U.S. 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:   March 31, 2005
                                  --------------

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

Commission file number:  000-30405

                    Universal Communication Systems, Inc.
                    -------------------------------------
        (Exact name of small business issuer as specified in its charter)

         Nevada                      4812                         860887822
 (State or jurisdiction   (Primary Standard Industrial          (IRS Employer
    of incorporation          Identification No.)               Classification
    or organization)                                               Code No.)

                             407 Lincoln Rd, Suite 12F
                              Miami Beach, FL 33139
                              ---------------------
                    (Address of principal executive offices)

                                 (305) 672-6344
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.

         Class                                    Outstanding as of May 02, 2005
         -----                                    ------------------------------
Common Stock, $.001 par value                               268,996,256

Transitional Small Business Disclosure Format:    Yes [ ] No [X]

<PAGE>

                                TABLE OF CONTENTS

PART I     FINANCIAL INFORMATION                                            Page
                                                                            ----

   Item 1.  Consolidated Financial Statements:

            Consolidated Balance Sheet - March 31, 2005 and
            September 30, 2004                                               3

            Consolidated Statements of Operations for the three months
            and six months Ended March 31, 2005 and 2004                     4

            Consolidated Statements of Cash Flows for the three months
            and six months Ended March 31, 2005 and 2004                     5

            Notes to the Consolidated Financial Statements
            March 31, 2005                                                   6

   Item 2.  Management's Discussion And Analysis Of Financial Condition
            And Results Of Operations                                        7

   Item 3.  Evaluation Of Disclosure Controls And Procedures                10


PART II    OTHER INFORMATION

   Item 1.  Legal Proceedings                                               XX

   Item 2.  Unregistered Sales Of Equity Securities And Use Of ProceedS     XX

   Item 5.  Changes in Securities and Use of Proceeds                       11

   Item 6.  Exhibits and Reports on Form 8-K                                11

   Item 7.  Signatures                                                      12

            Certifications                                                  12

                                       2
<PAGE>

Part I.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                      Universal Communication Systems, Inc.
                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                    March 31,            September 30,
                                                                      2005                   2004
                                                                  ------------           -------------
                                                                  (unaudited)            (see note 1)
                                                                  ------------           -------------
<S>                                                               <C>                    <C>
                                   ASSETS
Current Assets:
   Cash & cash equivalents                                        $    270,604           $    453,134
   Accounts receivable, net                                            254,965                102,009
   Note and other receivable                                           134,192                128,357
   Inventory                                                           678,530                 41,994
   Prepaid expenses                                                     66,958                 65,362
                                                                  ------------           ------------
        Total Current Assets                                         1,405,249                790,856
                                                                  ------------           ------------
Fixed Assets:
   Furniture and equipment                                              84,193                446,475
   Less: Accumulated depreciation                                       43,203                 34,658
                                                                  ------------           ------------
        Total Fixed Assets, Net                                         40,990                411,817
                                                                  ------------           ------------
Other Assets:
   Patents                                                             510,914                540,914
   Goodwill                                                             30,000                 30,000
   Deposits                                                             69,893                 24,133
   Other                                                                25,000                     --
                                                                  ------------           ------------
       Total Other Assets                                              635,807                595,047
                                                                  ------------           ------------
            Total Assets                                          $  2,082,046           $  1,797,720
                                                                  ============           ============

                  LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
   Notes payable                                                  $    393,131           $     60,000
   Accounts payable                                                    500,552                254,012
   Accrued expenses                                                    898,351              1,201,987
   Due to related parties                                               16,186                 31,744
   Liabilities of discontinued operations                              946,794                946,794
                                                                  ------------           ------------
       Total Current Liabilities                                     2,755,014              2,494,537
Long-term Liabilities:
    Convertible debentures                                           1,258,923              2,060,374
                                                                  ------------           ------------
            Total Liabilities                                        4,013,937              4,554,911
                                                                  ------------           ------------
Commitments and Contingencies                                               --                     --
                                                                  ------------           ------------
Stockholders' Deficit:
   Preferred stock, par value $.001 per share,
       10,000,000 shares authorized,
       90,000 and 30,000 shares
       issued and outstanding                                               90                     30
   Common stock, par value $.001 per share,
       800,000,000 shares authorized, 255,436,256 and
       202,900,000 shares issued and outstanding                       255,437                202,900
   Additional paid-in capital                                       35,331,650             32,509,910
   Accumulated deficit                                             (37,425,568)           (35,376,531)
   Accounts receivable, shareholder                                    (93,500)               (93,500)
                                                                  ------------           ------------
       Total Stockholders' Deficit                                  (1,931,891)            (2,757,191)
                                                                  ------------           ------------
             Total Liabilities and Stockholders' Deficit          $  2,082,046           $  1,797,720
                                                                  ============           ============
</TABLE>
                  See notes to condensed financial statements.

                                       3
<PAGE>
                              Universal Communication Systems, Inc.
                        Condensed Consolidated Statements of Operations
                                            UNAUDITED
<TABLE>
<CAPTION>
                                         Three Months Ended March 31,            Six Months Ended March 31,
                                         ----------------------------            --------------------------
                                            2005               2004                 2005             2004
                                         ----------          --------            ----------       ---------
<S>                                     <C>                 <C>                 <C>              <C>
Revenue and other income                 $  349,626          $  52,051           $  851,143       $ 229,327
Cost of goods sold                         (459,555)            (7,598)            (792,467)        (22,170)
                                         ----------          ---------            ---------       ---------
Gross profit                               (109,928)            44,453               58,677         207,157

Operating expenses
   Sales and marketing                       (3,555)           431,258              272,703         675,907
   Product development                            -             30,000                    -         125,904
   General and administrative               899,369            393,937            1,621,011         890,473
                                         ----------          ---------            ---------       ---------
Operating (loss)                         (1,005,742)          (810,742)          (1,835,037)     (1,485,127)

Interest Income                               9,269              5,803               12,187           5,803
Interest expense                           (175,985)          (190,212)            (258,711)       (230,075)
                                         ----------          ---------            ---------       ---------


Net loss                                $(1,172,458)         $(995,151)         $(2,081,561)    $(1,709,399)
                                         ==========          =========            =========       =========

Basic and diluted loss per
share                                    $   (0.01)          $   (0.01)           $  (0.01)       $  (0.01)
                                         ==========          =========            =========       =========

Number of shares used in
computing basic and diluted
loss per share                          250,605,425        122,444,801          226,838,858     104,350,118
                                        ===========        ===========          ===========     ===========
</TABLE>

             See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                              Universal Communication Systems, Inc.
                         Condensed Consolidated Statement of Cash Flows
                                          UNAUDITED
<TABLE>
<CAPTION>
                                                                 For the              For the
                                                                Six Months           Six Months
                                                                  Ended                Ended
                                                                 March 31,            March 31,
                                                                   2005                  2004
                                                               -----------           -----------
<S>                                                            <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Loss                                                   $(2,081,561)          $(1,709,399)
    Adjustments to reconcile net loss from operations
      to net cash used by operating activities:
       Depreciation and amortization expense                        38,545                 2,493
       Interest payable added to principal of
       debentures                                                   25,236                93,699
       Stock issued for services                                   385,600               637,159
       Stock issued for contract settlement                        197,478                    --
       Stock issued in payment of interest                         300,000                    --
       Accrued interest on note receivable                          (5,835)               (5,803)
Changes in operating assets and liabilities:
       Prepaid and other                                            (1,596)               35,185
       Accounts receivable                                        (152,956)             (173,822)
       Inventory                                                  (264,964)             (401,610)
       Deposits                                                    (45,760)              (95,677)
       Accrued expenses                                           (303,636)              514,375
       Accounts payable                                            246,540               195,314
       Other                                                         7,524                 1,209
                                                               -----------           -----------

       Net Cash (Used) by Operating Activities                  (1,655,385)             (906,879)
                                                               -----------           -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
       Purchase of fixed assets                                     (9,290)                   --
                                                               -----------           -----------

       Net Cash (Used) by Investing Activities                      (9,290)                   --
                                                               -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Borrowings on bank credit line                               333,131              (310,467)
      Proceeds from the issuance of common stock                   469,000             1,207,959
      Proceeds from the issuance of preferred stock                600,000                    --
      Decrease in due from related parties                         (15,558)              (61,547)
                                                               -----------           -----------
       Net Cash Provided by Financing Activities                 1,386,573               835,945
                                                               -----------           -----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS                       (182,530)              (70,934)

CASH AND CASH EQUIVALENTS
    AT BEGINNING OF PERIOD                                         453,134               144,682
                                                               -----------           -----------

CASH AND CASH EQUIVALENTS
    AT END OF PERIOD                                           $   270,604           $    73,748
                                                               ===========           ===========
SUPPLEMENTAL DISCLOSURES OF CASH:
       Interest paid                                           $        --           $        --
       Income taxes paid                                       $        --           $        --

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
       Interest accrued on debentures, added to
       the principal of the debentures                         $    25,236           $    93,699
       Interest accrued on the note payable, added
       to the principal of the note                            $     5,835           $     5,803
       Dividends accrued on preferred stock                    $    17,074                    --
       Debentures converted to capital stock                   $ 1,119,738           $   560,000
</TABLE>

                  See notes to condensed financial statements.


                                       5
<PAGE>

                         UNIVERSAL COMMUNICATION SYSTEMS, INC.
                             NOTES TO FINANCIAL STATEMENTS

NOTE 1 - General and Summary of Business and Significant Accounting Policies.

               Basis of Presentation

               The accompanying unaudited condensed financial statements have
               been prepared in accordance with U.S. generally accepted
               accounting principles for interim financial information and with
               instructions to Form 10-QSB and Regulation S-B. Accordingly, they
               do not include all of the information and footnotes required by
               U.S. generally accepted accounting principles for complete
               consolidated financial statements included in this Form 10-QSB.
               The results of operations for any interim period are not
               necessarily indicative of results for the full year. These
               statements should be read in conjunction with the audited
               financial statements and accompanying notes for the year ended
               September 30, 2004

               The balance sheet at September 30, 2004 has been derived from
               audited financial statements, but does not include all of the
               information and footnotes required by U.S. generally accepted
               accounting principles for complete financial statements.

               Background

               The Company is currently focusing its operations on the design,
               manufacture and sale of water production and generation systems
               along with solar power systems.


               Reverse Stock Split

               The Company completed a one-for-one-thousand reverse stock split
               on August 23, 2002. All share and per share information reflects
               this reverse stock split.

NOTE 2 - GOING CONCERN AND SIGNIFICANT RISKS AND UNCERTAINTIES

               The Company's financial statements are prepared using generally
               accepted accounting principles applicable to a going concern
               which contemplates the realization of assets and liquidation of
               liabilities in the normal course of business. The Company has
               experienced losses since inception, and had an accumulated
               deficit of $37,425,568 at March 31, 2004. Net losses are expected
               for the foreseeable future. As such, there is substantial doubt
               as to the Company's ability to continue as a going concern.
               Management is considering alternatives to its business strategy,
               including modifications of its business plan and possible sale or
               licensing of certain assets. Simultaneously, the Company is
               continuing to secure additional capital through sales of common
               stock through the current operating cycle. There is no assurance
               that management will be successful in its efforts.

NOTE 3 - BASIC AND DILUTED NET LOSS PER SHARE CALCULATION

               Loss per common share is calculated in accordance with Statement
               of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
               Share." Basic loss per share is computed by dividing the loss
               available to common shareholders by the weighted-average number
               of common shares outstanding. Diluted loss per share is computed
               similar to basic loss per share, except that the denominator is
               increased to include the number of additional common shares that
               would have been outstanding if the potential common shares had
               been issued and if the additional common shares were dilutive.
               For the three and six months ended March 31, 2005 and 2004,
               common stock equivalents have been excluded from the
               aforementioned computations as their effect would be
               anti-dilutive.

                                       6
<PAGE>

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         Except for historical information contained herein, the statements in
this report (including without limitation, statements indicating that the
Company "expects," "estimates," anticipates," or "believes" and all other
statements concerning future financial results, product offerings, proposed
acquisitions or combinations or other events that have not yet occurred) are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995, Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended. Forward-looking statements involve known and unknown
factors, risks and Uncertainties, which are discussed below and in the Company's
other filings with the Securities and Exchange Commission, and which may cause
the Company's actual results in future periods to differ materially from
forecasted results. Forward looking statements are all based on current
expectations, and the Company assumes no obligation to update this information.

RISK FACTORS

         We will require additional capital in the short term to remain a going
concern.

         We will require substantial short term outside investment on a
continuing basis to finance our current operations and any limited capital
expenditures identified to protect existing investments. Since inception, we
have generated little revenue and have incurred substantial expenditures. We
expect to continue to experience losses from operations while we reorganize our
wireless Internet service system and possibly develop other technologies or
activities. In view of this fact, our auditors have stated in their report for
the period ended September 30, 2004 that our ability to meet our future
financing requirements, and the success of our future operations, cannot be
determined at this time. In order to finance our working capital requirements we
are negotiating equity investments, but there can be no assurance that we will
obtain the required capital or that it will be obtained on terms favorable to
us. If we do not obtain short term financing we may not be able to continue as a
viable concern. We do not have a bank line of credit and there can be no
assurance that any required or desired financing will be available through bank
borrowings, debt, or equity offerings, or otherwise, on acceptable terms, if at
all. If future financing requirements are satisfied through the issuance of
equity securities, investors may experience significant dilution in the net book
value per share of common stock.

BUSINESS AND ORGANIZATION

         Universal Communication Systems, Inc. (collectively the "Company", "us"
or "we"), prior to 2003, was engaged in activities related to advanced wireless
communications, including the acquisition of radio-frequency spectrum
internationally. Currently, our activities related to the advanced wireless
communications are conducted only by our investment in Digital Way, S.A., a
Peruvian communication company and former wholly owned subsidiary. We currently
hold a twenty seven percent interest in Digital Way, S.A., however, due to a
lack of cooperation from their management, our financial results do not include
our interest in their activities.

We currently have four channels of activity, each conducted by a wholly owned
subsidiary. Air Water Corporation, ("AirWater") a Florida corporation formed in
March, 2003, has been established to design, manufacture (utilizing contract
manufacturing organizations) and market systems that perform water extraction


                                       7
<PAGE>

from air. Millennium Electric T.O.U. Ltd., ("Millenium") an Israeli company,
acquired September, 2003, specializes in the development and installation of
solar power systems worldwide, primarily to government and industrial users.
Solar Style, Inc. USA and Solar One, Inc., (collectively, "Solar") both Florida
corporations with offices in Baltimore, Maryland, manufacture (subcontracted to
third parties) and market portable photovoltaic cells in leather cases for
consumer electronic products. Solar was formed to source the manufacturing and
to market the product line of photovoltaic consumer energy panel products
designed by Solar Style, Ltd., a wholly owned Israeli subsidiary. Solar is
offering PV Solar Chargers for a wide range of products, including Solar
Chargers for Laptop computers, "PDA" devices, portable CD players, as well as a
wide range of cellular phones. Lastly, we have recently become involved in the
marketing of a pilotless reconnaissance aircraft product, manufactured by
BlueBird Aeronautical Company.

AirWater's initial action was to obtain licensing rights to the technology. To
that end, we formed AirWater Patents, Inc. who currently holds the acquired four
patents we received under an agreement dated March 24, 2003, relating to this
technology, from J. J. Reidy & Company, Inc. of Holden, Massachusetts. Under the
terms of the global marketing and licensing agreement, we paid $100,000 in cash
and 4 million shares of restricted common stock, along with an advance of
$10,000 per month for a twelve month period against royalties. The royalty
advance payments concluded October 31, 2004. We are still obligated to pay a
royalty payment of between 5 to 7.5% on all sales of equipment which uses the
patented technology. The total payment under the agreement was valued at
$420,000. In January 2005, we received a termination notice from J. J. Reidy &
Company, Inc., the patent holders, indicating that the Global License Agreement
that was entered into in March 2003, was breached. We have filed an action in
the US District Court for the Southern District in Florida in response and we do
not anticipate an impact on our revenue or operations from this dispute. This is
further described in Part II item 1, Legal Proceedings. At this time, and
pending resolution of the issues, no royalty or other payments are being made.

OUTLOOK

         We will require short-term outside investment on a continuing basis to
finance our current operations and capital expenditures. If we do not obtain
short term financing we may not be able to continue as a viable concern.
Although our Israeli subsidiary has a bank credit line, Universal Communication
Systems, Inc. does not have a bank line of credit and there can be no assurance
that any required or desired financing will be available through bank
borrowings, debt, or equity offerings, or otherwise, on acceptable terms. If
future financing requirements are satisfied through the issuance of equity
securities, investors may experience significant dilution in the net book value
per share of common stock.

Beginning in March 2003 we pursued various consulting, marketing and sales
agreements. The activities covered by these agreements include, product design,
electrical and mechanical engineering, systems integration, research and
development, conceptual designs, global contacts, mergers and acquisitions,
product and company publicity, marketing, sales and general business consulting.
Our plan for development of the AirWater and photovoltaic product lines call for
utilizing outside consultants and agents to assist and/or perform the
manufacturing, marketing, sales and integration of our products to the end
users.

In certain global areas where electricity and/or gas power sources are either
not available or in short supply, there is a need for a power alternative to
conventional sources. In 2003 the acquisition of Millennium was consumated to
fulfill this technological need of providing photovoltaic ("PV") Electric Energy
to provide the necessary power for the air-water system.

Millenium and its president, Mr. Ami Elazari, operate in the forefront of the
high technology field of solar energy, solar panels, and solar powered consumer
products. The Company and Mr. Elazari are the holders of more than 21
international patents relating to both PV and solar energy systems and products.

                                       8
<PAGE>

INTERNATIONAL SALES AND MARKETING

We are focusing our sales efforts in the European, African, Middle Eastern and
Asian government and industrial markets for the AirWater and Millenium product
and service offerings. Solar One is targeting the North American and European
consumer markets. Our sales strategy is to engage independent sales consultants,
who are commission based, and thus create a more extensive marketing and
networking program than that which could be achieved using an employee based
salesforce alone.

Since the company started marketing AirWater machines and systems, we have made
inroads into many international markets. We are concentrating our sales and
marketing efforts on making large "country sized" sales to governments, federal
and local authorities, as well as to international aid agencies. We recognize
that because of the complexity of the product, the sales cycle of the AirWater
products and systems are somewhat longer than was previously projected. However,
management remains confident that sales will continue to grow in 2005.

ACTIVITIES OF AIR WATER CORP

In December 2004, the Tsunami Disaster in South East Asia struck. This primarily
affected the countries of Thailand, Indonesia and Sri Lanka as well as parts of
India.

In the days following the Tsunami Disaster, our company announced that it was
donating several Air Water machines for immediate dispatch to the region. During
the months of January and February, the company manufactured about 20 machines
for relief work, but we were only able to ship thirteen of those machines due to
constraints in the receiving countries. We shipped two machines to Thailand, ten
to Sri Lanka, and one machine to India. In recognition of our commitment, we
have retained the remaining 7 machines in storage for use in future disaster
needs. In addition, we purchased 12,500 Water Bags and other needed equipment,
and air shipped all the machines and associated equipment to the various
countries.

The donated machines in Sri Lanka were received by the Prime Minister on behalf
of the government, and were deployed in various disaster relief areas. In
Thailand, the Government took possession of the 2 machines sent there, and
deployed the machines in the disaster affected areas.

In Sri Lanka, the company donated several machines to the relief camps operated
by ISRAAID, a relief agency from Israel. The machines were primarily used to
produce water for food preparation in the camps operated by volunteers from
Israel. In one such camp, the machines contributed to the production of some
5,000 meals per day for the victims of the disaster. In separate areas, we have
self operated the machines to provide much needed fresh drinking water to the
local populace. The local arrangements and services were provided by Air Water
Lanka Limited, the local distributor of Air Water machines and services.

We have sold machines in container loads to Australia, Sri Lanka, USA, and
Thailand. In addition, we have sold sample machines to many countries worldwide,
indicating a significant increase in global interest in our machines.

In addition, during January, Millennium, donated 1,000 portable Solar Chargers
to international aid workers, spread throughout the disaster areas. These Solar
Chargers are ideal for re-charging mobile / cellphones and other digital
electronic machines in areas where there is little if any electric power.

In January 2005, we issued an appeal for charitable donations from the public
for continuing aid to the Tsunami affected areas. In total, we received
donations of $50,638.76. All of these funds were utilized as part of the costs
related to the donation of machines and services, which totaled $94,000.

                                       9
<PAGE>

The company has received letters of commendation as well as appreciation from
the Governments of both Sri Lanka and Thailand. During the period January -
March 2005, customer orders were received for 140 Air Water Machines for
Australia, an order for 270 Air Water machines for Sri Lanka and an order for
120 machines for a customer in Texas. We also received an order for 130 machines
for a new customer in Thailand. These AirWater SOHO styled machines were made in
our contracted production facilities in China and shipped to the destinations in
sealed containers.

During January 2005, AirWater received an order for 140 Air Water Machines for
Australia. Under an agreement with the buyer, we received 50% of the amount
invoiced in cash funds, and the balance in a 30% share equity in the Licensee's
company, AIR-WATER INTERNATIONAL PTY LTD. As of March 31st 2005, while we have
received an acknowledgment and agreement for the share equity transaction, we
have not received the share certificate. We have included $25,000 in other
assets as the estimated value of the equity shares to be received. We anticipate
receiving the stock certificate in the third quarter of the current fiscal year.
Because the transaction is not complete, none of this company's results of
operations are included in the accompanying financial statements.

We have received inquiries and orders for sample AirWater machines during the
period January through March, 2005. We have received inquiries for orders for
various models of our range of machines from Spain, Germany, Dubai, Panama,
India, Nigeria, Singapore, Jordan and Oman. In addition, we believe interest in
the larger models of AirWater machines is growing and government officials from
several countries have been discussing the potential purchase of these machines
for possible deployment in rural areas and (drinkable) water starved villages in
various third world communities.

The increased activity in both initial inquiries and sample order requests for
our AirWater machines has bolstered our belief that our business plan and
marketing model will place us in a dominant position as one of the leaders in
the new business of Air to Water technology, machines and systems.

Our subsidiary, Air Water Corporation, recently released a short film on its
activities in Sri Lanka as well as information on the production of AirWater
machines. This film may be accessed on line by visiting our web address and
clicking on the applicable link. On either www.ucsy.com or www.airwatercorp.com

ACTIVITIES OF ATMOSPHERIC WATER TECHNOLOGIES INC

NEW BUSINESS IN INDIA

Our newest subsidiary, Atmospheric Water Technologies, Inc. ("AWT") entered into
a License Agreement with Watermaker (India) PVT Limited, of Mumbai India. Under
the terms of the agreement, Watermaker (India) will pay a License Fee of
$100,000 for the exclusive rights to manufacture and / or market a range of Air
Water and Watermaker branded machines in all of the Indian sub-continent. AWT
has received the first payment of $10,000 under the agreement. Under separate
arrangements, the balance of the Licensing Fee will be paid over a period of 18
months.

We plan to offer and market many of the Air to Water machines in the Indian
market. India, with a population of about 1.3 billion people, is a large country
that has serious and immediate water needs, and our plans are to secure a major
share of this growing marketplace. In addition, we are working together with our
Licensee to place a prototype special purpose and unique air water machine with
the Indian Army.

Our Indian Licensing agreement was entered into with a well established group,
whose company and other business entities have been in business for over 100
years. This group has been one of the leading organizations, with dealings in
activities ranging from the travel industry, global logistics, freight
forwarding and clearing, handling and representing major international accounts
through their extensive network. We feel this group is most qualified and able
to perform in the Air to Water Industry, and will be a great asset in our


                                       10
<PAGE>

efforts to further promote our company's complete range of products and services
in the India market.

ACTIVITIES OF MILLENNIUM ELECTRIC

Millennium Electric concluded an agreement and entered into a sale and
distribution agreement with Prom Sol Enrg., a well established Spanish company
operating in the energy field. The agreement calls for the installation of ten
rooftop, grid-connected 100 kW PV Solar Energy Systems using our patented,
state-of-the-art photovoltaic technology. This first agreement calls for an
initial payment of $320,000 for the first phase, which is a 50 kW system
installation. In addition, Prom Sol Enrg. has contracted to purchase $50,000 in
value for a container of PV Solar Products. Under the terms of the agreement,
Millennium Electric TOU Limited will install its patented Multi Solar System
(MSS) in a private area on the shores of Spain. This is part of a broader
agreement with the local Spanish company which is a division of the Goldman
Group (a group of companies operating in Europe, and originating from Kazakhstan
and Russia), that will be expanded up to a total of a 1 MW PV grid-connected
system in Spain, valued at Euro 6 million.

LISTING ON FOREIGN EQUITIES EXCHANGE

On December 1, 2003, the company obtained a listing on the Berlin Exchange in
Germany. The company was assigned the trading symbol "UCV." We have engaged the
services of the Geneva Group, an entity with expertise in marketing and
corporate promotions, to bring to the German investor an awareness of our
business, as well as an awareness of our stock listing on the German exchange.
We have been advised that we do not have any regulatory filings in connection
with this listing beyond what is required for our United States securities
filings.

OVERSEAS AND SUBSIDIARY OFFICES.

In line with marketing and sales needs of AirWater and PV Solar Products, we
conduct sales efforts through strategic arrangements with loal entities in
Paris, France from which we concentrate our African efforts. In addition, we
have set up representation in Australia, Mexico, Brazil, Sri Lanka, Morocco and
China. As previously reported, Solar has set up offices in Baltimore, Maryland
for the sales and marketing of Solar Products and Systems.

NEW BUSINESS SEGMENT

In late December, 2004, as previously reported, we established a "Security
Products Division" after completing the negotiation for international marketing
rights for a range of unmanned aerial vehicles ("UAV") or Pilotless Planes and
related technologies.

With the growing global need for high-tech security-related products, we see an
opportunity to get involved in that industry. Through our marketing partners
E.T.I , Electro Tech International Ltd (www.e-t-i.co.il), we were introduced to
BlueBird Aero Systems Limited (www.bluebird-uav.com), designers and
manufacturers of a unique range of UAV Pilotless Planes. Their products are
perfectly suited for use with the US Military, Law Enforcement Agencies, INS,
DEA and other US and worldwide government agencies whom we are currently
approaching for our AirWater products. A marketing and product brochure is
available on our web site. We are continuing our sales and marketing efforts,
and have received serious interest from several overseas customers.

In April we announced the formamtion of a wholly owned overseas subsidiary, MISA
WATER PRODUCTS LIMITED, for the purposes of setting up a "water from air"
bottling plant operation. In the initial phase, it is anticipated that the plant
will produce about 36,000 bottles of clean, clear, pure, filtered and
mineralized water. We are moving into this business segment to further establish
our corporate identity and our range of products and services.


                                       11
<PAGE>

We are planning for the new 'water from air' bottling plant (which may be
considered the World's first such facility), to be located in the eastern
Mediterranean, and we further expect that once the first plant is in production,
more bottling plants as this prototype, will be licensed to other areas and
countries / corporations who recognize the need and growth potential of such
plants.

In a separate matter, Air Water Corporation has received an order for 140 new
air water machines for South Africa. We are in the process of finalizing this
order.

MILLENNIUM ELECTRIC

Millennium Electric T.O.U. Ltd, the company entered into and signed a Strategic
Collaboration Agreement with the Israeli "Technion" based in Haifa, Israel, to
co-operate jointly in research and development activities in the fields of
energy, water treatment and environmental issues. The strategic collaboration
involves, along with other matters, common proposals in the submission to
relevant calls in the EC (European Commission) Framework Program, and initiation
of Programs within the Israeli Industrial Academic Research Framework. The
Agreement was concluded with Alex Gordon, head of the liaison office of the
Technion R&D Foundation Ltd. The company has submitted an application for
funding in the fields of energy, water extraction from air, as well as water
treatment, and other environmental projects. These applications and submissions
have been made to the Commission for the European Community,
(http://europa.eu.int) in the framework of the Cooperative Research Program, for
ongoing development within the framework of the FP6, and FP7 European Commission
R&D projects. The projects, in a range of Euro 3.5 Million, also includes
several other European participants and will once again be coordinated by
Millennium Electric, the exclusive holders of the International Patents, as well
as the relevant Technologies and other Applications.

The objective of this collaboration agreement is to further develop our
world-class Millennium brand of ideas, products and patented technologies, and
continue to move in the direction of the solar industry which is Building
Integrated Photo-Voltaic Energy Production Systems, by developing a new
generation of advanced PV Solar Panels that will be capable of being integrated
into any type of building, to serve as different structural elements whether as
roof tiles, windows or even facades. To date, over 600 such Systems have been
successfully installed in Israel and around the world and have been working
successfully for over 13 years. This new collaboration agreement with the Haifa
Technion and the European Commission will help move this technology into the
next phase, and bring the next generation of 'Green Energy' to the world
industry and beyond. The company believe that this new major agreement will open
the door for us to many new Solar Energy markets.

In April 2005, Millennium Electric, announced that an agreement had been signed
with Azur Solar (UK) Ltd. (www.azure-solar.co.uk), granting them distribution
for the UK market for the range of Millennium Brand PV Solar Panels and related
products. In addition, the agreement calls for Azur Solar to purchase up to $15
million in value of PV Solar Energy Panels for the UK market during 2005. This
new export order is once again a major endorsement of the high quality of
Millennium Brand PV Solar Energy Panels.

ACTIVITIES OF SOLAR STYLE INC

Solar Style announced the launch of a new range of Patented PV Solar Chargers
for the consumer electronics market in May. The new products are all fitted with
new, exclusively developed "Battery On Board" (BOB) technology, enabling the
consumer to apply "charging" to his/her electronic device 24 hours per day, all
year round. The entire range of products is designed to operate both in
sunlight, and indoors.

The new range of PV Solar Charger products are manufactured by more than 7
separate factories in China and Hong Kong, and are finally assembled in a
blister display packaging for easy distribution to international retailers.

                                       12
<PAGE>

In addition, all our Solar Charger products will be available for online
purchase on our new Website. We anticipate the website to be fully functional in
May 2005. Solar Style's PV Solar Chargers are patented in the U.S., Canada and
in select countries around the world.

RESULTS OF OPERATIONS

Restatement of the three months and six months ended March 31, 2004:

As reported in our filing for the period ended March 31, 2004, we included
certain amounts of revenue and cost of sales that were receipts and
disbursements for third parties. In our annual audit at our fiscal year end
September 30, 2004, we were advised that these amounts should not have been
included in our sales and cost of sales figures, and accordingly were excluded
in our year end reports. The following table represents the differences in our
reported amounts of sales and costs of sales for the three and six month period
ended March 31, 2004:
<TABLE>
<CAPTION>
                                             AS REPORTED                                  RESTATED
                                  ---------------------------------           ---------------------------------
                                  Three Months          Six Months            Three Months          Six Months
                                  ------------          -----------           ------------          -----------
<S>                               <C>                   <C>                   <C>                   <C>
Revenue and other income          $   718,506           $   895,782           $    52,051           $   229,327
Cost of goods sold                   (478,599)             (493,171)               (7,598)              (22,170)
                                  -----------           -----------           -----------           -----------
Gross profit                          239,907               402,611                44,453               207,157

Operating (loss)                     (645,288)           (1,319,673)             (810,742)           (1,485,127)

Net loss                          $  (680,394)          $(1,394,642)          $  (995,151)          $(1,709,399)
                                  ===========           ===========           ===========           ===========
</TABLE>

Results Of Operations, For The Three Months and Six Months Ended March 31, 2005
Compared to the Three Months and Six Months Ended March 31, 2004.

Revenues and cost of sales for the three months and six months ended March 31,
2005 and March 31, 2004 increased $297,575 and $621,816 respectively. Total
revenues for the three month period ending March 31, 2005 were $349,626 and for
the six month period ending March 31, 2005, were $851,143.

Cost of sales totaled $459,555 for the three months ending March 31, 2005 and
$792,467 for the six months ending March 31, 2005.

         Operating expenses for the three months and six months ended March 31,
2005 amounted to $895,814 and $1,893,714, respectively, compared to $855,195 and
$1,692,284 for the three months and six months ended March 31, 2004. For both
periods, these expenses were primarily sales and marketing costs, consultants
and professional fees.

         Interest expense decreased $14,227 from $190,212 for the three months
ended March 31, 2004, to $175,985 for the three months ended March 31, 2005. For
the six months ended March 31, 2005 and 2004, interest expense increased $28,636
from $230,075 to $258,711, respectively. The decrease resulted from the
conversion by the bondholders of a portion of their debt to common stock during
the period and the increase resulted from a settlement on past due interest
penalties with one of the bond holders.

         Net losses for the three months ended March 31, 2005 were $(1,172,458),
as compared with $(995,151) for the three months ended March 31, 2004. Net
losses for the six months ended March 31, 2005 were $(2,081,561), as compared
with $(1,709,399) for the six months ended March 31, 2004. The increases in net
losses are primarily attributable to increased marketing and consulting
activities with respect to the air water product lines.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         On March 31, 2005, our cash position was $270,604 compared to $73,748
as of September 30, 2004. Cash used in operating activities for the six month
periods ending March 31, 2005, compared to the six months ending March 31, 2004
were $(1,655,385) and $(906,879) respectively. The primary use of these funds
resulted from operating losses and increase in inventories. Cash provided by
financing activities for the six month periods ending March 31, 2005 and 2004
were $1,386,573 and $835,945 respectively. For the period ending in 2005 this
amount was derived from the sale of common and preferred stock.

         While sales are being developed, current operating cash is being
provided by loans and the sale of stock. The company has had a working capital
deficit for an extensive period of time. If management is unable to continue
raising funds through common stock sales and loans, we may not be able to
continue as a viable concern. Other than the small line of credit held by
Millenium, we do not have a bank line of credit and there can be no assurance
that any required or desired financing will be available through bank
borrowings, debt, or equity offerings, or otherwise, on acceptable terms, if at
all. If future financing requirements are satisfied through the issuance of
equity securities, investors may experience significant dilution in the net book
value per share of common stock.

We do not have any off-balance sheet arrangements.

ITEM 3.   EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our Chief Executive Officer,
Mr. Michael J. Zwebner and Chief Financial Officer, Mr. Curtis Orgill, we
carried out an evaluation of the effectiveness of our disclosure controls and
procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as of December 31, 2004 (the "Evaluation
Date"). Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that as of the Evaluation Date, our disclosure
controls and procedures were effective to provide reasonable assurance that the
information required to be disclosed in our reports filed or furnished under the
Exchange Act are recorded, processed, summarized and reported, within the
periods specified in the SEC's rules and forms. We believe that a controls
system, no matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.

There have not been any changes in our internal control over financial reporting
during the fiscal quarter ended December 31, 2004 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.

                                       14
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On August 26, 1999, we filed suit against Credit Bancorp, in U.S.
District Court in San Francisco, regarding improprieties on the part of Credit
Bancorp relating to a loan. The case was settled on October 11, 1999. As part of
the settlement agreement, Credit Bancorp agreed to convert the original loans
granted to us to a convertible debenture in the amount of $740,000. On October
11, 1999, we issued a convertible unsecured debenture for $740,000 to Credit
Bancorp in settlement of this obligation. The terms of this convertible
unsecured debenture are 7% interest per annum payable, semiannually on the last
day of February and September, with the principal due September 30, 2002. All
amounts of unpaid principal and accrued interest of this debenture are
convertible at any time at the conversion price of $1,600 per share of
unregistered, restricted shares of our common stock. Credit Bancorp had agreed
to convert principal and accrued interest owing on the debenture into 463 shares
of our common stock.

In November 1999, the SEC filed suit against Credit Bancorp alleging violations
of various securities laws in connection with its actions in relation to us and
others, and seeking various forms of relief including disgorgement of its
illegal gains. A receiver has been appointed to administer the affairs of Credit
Bancorp. We have been informed that the appointed receiver denies that such a
conversion request was made and that the principal amount and accrued interest
of the debenture are due. We currently carry the 483 share obligation in our
equity under escrowed shares. No provision for the debenture and accrued
interest have been made in our financial statements, as we believe the
receiver's claim is unfounded and the company will prevail. During the current
reporting period, there have been several exchanges between us and the receiver,
and some limited discovery of relevant documents has occurred. The matter
remains unresolved at March 31, 2005.

On August 7, 2003, Electric Gas & Technology of Dallas, Texas ("ELGT"),
published a press announcement claiming that a complaint and $60 million lawsuit
had been filed in Federal court in Texas. Their press release stated that we had
infringed on their patents. We filed a counter claim in the United States
District Court, Southern District of Florida, case number 03-22196-Civ-Seitz,
disputing ELGT's claims of patent infringement and as a result of statements
published in their press releases, we included in our complaint $118 million in
damages.

On November 24, 2004, a settlement agreement was reached calling for:

         1) a stipulation for the entry of a "Consent Judgment" in favor of our
subsidiary, AirWater Corporation and UCSY, jointly, and against Atmospheric
Water Technology, Inc. ("AWT") in the amount of $5 million,
         2) the payment by ELGT of the amount of $25,000 in cash to us, and
         3) the issuance of 150,000 shares of ELGT's restricted common stock
("Shares").

These shares are restricted from transfer or sale for a one year
period. ELGT has a right to purchase those shares from us for a one year period
from the agreement date at a price of $0.50 per share. In the event ELGT does
not exercise its right of purchase, upon the expiration of the one year period
the shares will become free trading and unrestricted. The 150,000 shares of
ELGT's common stock represents 2.1 percent of ELGT's total outstanding common
stock.

It was further agreed, that after the stipulation for the entry of the "Consent
Judgment", ELGT was to assign to us all of ELGT's equity ownership interest
(i.e. shares of stock or otherwise) in AWT. This includes all ELGT and AWT's
rights, title and interest in U.S. Patent No. 4,255,937 and all title and
interest in U.S. Patent No. 5,553,459. This transfer to UCSY and AirWater is
equal to 92% of the outstanding stock (controlling interest) of AWT and includes
all patents held by AWT, as well as all the appertaining Patents, Trademarks and
Licenses.

In January 2005, we received the stock (92%) of AWT. we received AWT with no
assets or liabilities, other than the rights, title and interest in the patents
noted above.

                                       15
<PAGE>

In June 2004, we filed a lawsuit in Miami District Court against Lycos, Inc, and
its parent Terra Networks, Inc, and a business segment, Raging Bull, for $300
million. The lawsuit relates to charges for commercial fraud, Cyberstalking and
illegal use of the company's commercial name and logo. As of December 31, 2004,
the litigation continues in Miami Federal Court. The court has set a trial date
for October 2005.

In a related but separate action, We filed a civil "RICO" (Racketeering
Influenced Criminal Organization) lawsuit in the Circuit Court for the 11th
Judicial Circuit, Miami-Dade County, Florida against a number of related
defendants including RipOffReport.com, BadBusinessBureau.com et al., seeking
money damages for our losses as a victim of the defendants' "RICO" conduct and
for other improper activities. The lawsuit names a number of defendants who have
and are continuing to allegedly operate a Criminal Racketeering Enterprise
against our organization and our directors and staff, as well as unnamed John
Does 1-25.

Our lawsuit alleges that the defendants associated in a Racketeering Enterprise
and conducted or participated, directly or indirectly, in such enterprise
through a pattern of racketeering activity consisting of a scheme to defraud,
lure, obtain, extort monies by means of fraud, misrepresentation, pretenses, and
material omissions through false and misleading practices, and to defame and
violate our legal rights through a pattern of criminal activity or a pattern of
racketeering activity including the use of telecommunications, mail, wire
communications as prescribed by 18 U.S.C. Sec. 1341 and Sec. 1343, 18 U.S.C.
Sec. 1962, and F.S. Sec. mail fraud, wire fraud. At March 31, 2005, the
defendants are fighting jurisdiction, and the case is still pending in the
court.

On January 14, 2005 we filed a law suit in the U.S. District Court, Southern
District of Florida (Miami), (Docket #05-CV-20047), against Turner Broadcasting
System, Inc., Cable News Network, Inc. "CNN" and Wolf Blitzer for $100 million.
The law suit has been brought for defamation under Florida law. CNN attorneys
have contested this case, filed various motions, and the judge closed the case
in March 2005. We have however filed various appeals, and the case is still
pending decisions of the higher courts. Relating to this matter, we issued a
press release requesting any shareholder who had trading losses in our stock
during the period Novermber 1, 2001 through current, could join in our filing of
a class action request against Lycos, et al.

In January 2005, we received a termination notice from J.J. Reidy & Company, the
AirWater patent holders allegedly terminating the Global License Agreement that
was entered into in March 2003, alleging Breach of Contract. The company has
filed an action in the U.S. District Court for the Southern District of Florida
(case no. 05-20650-CIV-Jordan/Klein), seeking Declamatory relief from the court,
determining its rights, status and legal relations as well as Money Judgment
against J.J. Reidy & Company. Meanwhile, J.J. Reidy & Company had already made a
court filing in Boston Massachussetts, in December 2004, (even prior to issuing
the notice of termination) in an effort to claim jurisdiction. We have filed
several motions with the Boston court contesting jurisdiction, and the matter is
now currently in review by the courts. No provision has been made in our
financial statements, as we believe the claim is unfounded and the company will
prevail. Pending resolution of the court proceedings, we have discontinued
royalty or any other payments to JJ Reidy.

On January 21, 2005, we filed a lawsuit against James Coughlin, internet alias
"IrishJim44," for claims totaling $18 million. The lawsuit has been filed in
Federal Court in the Southern District of Florida. The claims are for defamation
against the company and the chairman Michael Zwebner, as posted on the internet.
The defendant filed a Motion to dismiss citing lack of jurisdiction in Florida.
In April 2005, the court dismissed the case citing the reason of lack of
personal jurisdiction over the defendant. The company is appealing the decision,
based on new evidence (affidavit of third party) showing the defendant was
employed in Florida and therefore the court should reverse its decision. The
matter is currently awaiting the courts further consideration.

The company had earlier filed a law suit against 2 Internet posters in state
court in Miami Florida claiming the defendants use of tortuous speech to
interfere with the business interests and its business affairs. As a result of
the action, and the failure of either of the 2 defendants to appear in court,
the company obtained a default order and subsequently a default judgment.

                                       16
<PAGE>

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

Sales of Unregistered Securities
--------------------------------

We have issued and sold unregistered securities that have not previously been
reported as set forth below. An underwriter was not utilized in any of these
transactions. The recipients of securities in each transaction represented their
intention to acquire the securities without a view to distribution. All the
issued securities were restricted securities under Rule 144, Reg. D or Reg. S
regulations, and appropriate restrictive legends were affixed to the securities
in each transaction. All sales of securities were to accredited investors in
private placements, and accordingly all of the sales complied with Section 4(2)
as well as 4(6) of the Securities Act of 1933.

On January 5, 2005, we issued 1,000,000 shares of common stock under private
placement subscriptions at $0.025 per share. These securities were issued in a
transaction exempt from registration under the Securities Act of 1933 in
reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

On February 9, 2005, we issued 800,000 shares of common stock under private
placement subscriptions at $0.025 per share. These securities were issued in a
transaction exempt from registration under the Securities Act of 1933 in
reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

In connection with the October 19, 2004 issuance previously reported, we issued
900,000 additional shares of common stock for the balance due under a private
placement subscriptions at $0.03 per share. These securities were issued in a
transaction exempt from registration under the Securities Act of 1933 in
reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

Other Securities Transactions
-----------------------------

Pursuant to the April 14, 2000 Securities Purchase Agreement (the 4% convertible
debentures) and the March 29, 2001 Securities Purchase Agreement (the 8% Senior
Secured Convertible Debentures), the investors converted $600,000 of debentures
into 9,722,727 of the Company's common stock on various dates between January 3
and January 21, 2005, at various prices ranging from $0.035 per common share to
$0.05 per common share.

                                       17
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a) The following exhibits are included herewith:

Exhibit 31.1 - Certification of Chief Executive Officer of Universal
Communication Systems, Inc. required by Rule 13a-14(1) or Rule 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Exhibit 31.2 - Certification of Chief Financial Officer of Universal
Communication Systems, Inc. required by Rule 13a-14(1) or Rule 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Exhibit 32.1 - Certification of Chief Executive Officer of Universal
Communication Systems, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 and Section 1350 of 18 U.S.C. 63.

Exhibit 32.2 - Certification of Chief Financial Officer of Universal
Communication Systems, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 and Section 1350 of 18 U.S.C. 63.

(b) The Company filed the following reports on Form 8-K during the quarter for
which this form is filed:

         None

                                       18
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  May 20, 2005        UNIVERSAL COMMUNICATION SYSTEMS, INC.


                           /s/ MICHAEL J. ZWEBNER
                           ----------------------------------------------
                           Michael J. Zwebner
                           Chief Executive Officer, Chairman of the Board

                                       19