UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C.





FORM
      10-QSB


(Mark
      One)





X
            Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934


For
      the quarter ended September 30,
      2006; or





___
            Transition
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934





Commission
      file number  0-21555





AMASYS
      CORPORATION


(Exact
      Name of Registrant as Specified
      in Its Charter)





Delaware
            
            54-1812385(State
                or other jurisdiction
            
            (I.R.S.
                Employerof
                incorporation or
                organization)
            
            Identification
                No.)




625
      N. Washington Street,
      Suite 301, Alexandria, Virginia 22314


(Address
      of principal executive office)








Check
      whether the Registrant (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  _____





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





The
      Company knows of no trading in its Common Stock since its
      inception.  As of September 30, 2006, there were 1,775,880 shares of
      stock held by non-affiliates.





As
      of
      September 30, 2006, 4,319,210 shares of the Common Stock of the Registrant
      were
      outstanding.





Transitional
      Small Business Disclosure Format (check one):


Yes      No X








AMASYS
      CORPORATION.


TABLE
      OF
      CONTENTS






Page
                  No.Part
                  I
              Financial
                  Information:Item
                  1.
              Financial
                  Statements
              
              1Balance
                  Sheet
              
              1as
                  of September 30, 2006 (unaudited)Statements
                  of Operations
              
              2for
                  the Three Months EndedSeptember
                  30, 2006 and 2005 (unaudited)Statements
                  of Cash Flows
              
              3for
                  the Three Months EndedSeptember
                  30, 2006 and 2005 (unaudited)Notes
                  to Financial Statements
              
              4Item
                  2.
              Management’s
                  Discussion and Analysis
              
              7or
                  Plan of OperationsItem
                  3.
              Controls
                  and Procedures
              
              14Part
                  II
              Other
                  Information:Item
                  1.
              Legal
                  Proceedings
              
              14Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              14Item
                  3.
              Defaults
                  Upon Senior Securities
              
              15Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              
              15Item
                  5.
              Other
                  Information
              
              15Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              
              15SIGNATURES
              
              16Certifications
                  of Chief Executive Officer and Chief Financial Officer
              
              17





PART
      I





Item
      1.                                
Financial Statements





AMASYS
      Corporation


Balance
      Sheet


(Unaudited)








September
                30, 2006AssetsCurrent
                assets:Cash
                and cash equivalents
            
            $
            3,249Short-term
                investment
            
            
            44,100Total
                current assets
            
            
            47,349Total
                assets
            
            $
            47,349Liabilities
                and stockholders’ equityCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            
            34,610Total
                current liabilities
            
            
            34,610Stockholders’
                equity:Common
                stock, $0.01 par value; 20,000,000 shares authorized; 4,319,210 shares
                issued and outstanding
            
            
            43,192Additional
                paid-in capital
            
            
            359,893Accumulated
                other comprehensive income
            
            
            16,265Retained
                deficit
            
            
            (406,611
            )Total
                stockholders’ equity
            
            
            12,739Total
                liabilities and stockholders’ equity
            
            $
            47,349








See
      accompanying notes.





1





AMASYS
      Corporation


Statements
      of Operations


(Unaudited)








Three
                Months Ended
              September
                30,2006
            
            
            2005Operating
                costs and expenses:Professional
                services
            
            $
            50,136
            
            
            $
            66,332General
                and administrative
            
            
            3,275
            
            
            
            4,284Total
                operating costs and expenses
            
            
            53,411
            
            
            
            70,616Other
                income (expense):Gain
                on sale of short-term investment
            
            
            14,172
            
            
            
            13,965Interest
                income
            
            
            43,408
            
            
            
            44,489Equity
                in earnings of Comtex
            
            
            9,127
            
            
            
            9,957(Loss)
                gain on derivative asset
            
            
            (419,907
            )
            
            
            238,043Total
                other (expense) income
            
            
            (353,200
            )
            
            
            306,454(Loss)
                income before income taxes
            
            
            (406,611
            )
            
            
            235,838Provision
                for income taxes
            
            
            —
            
            
            
            —Net
                (loss) income
            
            $
            (406,611
            )
            
            $
            235,838(Loss)
                earnings per share:Basic
            
            $
            (0.09
            )
            
            $
            0.10Diluted
            
            $
            (0.09
            )
            
            $
            0.06Weighted
                average number of shares:Basic
            
            
            4,319,210
            
            
            
            2,207,350Diluted
            
            
            4,319,210
            
            
            
            4,167,350








See
      accompanying notes.




2





AMASYS
      Corporation


Statements
      of Cash Flows


(Unaudited)








Three
                Months Ended September 30,2006
            
            
            2005Operating
                activities:Net
                (loss) income
            
            $
            (406,611
            )
            
            $
            235,838Adjustments
                to reconcile net (loss) income to net cash used in operating
                activities:Amortization
                on note receivable discount
            
            
            (21,949
            )
            
            
            (23,065
            )Loss
                (gain) on derivative asset
            
            
            419,907
            
            
            
            (238,043
            )(Gain)
                on sale of short-term investment
            
            
            (14,172
            )
            
            
            (13,965
            )Equity
                in (earnings)
            
            
            (9,127
            )
            
            
            (9,957
            )Changes
                in operating assets and liabilitiesAccounts
                payable and accrued expenses
            
            
            617
            
            
            
            30,859Net
                cash used in operating activities
            
            
            (31,335
            )
            
            
            (18,333
            )Investing
                activities:Proceeds
                from sale of short-term investment
            
            
            22,964
            
            
            
            20,069Net
                cash provided by investing activities
            
            
            22,964
            
            
            
            20,069Net
                (decrease) increase in cash
            
            
            (8,371
            )
            
            
            1,736Cash
                at beginning of period
            
            
            11,620
            
            
            
            1,024Cash
                at end of period
            
            $
            3,249
            
            
            $
            2,760








See
      accompanying notes.




3





1.           
      Basis of Presentation





The
      accompanying interim financial statements of AMASYS Corporation (the “Company”
or “AMASYS”) are unaudited, but in the opinion of management reflect all
      adjustments necessary for a fair presentation of the results for such
      periods.  The results of operations for any interim period are not
      necessarily indicative of results for the full year.  These financial
      statements should be read in conjunction with the audited financial statements
      and notes thereto included in the Company’s Annual Report on Form 10-KSB for the
      fiscal year ended June 30, 2006 filed with the Securities and Exchange
      Commission on October 9, 2007.





2.
                  Stock Based
      Compensation





The
      Company has a stock-based compensation plan.  Currently, the Company
      accounts for this plan under the recognition and measurement principles of
      Accounting Principles Board Opinion No. 25 (“APB 25”), Accounting for Stock Issued
      to
      Employees, and related interpretations.





SFAS
      No.
      123 (“SFAS 123”), Accounting
      for Stock-Based Compensation, requires that companies either recognize
      compensation expense for grants of stock options and other equity instruments
      based on fair value, or provide pro forma disclosure of net income (loss) and
      net income (loss) per share in the notes to the financial
      statements.  SFAS No. 148 (“SFAS 148”), Accounting for Stock-Based
      Compensation-Transition and Disclosure, amends SFAS 123.  SFAS
      148 provides alternative methods of transition for a voluntary change to the
      fair value-based method of accounting for stock-based employee compensation
      and
      amends the disclosure requirements of SFAS 123 to require disclosures in both
      the annual and interim financial statements about the method of accounting
      for
      stock-based employee compensation and the effect of the method used on reported
      results.





No
      compensation cost has been recognized under SFAS 123 for the Company’s employee
      stock option plan.  Due to the fact that options granted in 1996 were
      immediately exercisable, net income (loss) is the same under SFAS 123 and APB
      25
      for the three months ended September 30, 2006 and 2005.





In
      December 2004, the FASB issued SFAS No. 123R, (SFAS 123R), Share-Based Payment, amending
      SFAS 123 to require companies to record as expense the fair value of
      equity-based compensation, including stock options, over the applicable vesting
      period.  SFAS 123R also requires more extensive disclosures concerning
      stock options than required under current standards.  The new rule
      applies to option grants made after adoption as well as options that have not
      vested at the date of adoption.  SFAS 123R became effective no later
      than interim and annual periods beginning after December 15, 2005 for small
      business issuers.  The adoption of SFAS 123R did not have a
      significant effect on the Company’s financial statements as its stock options
      are fully vested.




4




3.           
      Earnings (Loss) Per Share





The
      following table sets forth the computation of basic and diluted earnings (loss)
      per share:





Three
                Months Ended
              September
                30,2006
            
            
            2005Numerator:Net  (loss)
                income
            
            $
            (406,611
            )
            
            $
            235,838Preferred
                stock dividends
            
            
            
            
            
            
            (24,500
            )Numerator
                for basic earnings per share
            
            
            (406,611
            )
            
            
            211,338Effect
                of dilutive securities
            
            
            —
            
            
            
            24,500Numerator
                for dilutive earnings per share
            
            $
            (406,611
            )
            
            $
            235,838Denominator:Denominator
                for basic earnings per share-weighted average shares
            
            
            4,319,210
            
            
            
            2,207,350Effect
                of dilutive securities:Convertible
                preferred stock
            
            
            —
            
            
            
            1,960,000Denominator
                for diluted earnings per share
            
            
            4,319,210
            
            
            
            4,167,350Basic  (loss)
                earnings per share
            
            $
            (0.09
            )
            
            $
            0.10Diluted
                (loss) earnings per share
            
            $
            (0.09
            )
            
            $
            0.06





For
      all
      periods presented, the 900,000 shares issuable upon the exercise of stock
      options have been excluded from the computation since their effect was not
      dilutive.








4. Investment
        in Common Stock – Related Party





On
      September 25, 2006, AMASYS executed agreements to redeem from the holders of
      its
      Preferred Stock, pro rata to their respective ownership interests, 55,209 shares
      of AMASYS Series A Preferred Stock (the “Series A”) in consideration for: (a)
      AMASYS’ entire interest in the outstanding promissory note in favor of AMASYS
      made by Comtex News Network, Inc. (“Comtex”) in the principal amount of
      $857,000; and (b) 2,153,437 shares of Comtex common stock.  Pursuant
      to the agreement, the holders of the Series A converted the balance of the
      Series A shares, together with any and all rights to accrued but unpaid
      dividends thereon, into 2,111,860 shares of AMASYS Common
      Stock.  Therefore, effective September 25, 2006, AMASYS no longer
      owned the promissory note made by Comtex and AMASYS no longer held any shares
      of
      Comtex common stock and therefore no longer had any ownership interest in
      Comtex.




5





5.           
      Comprehensive Income (Loss)





Comprehensive
      income (loss) is defined as the change in equity of a business enterprise during
      a period from non-owner sources.  The Company’s comprehensive income
      (loss) includes unrealized gains (losses) on its short-term investment, as
      well
      as reclassification adjustments resulting from gains on sales of short-term
      investments that were realized and included in net income in the current
      period.  In accordance with paragraphs 18 through 20 of SFAS 130,
      these gains had also been included in Other Comprehensive Income as unrealized
      holding gains in the period in which they arose.  These gains are,
      therefore, deducted from Other Comprehensive Income to avoid including them
      twice.  During the three months ended September 30, 2006 and 2005, the
      Company reclassified realized gains and recognized net unrealized (losses)
      gains
      on its short-term investments as follows:





Three
                Months
                Ended
              September
                30,2006
            
            
            2005Net
                (loss)
                income
            
            $
            (406,611
            )
            
            $
            235,838Other
                comprehensive
                income:Unrealized
                loss on short-term
                investment
            
            
            (7,335
            )
            
            
            (37,665
            )Less:  reclassification
                adjustment for gains included in net (loss) income
            
            
            (14,172
            )
            
            
            (13,965
            )Net
                unrealized (loss) gain on
                short-term investment
            
            
            (21,507
            )
            
            
            (51,630
            )Other
                comprehensive
                income
            
            
            (21,507
            )
            
            
            (51,630
            )Comprehensive
                (loss)
                income
            
            $
            (428,118
            )
            
            $
            184,208





6. Non-cash
        Investing and Financing
        Transactions:





The
      following tables summarize the non-cash investing and financing transactions
      that occurred during the three months ended September 30, 2006:





Non-cash
                investing transactions:Preferred
                shares redeemed in exchange for Note Receivable – Related Party and
                Investment in Common Stock – Related Party
            552Note
                Receivable – Related Party exchanged for preferred shares (net of discount
                of $148,478)
            (703,412)Retained
                earnings
            282,979Additional
                Paid-in Capital
            419,881





Non-cash
                financing transactions:Preferred
                shares converted into common shares
            1,408Common
                shares issued for preferred shares converted
            (21,119)Related
                additional paid-in capital for common shares
            19,711Net
                effect of non-cash investing and financing transactions
            -0-




6




7.           
      Income Taxes





The
      Company has incurred sufficient net
      operating loss carry forwards and the Company will not incur any income tax
      expense for the three months ended September 30, 2006.





8.           
      Subsequent Events





On
      November 15, 2006, C.W. Gilluly, the president of the Company, exercised his
      options to purchase 350,000 restricted shares (out of a total of 900,000 options
      outstanding) and the Company issued 350,000 restricted shares to him. The
      remaining 550,000 options expired on November 16, 2006.





On
      May
      24, 2007, the Company borrowed $10,000 from each of Private Capital Group,
      LLC
      and C.W. Gilluly (collectively the “Lenders”) at the WSJ Prime rate plus 1.75%
      maturing on or before December 31, 2007.  In accordance with the loan
      conditions, the Company also   granted 1,000,000 shares of
      restricted common stock to each of the Lenders and issued warrants to each
      of
      the Lenders for an additional 1,000,000 shares of restricted common stock at
      an
      exercise price of $0.01 per share as inducement to Lenders to make the
      loan.  Private Capital Group, LLC is affiliated with World Mineral
      Corporation, which signed the Agreement and Plan of Share Exchange by and among
      AMASYS Corporation, World Mineral Corporation and the shareholders of World
      Mineral Corporation, dated September 26, 2006.





On
      November 15, 2007, the Company executed a $15,000 note with C.W. Gilluly, its
      president, pursuant to which C.W. Gilluly advanced the Company $15,000 at a
      rate
      of 12% per annum.





There
      are
      6,669,210 shares of common stock outstanding at June 30, 2007.





Item
        2. Management’s
        Discussion and Analysis or Plan of Operations





Company
      History





AMASYS
      Corporation (“AMASYS” or the “Company”) was incorporated in Delaware in 1992,
      and in 1996 received all remaining assets of Infotechnology, Inc. (“Infotech”),
      a Delaware company, following the completion of Infotech’s Chapter 11 Bankruptcy
      reorganization, in accordance with an Assignment and Assumption Agreement,
      dated
      October 11, 1996, and effective as of June 21, 1996.  As a result of a
      series of transactions during the 1980’s, Infotech, then principally engaged in
      the information and communications business, acquired equity interests in Comtex
      News Network, Inc. (“Comtex”) and Analex Corporation (“Analex”), formerly
      known as Hadron, Inc.  As of September 30, 2006 AMASYS no longer had
      an equity interest in Comtex, and had less than a 1% equity interest in
      Analex.




7


On
      July
      2, 2001, the Company filed the following reports with the Securities and
      Exchange Commission (the “SEC”):  Annual Report on Form 10-K for the
      year ended June 30, 2000; the Quarterly Report on Form 10-Q for the quarter
      ended September 30, 2000; the Quarterly Report on Form 10-Q for the quarter
      ended December 31, 2000; and the Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2001.  Prior to these filings, the Company had not
      filed reports with the SEC except for a Form 8-A, filed in October 1996, for
      registration of its common and preferred shares of stock, and a Form 12B-25,
      filed in December 1996, in which it disclosed that it was unable to file its
      Form 10-Q for the quarter ended December 31, 1996 because of the difficulty
      associated with the preparation of the Company’s initial financial statements as
      successor to Infotech.  The Annual Report on Form 10-K for the year
      ended June 30, 2002 was timely filed.  The Annual Report on Form 10-K
      for the year ended June 30, 2003 was filed on November 7, 2003.  The
      Quarterly Report on Form 10-QSB for the quarter ended December 31, 2003 was
      filed on February 20, 2004 pursuant to a Form 12b-25 filed on February 17,
      2004.  Subsequent Form 10-QSBs were timely filed.  The
      Annual Report on Form 10-KSB for the year ended June 30, 2004 was filed on
      October 7, 2004 pursuant to a Form 12b-25 filed on September 27,
      2004.  The Annual Report on Form 10-KSB for the year ended June 30,
      2005 was filed on September 28, 2005 and was amended on January 19,
      2007.  All subsequent quarterly reports of the Company through the
      June 30, 2006 reporting period have been filed with the SEC, and the Company
      intends to file all subsequent quarterly reports with the SEC as soon as
      possible.





Overview





AMASYS
      is
      the successor to Infotech, pursuant to Infotech’s bankruptcy
      proceeding.  Until September 25, 2006, AMASYS’ primary assets were its
      equity interest in and note receivable (the “Note”) from Comtex and equity
      interest in Analex.  AMASYS owned 16% of the outstanding equity of
      Comtex, while the remainder is publicly owned.





On
      September 25, 2006, the Company exchanged the equity investment in Comtex common
      stock and the Note Receivable from Comtex of $856,954, for 55,209 shares of
      the
      AMASYS Series A Preferred stock.  Therefore, at September 30, 2006,
      the Company no longer had an equity interest in either the common stock of
      Comtex or the Note from Comtex.





The
      Note
      was convertible as follows:





For
                the Quarter Ended September 30,2006
            
            
            2005Face
                value of Note
            
            $
            -0-
            
            
            $
            856,954Conversion
                price per share
            
            $
            -0-
            
            
            $
            0.90Number
                of shares into which the Note is convertible
            
            
            -0-
            
            
            
            952,171Comtex
                share price
            
            $
            0.21
            
            
            $
            0.63




8





The
      Company also owned 21,000 shares of common stock of publicly-held Analex, a
      defense contractorspecializing in
      systems engineering and developing innovativetechnical
      intelligence solutions in
      support ofU.S.national security.  As of
      September 30, 2006, Analex had 16,767,964 shares of common stock
      outstanding.





TheCompany believes that, by virtue of an
      exemption to the Investment Company Act of 1940 (“1940 Act”), the Company should
      not be deemed to be an “investment company” and, accordingly, should not be
      required to register as such.  The rules and interpretations of the
      SEC and the courts relating to the 1940 Act and to its exemptions are highly
      complex and uncertain in numerous aspects.  As a result, no assurance
      can be given that the Company will not be deemed an “investment company” for
      purposes of the 1940 Act and be required to register as an investment company,
      in which case the Company could be subject to legal actions by regulatory
      authorities and others and could be forced to suspend or terminate
      operations.  The costs of defending any such action could constitute a
      material part of the Company’s assets.





Comtex
      News Network,
      Inc.





As
      of
      September 30, 2006, the Company owned no shares of common stock of Comtex (SEC
      File No. 0-10541).  Comtex trades on the OTC Electronic Bulletin Board
      under the symbol CMTX. Comtex is a leading wholesaler of electronic real-time
      news and content to major financial and business information distributors.
      Comtex enhances and standardizes news and other content received from more
      than
      65 newswire services and publishers in order to provide editorially superior
      and
      technically uniform products to its customers.  Its customers then
      package, integrate and distribute Comtex products to their
      end-users.  Comtex processes more than 25,000 uniquereal-time news stories
      each day.  For each news story, processing includes, adding stock
      ticker symbols, indexing by keyword and category, and converting the diverse
      publisher materials and formats received into XML, the industry standard
      delivery format.




Comtex is a publicly-traded company and more information concerning the
      operations of Comtex can be found in its own filings with the SEC.





Analex
      Corporation





As
      of September 30, 2006, the Company
      owned 21,000 shares of the common stock of Analex (SEC File No. 0-5404), which
      traded on the American Stock Exchange under the symbol NLX.  Analex specializes in systems
      engineering and developing intelligence solutions in support of national
      security.  Analex focuses on designing, developing and testing
      aerospace products and systems; developing innovative technical solutions for
      the intelligence community; and analyzing and supporting defense
      systems.





The
      following discussion and analysis
      of our financial condition and results of operations should be read in
      conjunction with our financial statements and related notes appearing elsewhere
      in this report.  This discussion and analysis contains forward-looking
      statements that involve risks, uncertainties and assumptions.  Actual
      results may differ materially from those anticipated
      in these forward-looking statements as a result of certain factors, including
      but not limited to the risks discussed in this report.





9


Subsequent
      Events





On
      November 15, 2006, C.W. Gilluly, the president of the Company, exercised his
      options to purchase 350,000 restricted shares (out of a total of 900,000 options
      outstanding) and the Company issued 350,000 restricted shares to him. The
      remaining 550,000 options expired on November 16, 2006.





On
      May
      24, 2007, the Company borrowed $10,000 from each of Private Capital Group,
      LLC
      and C.W. Gilluly (collectively the “Lenders”) at the WSJ Prime rate plus 1.75%
      maturing on or before December 31, 2007.  In accordance with the loan
      conditions, the Company also   granted 1,000,000 shares of
      restricted common stock to each of the Lenders and issued warrants to each
      of
      the Lenders for an additional 1,000,000 shares of restricted common stock at
      an
      exercise price of $0.01 per share as inducement to Lenders to make the
      loan.  Private Capital Group, LLC is affiliated with World Mineral
      Corporation, which signed the Agreement and Plan of Share Exchange by and among
      AMASYS Corporation, World Mineral Corporation and the shareholders of World
      Mineral Corporation, dated September 26, 2006.





On
      November 15, 2007, the Company executed a $15,000 note with C.W. Gilluly, its
      president, pursuant to which C.W. Gilluly advanced the Company $15,000 at a
      rate
      of 12% per annum.





There
      are 6,669,210 shares of common
      stock outstanding at June 30, 2007.








Critical
      Accounting Policies





Our
      interim financial statements were
      prepared in conformity with accounting principles generally accepted in the
      United States.  As such, management is required to make certain
      estimates, judgments and assumptions that they believe are reasonable based
      upon
      the information available.  These estimates and assumptions affect the
      reported amounts of assets and liabilities at the date of the financial
      statements and the reported amounts of income and expense during the periods
      presented.  The significant accounting policies which management
      believes are the most critical to aid in fully understanding and evaluating
      our
      reported financial results include the following:





Derivatives





SFAS
      133 establishes accounting and
      reporting standards for derivative instruments and requires that all derivatives
      be recorded on the balance sheet at fair value.  Additionally, the
      accounting for changes in fair value depends on whether the derivative
      instrument is designated and qualifies as part of a hedging relationship and,
      if
      so, the nature of the hedging activity.




10





Changes
      in the fair value of derivatives that do not qualify for hedge treatment are
      recognized currently in earnings.





As
      discussed in Item 2 (Overview), the
      company held a note receivable-related party from Comtex.  In August
      2001, the Note was amended to include a provision that allows the Company to
      convert all or a portion of the outstanding principal amount, plus accrued
      interest, into common stock of Comtex.  In accordance with SFAS 133,
      the Company had accounted for this conversion option as an embedded
      derivative.  As a result, the conversion option was carried at fair
      value determined using a Black-Scholes model with changes in the fair value
      recognized currently in earnings.





For
      the
      past ten years, the Company has engaged the services of a CPA firm to prepare
      the derivative valuation.  The procedures utilized to compute the
      derivative asset evaluation using the Black-Scholes model were originally
      established by a major, international accounting firm.  These
      procedures have been consistently followed since inception.





The
      fair value of the derivative
      instrument was estimated at the end of the period, using the following
      assumptions:




For
                the Quarter
                Ended September 30,2006
            2005Risk-free
                rate of
                interest
            0%
            4%Expected
                dividend
                rate
            0%
            0%Expected
                life, in
                years
            0.00
            2.75Per
                share market
                price of Comtex stock
            $0.19
            $0.63Conversion
                factor
            $0.00
            $0.90Number
                of shares
                under option
            -0-
            952,171Black-Scholes
                option
                price per share
            $0.00
            $0.36Derivative
                asset
                value
            $0.00
            $342,782




As
      of September 30, 2006, the balance
      of the derivative asset was $-0-.  On September 25, 2006, the
      derivative asset was marked to fair value prior to being written off, as the
      result of the Company’s recapitalization plan, exchanging the Note for
      outstanding shares of Series A Preferred Stock.  For the quarters
      ended September 30, 2006 and 2005, we recognized (loss) gain on the derivative
      asset of $(419,907) and $238,043, respectively, for (losses) gains in the fair
      value of the conversion feature.





Short-Term
      Investment





Under
      Statement of Financial Accounting
      Standards No. 115, Accounting
      for Certain Investments in Debt and Equity Securities, the Company has
      classified its investment in Analex as an “available-for-sale”
security.  As a result, the investment is carried at fair value, with unrealized
      gains and losses, net of tax, reported as a separate component of stockholders’
equity.  Realized gains and losses on sales of securities are included
      in earnings using the specific identification method.




11




During
      the nine months ended September
      30, 2006 and 2005, the Company reclassified unrealized gains of $14,172 and
      $13,965 on the available-for-sale security included as a separate component
      of
      stockholders’ equity to realized gains due to the sale of
      securities.





Investment
      in Common
      Stock-Related Party





At
      September 30, 2006 and 2005, we had
      a 0% and 16% ownership interest in Comtex respectively.  The Company
      evaluated the applicability of the provisions of FASB Interpretation No. 46, Consolidation of Variable
      Interest
      Entities, (“FIN 46”), to its equity investment in
      Comtex.  Specifically, the Company has determined that Comtex is not a
      variable interest entity because the requirements of paragraphs 4(h) and 5
      are
      not met:





(1)
            AMASYS
                did not participate in the design or redesign of Comtex;


(2)
            Comtex’s
                activities neither involve nor are conducted on behalf of AMASYS;


(3)
            AMASYS’s
                equity and subordinated debt are less than half of the total of Comtex’s
                equity, subordinated debt and other subordinated financial support,
                based
                on the fair values of the interest in Comtex;


(4)
            backed
                financing or single-lessee leasing arrangements.





Since
      we had the ability to
      significantly influence the operations of Comtex, we accounted for our
      investment in Comtex under the equity method of accounting.  We could
      significantly influence the operations of Comtex since (i) if we converted
      our
      Note into shares of Comtex, we would have a 21% ownership interest in Comtex,
      (ii) the Company as well as our Chairman and CEO are Comtex’s largest individual
      shareholders, (iii) the Company and our Chairman and CEO have a combined
      ownership interest in Comtex of 37%, (iv) our Chairman is the Chairman and
      interim Chief Executive Officer of Comtex.





At
      June
      30, 2006, the Company’s equity share of Comtex losses had exceeded the Company’s
      basis in the investment in common stock – related party accounted for under
      equity method accounting.  Additional losses in excess of basis were
      accounted for as an adjustment to the basis of other investments in the investee
      (note receivable from Comtex) held by the Company in accordance with EITF 98-13
      “Accounting by an Equity Method Investor for Investee Losses When the Investor
      Has Loans to and Investments in Other Securities of the
      Investee.”  Subsequent investee income has been recorded as
      adjustments to the adjusted basis of the other investments in the reverse order
      of the application of the investor’s share of the investee’s
      losses.





As
      of
      June 30, 2006, equity in Comtex losses has caused a reduction in the basis
      of the investment in common stock – related party to $-0- and a reduction in the
      basis of the Note of $14,191 to $842,763.  The Company’s share of
      earnings from Comtex for the quarter ended September 30, 2006 were applied
      to
      restore the basis of the Note first and were insufficient to restore
      any basis to the investment in common stock – related party.  During
      the quarter ended September 30, 2006 and 2005, we recognized income of $9,167
      and $9,957 for our share of Comtex earnings, respectively.





12





Valuation
      of Deferred Tax
      Assets





We
      recognize deferred tax assets and
      liabilities based on the difference between the financial statement and tax
      bases of assets and liabilities.  We regularly review our deferred tax
      assets for recoverability and establish a valuation allowance based on
      historical taxable income, projected future taxable income and the expected
      timing of the reversals of existing temporary differences.  Based upon
      the level of historical taxable income and projections for future taxable income
      over the periods in which the net operating loss carryforwards are available
      to
      reduce income taxes payable, we have established a full valuation allowance
      against the deferred tax assets.





Results
      of
      Operations





Comparison
      of the three
      months ended September 30, 2006 to the three months ended September 30,
      2005





The Company had a net loss of $(406,611) during the three months ended September
      30, 2006 compared to net income of $235,838 during the three months ended
      September 30, 2005. The decrease in the net income is explained
      below.





Operating costs and expenses.  Operating costs and expenses
      decreased $17,205 from $70,616 at September 30, 2005 to $53,411 at September
      30,
      2006.  During this period, legal expenses increased $11,518 for
      services rendered in connection with the on-going SEC review of previously
      filed
      reports, and administrative costs associated with exploring the potential
      acquisition of WMC and redemption of the Series A shareholders, while decreases
      in accounting ($8,379), auditing expenses ($19,335) and offices expenses
      ($1,228) more than offset the increase.





Other
      income
      (expense):  Other income decreased $(659,654) from other income
      of $306.454 during the three months ended September 30, 2005 to other expense
      of
      $(353,200) during the three months ended September 30, 2006.  The
      decrease in other income is comprised primarily of a $(657,950) difference
      in
      the gain (loss) in the fair value of the derivative asset at September 25,
      2006,
      when the derivative asset was marked to fair value before being written off
      as a
      result of the redemption of preferred stock in exchange for the Note and Comtex
      common stock, as compared to the gain (loss) in the fair value at September
      30,
      2005 of $342,782.  As was mentioned in Derivatives in Item
      2, Critical Accounting Policies, the fair value of the derivative asset is
      calculated using a Black-Scholes Option Pricing Model.  This model
      takes into account, among other elements, the current share price of the
      underlying (Comtex common stock).  During the quarter ended September
      30, 2006, the Comtex common stock share price decreased 75% from $0.85 per
      share
      at June 30, 2006 to $0.21 at September 30, 2006.  During the
      quarter ended September 30, 2005, the Comtex common stock share price increased
      350% from $0.14 to $0.63 per share.  The number of shares under
      option, also dropped approximately 100,000 shares from 952, 171 to
      856,954.




13




The
      Company had net working capital of
      $12,739 at September 30, 2006.  The Company has had minimal operating
      activity since commencing operations in 1996 and has not had any other uses
      of
      funds.  Accordingly, the Company has not required any funding
      sources.  As of September 30, 2006, the Company expected to meet its
      short-term obligations from the sale of equity interests in Analex.





Cautionary
      Statements
      Concerning Forward-Looking Statements





Except
      for the historical information
      contained herein, the matters discussed in this Form 10-QSB/A include
      forward-looking statements within the meaning of Section 21E of the Securities
      and Exchange Act of 1934.  These forward-looking statements may be
      identified by reference to a future period or by use of forward-looking
      terminology such as “anticipate”, “expect”, “could”, “may” or other words of a
      similar nature.  Forward-looking statements, which the Company
      believes to be reasonable and are made in good faith, are subject to certain
      risks and uncertainties that could cause actual results to differ materially
      from those expressed in any forward-looking statement made by, or on behalf
      of,
      the Company.





Item
      3.                                
Controls and Procedures





Under
      the supervision and with the
      participation of our Chief Executive Officer/Chief Financial Officer, we
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures (as defined in Rule 13a-15 (e) and 15d-15(e) under
      the
      Exchange Act) as of the end of the period covered by this
      report.  Based upon that evaluation, the Chief Executive Officer/Chief
      Financial Officer concluded that, our disclosure controls and procedures were
      effective to ensure that information required to be disclosed in the reports
      that the Company files or submits under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission’s rules and forms.





PART
      II


OTHER
      INFORMATION





Item
      1.                                
Legal Proceedings





AMASYS has no outstanding, material legal proceedings.





Item
      2.                                
Unregistered Sales of Equity Securities and Use of Proceeds





None.





14




Item
      3.                                
Defaults Upon Senior Securities





None.





Item
      4.                                
Submission of Matters to a Vote of Security Holders





None.





Item
      5.                                
Other Information





None.





Item
        6. Exhibits
        and Reports on Form 8-K





See
      below.





15





SIGNATURES








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





Date:  December
      18, 2007








AMASYS
      CORPORATION




By:
              /s/ C.
                W. Gilluly, Ed. D.C.
                W. Gilluly, Ed.D.President
                and Chief Executive Officer(Principal
                Executive Officer andPrincipal
                Financial and Accounting Officer)




16