financial statements did not reflect certain account balances
properly.  Therefore, the Company believes that its controls and
procedures were ineffective as of that date.  Subsequent to that date,
the Company has taken the following steps to ensure that its controls
and procedures are effective: (a) it has retained as a consultant an
individual that has had experience as the controller of two other
public companies to provide advice to the company regarding such
matters;  (b) it will be retaining the services of a full-time chief
financial officer in the near future.

     As of the end of the period covered by this report, our
management carried out an evaluation, under the supervision and with
the participation of our principal executive officer, of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and
Rule 15d-15(e) of the Exchange Act).  Based upon the evaluation, our
principal executive officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission's rules and forms.

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

Changes in Disclosure Controls and Procedures.

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

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

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

     (a)  On January 30, 2004, a complaint was filed in the District
Court of Adams County, Colorado: Robert Hainey and Internet Marketing
Solutions, Inc. v. World Am Communications, Inc. and Isotec, Inc.  The
complaint, which has causes of action for breach of contract and
unjust enrichment, alleges that the defendants failed to pay the
plaintiffs for certain consulting and public relations and related
work, reimbursement of certain business expenses incurred on behalf of
the defendants, and to repay a loan made by the plaintiffs to the
defendants.  The complaint sought total monetary damages of
approximately $308,000.

     On July 27, 2005, the Company settled this matter.  Under the
terms of this settlement, the Company is obligated to pay the sum of
$116,000 over a period of four years in semi-annual installments,
beginning on October 1, 2005.  The plaintiffs are obligated to pay the
Company the sum of $2,000 per installment payment to reimburse it for
administrative costs in connection with the payment.

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

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

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

     None.  In addition, there were no purchases of common stock of
the Company by the Company or its affiliates during the three months
ended June 30, 2005.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     Not Applicable.

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

     None

ITEM 5.  OTHER INFORMATION.

     (a)  During June 2004, the Company entered into a loan agreement
with Mercatus & Partners, LLC ("Lender") whereby the Lender agreed to
use its best efforts to provide the Company a loan in the maximum
amount of $2,000,000 subject to certain terms and conditions. The
Company agreed to issue 1,370 shares of Class A Preferred stock that
is convertible to common stock at a ratio of 1-to-1,000,000 as
collateral on the loan.  The shares were issued during June 2004 and
recorded them as issued but not outstanding as of June 30, 2005. The
lender did not fund the loan and accordingly, the Company provided a
written demand for the return of the shares, as provided in the loan
agreement.

     During May 2005, the Lender assigned all rights set forth in the
loan agreement to Coldwater Capital Partners, LLC, including the 1,370
shares of Class A Preferred stock held as collateral on the loan. The
Company has approved this assignment. Through the date of this filing,
the Company has not received funding under the terms of this loan
agreement.

     (b)  During July 2005, the Company issued 19,071,920 shares
(post-reverse split) of common stock in satisfaction of services
totaling $274,991.

ITEM 6.  EXHIBITS.

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

                                 SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       World Am, Inc.



Dated: August 18, 2005                 By: /s/ James H. Alexander
                                       James H. Alexander
                                       President/Chief Executive Officer
                                       (principal financial officer)

                                 EXHIBIT INDEX

Number        Description

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

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

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

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

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

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

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

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

3.6     Certificate of Amendment of Articles of Incorporation, dated
        November 8, 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 the Company and Four
        Way Associates, Inc., dated June 1, 2001 (incorporated by
        reference to Exhibit 4.3 of the Form SB-2 filed on August
        28, 2001).

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

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

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

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

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

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

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

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

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

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

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).

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 fled on April
        20, 2004).

10.4    Share Exchange Agreement between the Company, on the one
        hand, and Senz-It, Inc. and the shareholders of Senz-It, on
        the other hand, dated June 10, 2005 (including the
        following: Exhibit A: Shares to be Issued; and Exhibit I:
        Funding Schedule) (not including the following: Exhibit B:
        Warrant; Exhibit C: Series B Preferred Stock Certificate of
        Designation; Exhibit D: World Am Officer's Certificate;
        Exhibit E: Senz It 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) (filed herewith).

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

21      Subsidiaries of the Company (incorporated by reference to
        Exhibit 21 of the Form 10-KSB filed on April 16, 2002).

23      Consent of Independent Registered Public Accounting Firm
        (incorporated by reference to Exhibit 23 of the Form 10-KSB
        filed on April 21, 2005).

31      Rule 13a-14(a)/15d-14(a) Certification of James H. Alexander
        (filed herewith).

32      Section 1350 Certification of James H. Alexander (filed herewith).

99.1    Press release issued by the Company, dated October 7, 2003
        (incorporated by reference to Exhibit 99 of the Form 8-K
        filed on December 30, 2003).

99.2    Press release issued by the Company, dated May 26, 2004
        (incorporated by reference to Exhibit 99 of the Form 8-K
        filed on May 26, 2004).

99.3    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).

99.4    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).

99.5   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).