SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB/A

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

                  For the quarterly period ended June 30, 1999

       [ ] Transition report under Section 13 or 15(d) of the Exchange Act

                         Commission file number 2-31876

                                   WORLDS INC.
        (Exact name of small business issuer as specified in its charter)

                                   New Jersey
                         (State or other jurisdiction of
                         incorporation or organization)

                                    22-184316
                        (IRS Employer Identification No.)

                   15 Union Wharf, Boston, Massachusetts 02109
               (Address of principal executive offices)(Zip Code)


                                 (617) 725-8900
                           (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, and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X]  No [  ]

The number of shares of Common Stock outstanding was 16,637,881 shares as of
August 13, 1999

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



<PAGE>

                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements.


                                   Worlds Inc.
                        (a development stage enterprise)


                                                              Contents


        Unaudited financial statements:
           Balance sheets                                     2
           Statements of operations                           3
           Statement of stockholders' equity (deficit)        4
           Statements of cash flows                           5
           Summary of accounting policies                     6
           Notes to financial statements                      11




                                       1

<PAGE>


                                   Worlds Inc.
                        (a development stage enterprise)

<TABLE>

                                 Balance Sheets

<CAPTION>

                                                                        December 31, 1998           June 30, 1999
 ------------------------------------------------------------------ --------------------------- ----------------------
<S>                                                                    <C>                        <C>

 Assets                                                                                              (unaudited)
 Current:
    Cash and cash equivalents                                                $ 1,581,764                $  2,537,617
    Accounts receivable                                                                -                      19,918
    Prepaid expenses and other current assets                                     53,486                      42,512
    Inventory                                                                     58,516                      87,052
 ------------------------------------------------------------------ --------------------------- ----------------------
         Total current assets                                                  1,693,766                   2,687,099
 Property, equipment and software development costs, net of
    accumulated depreciation and amortization                                    214,246                     562,132
 Other assets (Note 5)                                                                 -                     503,095
 ------------------------------------------------------------------ --------------------------- ----------------------
                                                                             $ 1,908,012               $   3,752,326
 ------------------------------------------------------------------ --------------------------- ----------------------
 Liabilities and Stockholders' Equity (Deficit)
 Current:
    Accounts payable                                                        $    319,906              $      468,488
    Accrued expenses                                                             446,333                     769,832
    Current maturities of notes payable                                          246,648                     269,148
 ------------------------------------------------------------------ --------------------------- ----------------------
         Total current liabilities                                             1,012,887                   1,507,468
 Long-term portion, notes payable                                              1,875,018                   1,852,518
 ------------------------------------------------------------------ --------------------------- ----------------------
         Total liabilities                                                     2,887,905                   3,359,986
 ------------------------------------------------------------------ --------------------------- ----------------------
 Contingencies (Note 4)
 Stockholders' equity (deficit) (Notes 2 and 3):
    Common stock, $.001 par value - shares authorized 30,000,000;
       outstanding 18,031,996 and 18,815,746                                      18,032                      18,816
    Additional paid-in capital                                                 8,401,970                  11,692,300
    Deficit accumulated during the development stage                          (9,335,152)                (11,254,033)
 ------------------------------------------------------------------ --------------------------- ----------------------
                                                                                (915,150)                    457,083
    Treasury stock, at cost, 113,465 and 1,613,465 shares                        (64,743)                    (64,743)
 ------------------------------------------------------------------ --------------------------- ----------------------
         Total stockholders' equity (deficit)                                   (979,893)                    392,340
 ------------------------------------------------------------------ --------------------------- ----------------------
                                                                             $ 1,908,012               $   3,752,326
 ------------------------------------------------------------------ --------------------------- ----------------------

</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.

                                       2
<PAGE>


                                   Worlds Inc.
                        (a development stage enterprise)

<TABLE>

                      Statements of Operations (Unaudited)
<CAPTION>

                                                                                                                       Cumulative,
                                                                                                                       period from
                                                                                                                      April 8, 1997
                                                    Three months ended June 30,          Six months ended June 30,    (inception) to
                                                  ----------------------------------  ------------------------------     June 30,
                                                       1998              1999             1998               1999        1999 (a)
 ------------------------------------------------ ---------------- -----------------  -------------   -------------- ---------------
<S>                                                <C>               <C>              <C>             <C>              <C>

Net revenues                                      $       12,130   $        57,748    $     16,132    $    92,925      $    123,455
 Costs and expenses:
    Cost of revenues                                     (22,500)          (48,891)        (25,101)       (70,355)          (99,634)
    Selling, general and administrative                 (759,185)       (1,274,680)     (1,307,525)    (1,890,495)       (5,216,228)
    Research and development                            (302,516)                -        (534,428)             -          (992,932)
    Acquired research and development                          -                 -               -              -        (6,135,538)
 ----------------------------------------------- ----------------- -----------------  -------------   ---------------  -------------
         Operating loss                               (1,072,071)       (1,265,823)     (1,850,922)     (1,867,925)     (12,320,877)
 Other income (expenses):
    Gain resulting from reversal of certain
       predecessor liabilities                                 -                 -               -                -         810,140
    Interest income                                       35,054             5,180          76,992           17,966         155,565
    Interest expense                                     (35,656)          (30,000)        (72,112)         (68,922)       (197,184)
 ----------------------------------------------- ----------------- -----------------  --------------   --------------  ------------
         Loss before extraordinary item               (1,072,673)       (1,290,643)     (1,846,042)      (1,918,881)    (11,552,356)
 Extraordinary item - gain on debt settlement                  -                 -         151,654                -         298,323
 ----------------------------------------------- ----------------- -----------------  --------------   -------------- --------------
 Net loss                                        $    (1,072,673)  $    (1,290,643)   $ (1,694,388)    $ (1,918,881)  $ (11,254,033)
 ----------------------------------------------- ----------------- -----------------  --------------   -------------- --------------
 Loss per share (basic and diluted):
    Loss before extraordinary item               $          (.06)  $          (.08)   $       (.11)     $      (.11)
    Extraordinary item                                         -                 -             .01                -
 ----------------------------------------------- ----------------- -----------------  --------------   --------------
         Net loss per share (basic and diluted)  $          (.06)  $          (.08)   $       (.10)     $      (.11)
 ----------------------------------------------- ----------------- -----------------  --------------   --------------
 Weighted average common shares outstanding:
    Basic and diluted                                 16,716,546        16,723,298      16,434,339       17,304,288
 ----------------------------------------------- ----------------- -----------------  --------------   --------------


 --------------
(a) Includes the results of Predecessor and Academic (from December 4, 1997) which were merged into the Company on December 3, 1997.
 -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.

                                       3
<PAGE>


                                   Worlds Inc.
                        (a development stage enterprise)


                  Statements of Stockholders' Equity (Deficit)

<TABLE>

 Period from April 8, 1997 (inception) to June 30, 1999
 -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                    Deficit
                                            Common stock                         accumulated                   Total
                                       -----------------------  Additional        during the                stockholders'
                                                                  paid-in        development    Treasury      equity
                                         Shares      Amount       capital          stage         stock      (deficit)
 ------------------------------------- ------------ ---------- -------------- ---------------- ---------- --------------
<S>                                     C>          <C>         <C>           <C>              <C>         <C>
 Balance, January 1, 1998              16,119,996    $16,120   $  6,661,582   $  (6,686,471)   $          $      (8,769)
 Sale of shares in private offering
    memorandum (January 1998)              30,000         30        26,470               -             -       26,500
 Sale of shares in public offering
    of common stock, net (June 1998)    1,832,000      1,832     1,713,968               -             -    1,715,800
 Conversion of 113,465 shares to
    certain stockholders (June 1998)            -          -             -               -       (64,743)     (64,743)
 Conversion of employee stock
    options into shares (October
    1998)                                  50,000         50           (50)              -             -            -
 Net loss for the year ended
    December 31, 1998                           -          -             -      (2,648,681)            -   (2,648,681)
 ------------------------------------- ------------ ---------- -------------- ---------------- ---------- --------------
 Balance, December 31, 1998            18,031,996     18,032     8,401,970      (9,335,152)      (64,743)    (979,893)
 Issuance of warrants for consulting
    services (April 1999)                       -          -       465,000               -             -      465,000
 Contribution of 1,500,000 shares by
    founders to treasury (April 1999)           -          -             -               -             -            -
 Exercise of stock options
    (April 1999)                           75,000         75        74,925               -             -       75,000
 Issuance of shares for content
    supply agreement (June 1999)           93,750         94       374,906               -             -      375,000
 Sale of shares in private offering
    memorandum (June 1999)                615,000        615     2,375,499               -             -    2,376,114
 Net loss for the six months ended
    June 30, 1999 (unaudited)                   -          -             -      (1,918,881)            -   (1,918,881)
 ------------------------------------- ------------ ---------- -------------- ---------------- ---------- --------------
 Balance, June 30, 1999 (unaudited)    18,815,746    $18,816   $11,692,300    $(11,254,033)     $(64,743) $     392,340
 ------------------------------------- ------------ ---------- -------------- ---------------- ---------- --------------
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.

                                       4
<PAGE>


                                   Worlds Inc.
                        (a development stage enterprise)

<TABLE>

                      Statements of Cash Flows (Unaudited)

<CAPTION>

                                                                                                       Cumulative
                                                                                                       period from
                                                                                                      April 8, 1997
                                                                   Six months ended June 30,          (inception) to
                                                             ------------------ -------------------
                                                                   1998                1999           June 30, 1999
 ----------------------------------------------------------- ------------------ ------------------- ------------------
<S>                                                           <C>                 <C>               <C>
Cash flows from operating activities:
    Net loss                                                   $  (1,694,388)       $(1,918,881)       $(11,254,033)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Loss on disposal of fixed assets                                  -                  -              54,041
         Depreciation and amortization                                93,583            105,114             251,189
         Gain resulting from reversal of certain
            predecessor liabilities                                        -                  -            (810,140)
         Gain on debt settlement                                    (151,654)                 -            (298,323)
         Acquired research and development                                 -                  -           6,135,538
         Issuance of warrants for consulting services                      -            465,000             465,000
         Changes in operating assets and liabilities, net
            of effects from merger with Predecessor and
            Academic:
               Trade receivable                                          538            (19,918)            (19,918)
               Inventory                                                   -            (28,536)            (87,052)
               Prepaid expenses and other assets                      39,888           (117,121)             (2,716)
               Accounts payable and accrued expenses                 (71,395)           472,081             838,271
 ----------------------------------------------------------- ------------------ ------------------- ------------------
                 Total adjustments                                   (89,040)           876,620           6,525,890
 ----------------------------------------------------------- ------------------ ------------------- ------------------
                 Net cash used in operating activities            (1,783,428)        (1,042,261)         (4,728,143)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash flows from investing activities:
    Acquisition of property and equipment                                  -            (14,000)            (42,587)
    Additions to software development costs                                -           (439,000)           (599,000)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
                 Net cash used in investing activities                     -           (453,000)           (641,587)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash flows from financing activities:
    Proceeds from sale of common stock to founding
       stockholders                                                        -                  -             204,000
    Proceeds from sale of common stock in private offering
       memorandum                                                     26,500          2,376,114           6,097,290
    Proceeds from exercise of options                                      -             75,000              75,000
    Proceeds from sale of common stock in public offering          1,715,800                  -           1,715,800
    Payment of conversion price of shares to certain
       stockholders                                                  (64,743)                 -             (64,743)
    Payments on note payable                                         (16,440)                 -            (120,000)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
                 Net cash provided by financing activities         1,661,117          2,451,114           7,907,347
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Net increase (decrease) in cash and cash equivalents               (122,311)           955,853           2,537,617
 Cash and cash equivalents, beginning of period                    3,541,829          1,581,764                   -
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash and cash equivalents, end of period                       $  3,419,518        $ 2,537,617        $  2,537,617
 ----------------------------------------------------------- ------------------ ------------------- ------------------
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.

                                       5

                                     <PAGE>

                                   Worlds Inc.
                        (a development stage enterprise)


                         Summary of Accounting Policies


Definitions         The Company is the resulting entity of two contemporaneous
                    mergers (the "Mergers") of Worlds Inc., a Delaware
                    corporation ("Predecessor"), with and into Worlds
                    Acquisition Corp., a Delaware corporation ("WAC"), and WAC
                    with and into Academic Computer Systems, Inc., a New Jersey
                    corporation ("Academic"), which changed its name to Worlds
                    Inc. (see Note 2). While Academic was the legal entity that
                    survived the mergers, WAC was the accounting acquiror in
                    both mergers. The Company's fiscal year-end is December 31.

                    The term the "Company," as used herein, refers to the
                    consolidated entity resulting from the two contemporaneous
                    mergers, as well the pre-merger Predecessor, WAC and
                    Academic; however, Predecessor, WAC and Academic are
                    hereinafter sometimes referred to separately as the context
                    requires.


Nature of Business  WAC was incorporated on April 8, 1997 to design, develop and
                    market three-dimensional ("3D") music oriented Internet
                    sites on the World Wide Web. These web sites are anticipated
                    to utilize 3D technologies developed by Predecessor.


Basis of
  Presentation      The accompanying financial statements are unaudited;
                    however, in the opinion of management, all adjustments
                    necessary for a fair statement of financial position and
                    results for the stated periods have been included. These
                    adjustments are of a normal recurring nature. Selected
                    information and footnote disclosures normally included in
                    financial statements prepared in accordance with generally
                    accepted accounting principles have been condensed or
                    omitted. Results for interim periods are not necessarily
                    indicative of the results to be expected for an entire
                    fiscal year. It is suggested that these condensed financial
                    statements be read in conjunction with the audited financial
                    statements and accompanying notes for the Company for the
                    year ended December 31, 1998 and for the Predecessor for the
                    period ended December 3, 1997.

                                       6
<PAGE>


                    The financial statements include the results of Predecessor
                    and Academic from December 4, 1997, the date of the Mergers
                    (the "Merger Date"). The financial statements have been
                    prepared in accordance with the provisions of Statement of
                    Financial Accounting Standards ("SFAS") No. 7, "Accounting,
                    and Reporting by Development Stage Enterprises," which
                    requires development stage enterprises to employ the same
                    accounting principles as operating companies.

 Fair               Value of Financial Instruments The carrying amounts of
                    financial instruments, including cash and short-term debt,
                    approximated fair value as of March 31, 1999 because of the
                    relatively short maturity of the instruments. The carrying
                    value of long-term debt, including the current portion,
                    approximates fair value as of June 30 1999, based upon
                    estimates for similar debt issues.


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


Cash and Cash
  Equivalents       Cash and cash equivalents are comprised of highly liquid
                    money market instruments, which have original maturities of
                    three months or less at the time of purchase.


Property and
  Equipment         Property and equipment are stated at cost. Depreciation is
                    calculated using the straight-line method over the estimated
                    useful lives of the assets, which range from two to five
                    years.

                                       7
<PAGE>


Revenue             Recognition Revenue from technology development and
                    licensing contracts is recognized upon the attainment of
                    contractual milestones (approximating the
                    percentage-of-completion method). Cash received in advance
                    of revenues earned is recorded as deferred revenue.


Inventory           Inventory consists of merchandise held for resale and is
                    valued at the lower of cost or market on a first-in,
                    first-out (FIFO) basis.


Software
   Development
   Costs            In accordance with the provisions of SFAS No. 86,
                    "Accounting for the Costs of Computer Software to be Sold,
                    Leased, or Otherwise Marketed", software development costs
                    incurred by the Company subsequent to establishing
                    technological feasibility of the resulting product or
                    enhancement and until the product is available for general
                    release to customers are capitalized and carried at the
                    lower of unamortized cost or net realizable value. Net
                    realizable value is determined based on estimates of future
                    revenues to be derived from the sale of the software product
                    reduced by the costs of completion and disposing of the
                    product. During the fourth quarter of 1998, technological
                    feasibility of the Company's software was established. In
                    this regard, $160,000 was capitalized and included in
                    property, equipment and software development as of December
                    31, 1998. During the six months ended June 30, 1999, a
                    further $439,000 was capitalized in this regard.
                    Amortization of the costs capitalized commenced in the first
                    quarter of 1999, based on current and anticipated future
                    revenues for each product or enhancement with an annual
                    minimum equal to straight-line amortization over the
                    remaining estimated economic life of the product or
                    enhancement.

Research and
   Development
   Costs            Research and development costs are expensed as incurred.

                                       8
<PAGE>


Income Taxes        The Company uses the liability method of accounting for
                    income taxes in accordance with SFAS No. 109, "Accounting
                    for Income Taxes." Deferred income tax assets and
                    liabilities are recognized based on the temporary
                    differences between the financial statement and income tax
                    bases of assets, liabilities and carryforwards using enacted
                    tax rates. Valuation allowances are established, when
                    necessary, to reduce deferred tax assets to the amount
                    expected to be realized.


Loss Per Share      In 1997, the Financial Accounting Standards Board's ("FASB")
                    SFAS No. 128, "Earnings per Share," replaced the calculation
                    of primary and fully diluted earnings (loss) per share with
                    basic and diluted earnings (loss) per share. Unlike primary
                    earnings per share, basic earnings per share excludes any
                    dilutive effects of options, warrants and convertible
                    securities. Diluted earnings per share is very similar to
                    the previously reported fully diluted earnings per share.
                    The loss per share amounts have been presented to conform to
                    SFAS No. 128 requirements. The common stock equivalents
                    which would arise from the exercise of stock options and
                    warrants are excluded from calculation of diluted loss per
                    share since their effect is anti-dilutive. Therefore, the
                    amounts reported for basic and diluted loss per share are
                    the same.


Stock-Based
    Compensation    In October 1995, the FASB issued SFAS No. 123, "Accounting
                    for Stock-Based Compensation". SFAS No. 123 encourages
                    entities to adopt the fair value method in place of the
                    provisions of Accounting Principles Board Opinion No. 25,
                    "Accounting for Stock Issued to Employees", for all
                    arrangements under which employees receive shares of stock
                    or other equity instruments of the employer or the employer
                    incurs liabilities to employees in amounts based on the
                    price of its stock. The Company has not adopted the fair
                    value method encouraged by SFAS No. 123 and will continue to
                    account for such transactions in accordance with APB No. 25.

                                       9
<PAGE>

Comprehensive
   Income           Effective January 1, 1998, the Company adopted SFAS No. 130,
                    "Reporting Comprehensive Income", which establishes
                    standards for reporting and display of comprehensive income,
                    its components and accumulated balances. Comprehensive
                    income is defined to include all changes in equity except
                    those resulting from investments by owners and distributions
                    to owners. Adoption of the standard has had no effect on
                    financial statement disclosures since there were no items of
                    comprehensive income during the periods presented.

                                       10
<PAGE>


                            Worlds Inc. - Predecessor
                        (a development stage enterprise)


                          Notes to Financial Statements




1.  Going Concern   As discussed in Note 3, the Company completed a private
                    placement raising gross proceeds of $4,415,000, consummated
                    a merger agreement with a development stage enterprise,
                    Predecessor, and completed a public offering in June 1998
                    raising gross proceeds of $1,832,000. Predecessor had not
                    generated significant revenues from operations and had an
                    accumulated deficit from inception to the Merger Date of
                    $21,236,139 and a capital deficit of $4,135,538. The
                    acquisition of Predecessor by the Company was accounted for
                    as a purchase. Accordingly, $6,135,538, the portion of the
                    purchase allocable to in-process research and development
                    projects that had not reached technological feasibility and
                    had no probable alternative future uses, was expensed by the
                    Company at the date of merger.

                    The accompanying financial statements have been prepared
                    assuming that the Company will continue as a going concern.
                    The Company is in the development stage and has had minimal
                    revenues from operations since the series of merger
                    transactions. The Company anticipates that it currently has
                    only a portion of the funds necessary to complete product
                    development and commercialization. There can be no assurance
                    that the Company will be able to obtain the substantial
                    additional capital resources necessary to pursue its
                    business plan or that any assumptions relating to its
                    business plan will prove to be accurate. The Company is
                    pursuing sources of additional financing and there can be no
                    assurance that any such financing will be available to the
                    Company on commercially reasonable terms, or at all. Any
                    inability to obtain additional financing will have a
                    material adverse effect on the Company, including possibly
                    requiring the Company to significantly curtail or cease
                    operations. These factors raise substantial doubt about the
                    ability of the Company to continue as a going concern. The
                    financial statements do not include any adjustments that
                    might result from the outcome of this uncertainty.


                                       11
<PAGE>


2.  The Mergers     On December 3, 1997, Predecessor was merged with and into
                    WAC in a series of related transactions which included a
                    simultaneous capital transaction between the Company and
                    Academic (the "Mergers") and a private offering of WAC's
                    securities (the "Private Placement"). In both the merger
                    with Predecessor and the capital transaction with Academic,
                    WAC was the acquiror for accounting purposes.

                    The acquisition of Predecessor was accounted for as a
                    purchase whereby all of the common and preferred stock of
                    Predecessor were exchanged for 1,999,996 shares of WAC. The
                    shares issued to Predecessor common and preferred
                    shareholders were valued at $1.00 per share which
                    represented the share value in the private placement that
                    occurred during this time period (see Note 3); a purchase
                    price of approximately $2,000,000. The exchange ratio was
                    determined after extensive negotiation between management of
                    Predecessor and WAC. Predecessor was a development stage
                    company, had not generated significant revenues from
                    operations and had an accumulated deficit from inception to
                    December 3, 1997 of $21,236,139 and a capital deficit of
                    $4,135,538. The assets acquired of Predecessor (cash,
                    prepaid expenses, property and equipment) were recorded at
                    fair market value which approximated book value at December
                    3, 1997, and, as discussed in Note 1 above, since
                    technological feasibility of the various Predecessor
                    technologies acquired had not been established, the excess
                    purchase price over Predecessor's capital deficit of
                    $6,135,538 was expensed as acquired research and
                    development. Academic was an inactive company with no
                    operations. The value assigned to the 910,000 shares in the
                    capital transaction with Academic on December 3, 1997
                    represented Academic's net tangible assets (primarily cash)
                    of $558,026. During June 1998, 113,465 shares of common
                    stock were converted at $0.57 per share ($64,743) as a
                    result of certain stockholders dissenting with respect to
                    the Academic/WAC capital transaction of December 3, 1997.
                    Such reacquired shares have been classified as treasury
                    stock in the accompanying balance sheets.

                    While no trading market existed for the securities of
                    Academic, the Company's common stock is traded on the
                    Bulletin Board.

                                       12
<PAGE>
3.  Private
       Placemen
       and Public
       Offering     The Private Placement called for WAC to offer for sale a
                    maximum of 50 units (57-1/2 with the over-allotment), each
                    consisting of 120,000 shares of WAC's common stock (the
                    "Units") at a price of $120,000 per Unit. In connection with
                    the Private Placement, the placement agent was to receive
                    one warrant to purchase one share of WAC's common stock at
                    $1 per share for every $40 of gross proceeds from the sale
                    of the Units. On November 21, 1997, WAC sold 31.67 Units
                    with gross proceeds of $3,800,000 (3,800,000 shares) (the
                    "Initial Private Placement Closing") and the placement agent
                    was issued 425,000 shares of common stock. On December 31,
                    1997, the Company sold 4.88 Units with gross proceeds of
                    $585,000 (585,000 shares). On January 2, 1998, a further
                    30,000 shares were issued with gross proceeds of $30,000.
                    Cumulative net proceeds, after commissions and expenses of
                    the offering, aggregated $3,721,176.

                    WAC agreed to include the shares of common stock underlying
                    the Units sold in the Private Placement (the "Private
                    Placement Shares") in a registration statement to be filed
                    with the Securities and Exchange Commission (the "SEC").
                    Such registration statement was declared effective on May 1,
                    1998. During June 1998, WAC sold 1,832,000 shares in a
                    public offering of its stock and received gross proceeds of
                    $1,832,000. Net proceeds, after commissions of this
                    offering, aggregated $1,715,800.

                    During June 1999, the Company sold 615,000 shares in a
                    private offering memorandum and received gross proceeds of
                    $2,460,000. Net proceeds, after commissions and expenses of
                    this offering, aggregated $2,376,114.

                                       13
<PAGE>


4. Contingencies    On March 23, 1999, the Company entered into a three-year
                    financial advisory and consulting agreement (that became
                    effective during April 1999) with a consulting firm
                    controlled by the Company's Chairman that provides for an
                    annual fee of $120,000, escalating to $300,000 annually if
                    the Company raises $5 million in cash and the market value
                    of the Company's issued and outstanding common stock is no
                    less than $100 million. In addition, the Company granted
                    warrants to such firm to purchase 1,000,000 shares of common
                    stock at $.50 per share. Such warrants were valued at
                    $465,000 and charged to selling, general and administrative
                    expenses in the quarter ended June 30, 1999. The warrants
                    are exercisable through April 13, 2006 and contain
                    anti-dilution provisions and both "demand" and "piggy-back"
                    registration rights.

                    Further, in connection with the above consulting agreement,
                    three founding stockholders of WAC agreed to contribute
                    1,500,000 shares to the capital of the Company (included in
                    treasury stock).

5.  Content Supply
       Agreement    During June 1999, the Company entered into a content supply
                    agreement for a 3D internet site offered by an Internet
                    service provider (the "Provider"). Under the terms of the
                    agreement, the Company paid $125,000 and issued 93,750
                    shares of common stock upon signing (included in other
                    assets aggregating $500,000). A further $125,000 and 93,750
                    shares is required to be delivered to the Provider upon
                    launch of the site which is expected to occur during the
                    quarter ended September 30, 1999.

                                       14
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

         The following discussion should be read in conjunction with the
financial statements and related notes which are included under Item 1.
Statements made below which are not historical facts are forward-looking
statements. Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, general economic conditions, our
ability to complete development and then market our products, competitive
factors and other risk factors as stated in other of our public filings with the
Securities and Exchange Commission.

         We were formed on May 20, 1968. From 1975 until December 1997 we were
inactive with no operations and our only income was from interest, gain on the
sale of securities and dividends. In December 1997 a series of mergers occurred
involving us, Worlds Acquisition Corp. and our predecessor, Worlds Inc.
Following the mergers, we have been engaged in the business and operations
formerly conducted by our predecessor and have changed our name to adopt that of
our predecessor, Worlds Inc. Accordingly, a discussion and analysis of our
financial condition and results of our operations without discussing our
predecessor would be of limited importance to any reader. Thus, included herein
is a discussion of our predecessor's pre-mergers operations.

Background

         Predecessor was formed in April 1994 to design, develop and
commercialize 3D multi-user tools and technologies for the Internet market. From
inception through 1997, predecessor's operations were limited and consisted
primarily of start-up activities, including recruiting personnel, raising
capital, custom production work, and research and development. In the third
quarter of 1996, predecessor launched its first commercial user-oriented 3D chat
site, Worlds Chat 1.0, and began selling the client interface software through
direct sales channels. These sales were nominal. In October of 1996, predecessor
introduced its first commercial toolset for developing 3D multi-user
applications. In the first quarter of 1997, after an unsuccessful effort to
raise capital, predecessor became insolvent and released most of its personnel,
and management sought to sell predecessor and/or its technology. Predecessor did
not generate significant revenues.

         While we have completed development and market testing of Worlds Gamma
and 3D Internet music sites, we may not generate significant revenues until
after we successfully attract and retain a significant number of VIP
subscribers, customers and/or advertisers. We anticipate continuing to incur
significant losses until, at the earliest, we generate sufficient revenues to
offset the substantial up-front expenditures and operating costs associated with
developing and commercializing our proposed products. There can be no assurance
that we will be able to attract and retain a sufficient number of VIP
subscribers, customers and/or advertisers to generate significant revenues or
achieve profitable operations or that our products and services will prove to be
commercially viable.

                                       15
<PAGE>

         We classify our expenses into three broad groups: (1) research and
development; (2) cost of revenues; and (3) selling, general and administration.
Software development costs, consisting primarily of salaries and related
expenses, incurred prior to establishing technological feasibility are expensed
in accordance with Financial Accounting Standards Board (FASB) Statement No. 86.
In accordance with FASB 86, we will capitalize software development costs at
such time as the technological feasibility of the product has been established.
We began capitalizing our software in the 4th quarter of 1998 with the
commercial release of three products, Animal House, BowieWorld and Worlds
Ultimate 3D Chat. For the first quarter of 1999 approximately $214,000 of such
expenditures were capitalized. For the second quarter of 1999 approximately
$225,000 of such expenditures were capitalized.

Plan of Operation

         During the fourth quarter of 1998, we successfully completed the
development of our Gamma development tool kit and commercially released three
products utilizing our 3D Internet technology. During the first and second
quarters of 1999 we continued holding discussions with several major record
labels and companies for them to distribute Worlds Gamma, along with music
related web site access. Our strategy of distributing our products on CD+ is
wholly dependent upon obtaining distribution agreements with record labels,
artists or record companies. We have also begun to distribute our services via
internet service providers, broadband service providers via cable modems and a
mini-downloadable version. To date, we have entered into several agreements.

         We have also been actively pursuing strategic alliances with a number
of companies that can provide exposure and distribution of our products and
technology. These meetings started paying dividends during the first half of
1999 as we engaged in serious negotiations that led to the following agreements.

                - In June 1999 we launched HansonWorld, the first 3D chat
                  environment utilizing our 3D technology on a special CD which
                  was distributed to the fan club of Hanson.

                - We entered into two agreements with Freeserve Plc., United
                  Kingdom's largest Internet Service Provider and a leading U.K.
                  Internet Portal. The first agreement provides for us to be the
                  official 3D Internet broadband chat content provider on
                  Freeserve which will include our 3D Internet Technology and 3D
                  broadband content on millions of new Freeserve ISP access CDs.
                  The second agreement provides for us to be the official and
                  exclusive 2D, or HTML, Internet chat content provider on the
                  Freeserve ISP service.

                - We entered into agreements with third party content providers
                  to be integrated into the Road Runner broadband offering,
                  Hang@worlds.com.

                - We added the following artists to our e-commerce website,
                  WorldsStore.com.

                                       16
<PAGE>

         WuWearStore.com, Fivestore.com, B*Witchedstore.com, SherylCrow
store.com, Eminemstore.com, BruceSpringsteenstore.com, RickyMartinstore.com,
Deftones store.com, Metallicastore.com, TimMcGrawstore.com,
TheCranberriesstore.com and Britney Spearsstore.com.

         During this quarter we also continued to upgrade our e-commerce web
site, WorldsStore.com, purchased inventory for sale through our web site,
enhanced features to our core technology by improving the audio and video
streaming features, continued to improve our voice-to-voice Internet telephony
and increased our customer service program.

         We currently have eleven full-time employees and are working with seven
independent software contractors who were former employees of our predecessor.
We do not anticipate hiring additional employees or purchasing additional plant
or equipment other than that needed on a day-to-day basis until product sales
increase significantly and/or significant additional financing is obtained.

         In June and August 1999, we consummated two tranches of a private
placement, selling an aggregate of 57.5 units. Each unit cost $60,000 and
consisted of 15,000 shares of common stock and warrants to purchase 7,500 shares
of common stock. At June 30, 1999, we had raised gross proceeds of $2,376,114
through June 30, 1999, and additional gross proceeds of $1,073,886 thereafter
through August 31, 1999, in the private placement.


                                       17
<PAGE>


Results of Our Operations

Six Months Ended June 30, 1999 Compared to the Six Months Ended June 30, 1998

         The following data extracted from the attached unaudited financial
statements compares the results of our operations for the six months ended June
30, 1999 to the six months ended June 30, 1998.


                                                  Six months ended June 30,
                                            ------------------------------------
                                                        (unaudited)

                                                1999                      1998
                                                ----                      ----


Net Revenue..............................$     92,925              $     16,132

Costs & Expenses:
      Cost of revenues...................    (70,355)                   (25,101)
      Selling, general & administrative.. (1,890,495)                (1,307,525)
      Research & development.............      --                      (534,428)

Operating Loss...........................$(1,867,925)              $ (1,850,922)

Other Income (Expense):
         Interest income.................     17,966                     76,992
         Interest expense................     (68,922)                  (72,112)

Loss before taxes & extraordinary item...  (1,918,881)               (1,846,042)

Extraordinary item B gain on debt
     settlement..........................      --                       151,654

Net Loss.................................$ (1,918,881)             $ (1,694,388)
                                         -------------             -------------

         In the first half of 1999, we continued to upgrade our core technology
and began production on new projects in anticipation of reaching agreements with
other entities with whom we are in negotiation. No assurance can be given that
any negotiations will lead to the consummation of any additional agreements. In
the first six months of 1999, we continued the implementation of our new
business plan. Significant expenditure was incurred towards completion of the
Gamma technology and also with legal and professional fees.

         Revenues are nominal and are derived from our agreements with companies
such as Road Runner and Freeserve, our Worlds Ultimate 3D Chat product and the
operation of our e-commerce web site featuring artist related Internet stores
such as DavidBowieStore.com, NinetyEightDegreesStore.com and EltonJohnStore.com.
Revenue was $92,925 and had associated direct costs of $70,355 for the six
months ended June 30, 1999, compared to $16,132 in revenue and $25,101 of direct
costs for the same period in 1998.

                                       18
<PAGE>

         Selling, general and administrative expenses were $1,890,495 for the
six months ended June 30, 1999. This represented an increase of $582,970 from
$1,307,525 compared to the six months ended June 30, 1998. This increase was
directly attributable to the higher costs associated with maintaining our new
e-commerce site, retaining expert software developers to improve and upgrade our
existing products, costs involved in beginning work on some of the new projects
discussed above in anticipation of reaching final agreements and a charge of
$465,000 for consulting fees with respect to the agreement signed with a firm
controlled by our chairman.

         We incurred no research and development costs during the six months
ended June 30, 1999 as compared to $534,428 for the six months ended June 30,
1998. This is directly attributable to the fact that since our technology is now
technologically feasible, (i.e., it works), all expenses for research and
development are now capitalized. For the first six months of 1999, $439,000 of
such expenditures were capitalized.

         Other income included $17,966 of interest income in the six months to
June 30, 1999 earned from the remainder of the proceeds of our share offerings
as compared to $76,992 in the six months ended June 30, 1998. Other expenses
included interest expense of $68,922 directly attributable to our predecessor's
notes payable in the six months to June 30, 1999. Interest expense in the six
months to June 30, 1998 was $72,112.

         As a result of the foregoing we incurred a net loss of $1,918,881 for
the six months ending June 30, 1999, compared to a loss of $1,694,388 for the
six months ending June 30, 1998, an increase of $224,493.  The loss in the 1998
period was after an extraordinary gain of $151,654.

Three Months Ended June 30, 1999 Compared with Three Months Ended June 30, 1998


                                                     Three Months Ended
                                                --------------------------------
                                                 6/30/99               6/30/98
                                                ------------       -------------

Net Revenue                                     $    57,748        $     12,130
Costs & Expenses:
         Cost of revenues                           (48,891)            (22,500)
         Selling, general & administrative       (1,274,680)           (759,185)
         Research & development                        --              (302,516)

Operating Loss                                   (1,265,823)         (1,072,071)

Other Income (Expense):
         Interest income                              5,180              35,054
         Interest expense                           (30,000)            (35,656)

Loss before taxes                                (1,290,643)         (1,072,673)

Net Loss                                         (1,290,643)         (1,072,623)


                                       19
<PAGE>


         Revenues are nominal and are derived from our Worlds Ultimate 3D Chat
product and from sales on our e-commerce web site where we currently operate
artist or artist related Internet stores such as DavidBowieStore.com,
NinetyEightDegreesStore.com and EltonJohnStore.com, among others. Revenue was
$57,748 and had associated direct costs of $48,891 for the three months ended
June 30, 1999, compared to $12,130 in revenue and $22,500 of direct costs for
the same period in 1998.

         Selling, general and administrative expenses were $1,274,680 for the
three months ended June 30, 1999. This represented an increase of $525,495 from
$759,185 compared to the three months ended June 30, 1998. This increase was
directly attributable to the higher costs associated with maintaining our new
e-commerce site, retaining expert software developers to improve and upgrade our
existing products and costs involved in beginning work on some of the new
projects discussed above and a charge of $465,000 for consulting fees with
respect to the agreement signed with a firm controlled by our chairman.

         We incurred no research and development costs during the three months
ended June 30, 1999 as compared to $302,516 for the three months ended June 30,
1998. This decrease is directly attributable to the fact that since our
technology is now technologically feasible, i.e., it works, all expenses
previously charged to research and development are capitalized. For the second
quarter of 1999, $225,000 of such expenditures were capitalized.

         Other income included $5,180 of interest income in the three months to
June 30, 1999 earned from the remainder of the proceeds of our share offerings
as compared to $35,054 in the three months ended June 30, 1998. Other expenses
included interest expense of $30,000 directly attributable to the Predecessor's
notes payable in the three months to June 30, 1999. Interest expense in the
three months to June 30, 1998 was $35,656.

         As a result of the foregoing we incurred a net loss of $1,290,643 for
the three months ending June 30, 1999, compared to a loss of $1,072,673 for the
three months ending June 30, 1998, an increase of $218,970.  See Statement of
Operations on Page 3.

Liquidity and Capital Resources of the Company

         Net cash provided from January 1, 1999 through June 30, 1999 was
$955,853. At June 30, 1999, we had working capital of $1,179,631 and cash and
cash equivalents in the amount of $2,537,617.

         On December 3, 1997, the mergers were deemed to close as well as the
first round of a private placement of our common stock raising gross proceeds of
$3.8 million, by selling 3.8 million shares, of which we netted approximately
$3,000,000. We also acquired approximately an additional $560,000 from one of
the other parties to the mergers.

         Prior to the mergers, we had 910,000 shares outstanding. Effective
December 31, 1997, we closed on an additional $585,000 of gross proceeds from
the private offering, of which we netted $529,000, and issued an additional
585,000 shares of common stock and on January 2, 1998 received an additional
$30,000, of which we netted $26,500, and issued an additional 30,000 shares. In
June 1998, we closed on a secondary offering of $1,832,000 gross proceeds, of
which we netted $1,715,800 by selling 1,832,000 shares at $1.00 per share.

                                       20
<PAGE>

         In June and August 1999, we consummated two tranches of a private
placement, selling an aggregate of 57.5 units. Each unit cost $60,000 and
consisted of 15,000 shares of common stock and warrants to purchase 7,500 shares
of common stock. At June 30, 1999, we had raised gross proceeds of $2,376,114
through June 30, 1999, and additional gross proceeds of $1,073,886 thereafter
through August 31, 1999, in the private placement.

         We will need to raise additional capital during 2000, which may be in
the form of equity or debt financing. Any issuance of equity securities would
dilute the interest of our shareholders. Additionally, if we incur debt, our
company will become subject to risks that interest rates may fluctuate and cash
flow may be insufficient to pay the principal and interest on any such debt. If
financing is not available when as we require, we could be force to slow down
the growth of our business or suspend operations entirely.

         Our capital requirements relating to the commercialization of Worlds
Gamma and development of web site access and content for the music industry have
been and will continue to be significant. We are dependent on the proceeds of
future financings in order to continue in business and develop and further
commercialize our proposed products.

         We anticipate, based on currently proposed business plans and
assumptions relating to our operations, including the timetable of, and costs
associated with, product development and commercialization, that we have only a
portion of the funds necessary to complete product development and
commercialization. Satisfactory completion of product development and
commercialization will require capital resources substantially greater than
those currently available to us. In addition, as a result of the mergers by
operation of law, we assumed predecessor's then liabilities of approximately
$4.6 million, the majority of which has since been paid or renegotiated. At June
30, 1999, our total liabilities were approximately $3,360,000 million, including
the long term portion of notes payable of $1,853,000.

         There can be no assurance that we will be able to obtain the
substantial additional capital necessary to permit us to attract and retain a
sufficient number of subscribers or that any assumptions relating to our
business plan will prove to be accurate. While we hope to raise additional
financing, we have no current arrangements with respect to, or sources of,
additional financing and there can be no assurance that any such financing,
particularly the significant amounts of financing that would be required, will
be available to us on commercially reasonable terms, or at all. Any inability to
obtain additional financing will have a material adverse effect, including
possibly requiring us to significantly curtail or cease operations.

Effect of Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"), which requires companies
to recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. SFAS No. 133 is
effective for fiscal years beginning after June 15, 1999. The Company does not
presently enter into any transactions involving derivative financial instruments
and, accordingly, does not anticipate the new standard will have any effect on
its financial statements.

                                       21
<PAGE>

Year 2000 Disclosure

         We are Year 2000 compliant and we do not anticipate any internal
problems. In the event any internal problems should arise, we have many expert
computer technicians on our payroll and we believe that we will be able to
satisfactorily address any such problems. However, we are dependent on the
integrity of the Internet being maintained to derive income from the sale of
merchandise on our own e-commerce site and through links to the products we
create. We have employed a redundancy system as a safeguard to protect the
viability of our site by having our site hosted by two of the larger Internet
Service Providers. Thus, in the event one of our hosts should fail, we could
continue uninterrupted on the other Internet Service Provider. We have been
advised that our hosts are addressing the Year 2000 issue and hope to be
compliant. We use Wells Fargo to process our e-mail transactions. Wells Fargo
processes a significant portion of all Internet e-commerce transactions and if
it fails due to Year 2000 problems we will be negatively impacted, but not
likely more than many other e-commerce vendors. In summary, we are totally
dependent upon 3rd parties for hosting and processing our e-commerce activities
and while we cannot control the actions of these 3rd parties, we believe that
given our redundant safeguards, the availability of other hosts and processors
to switch to in the event our current hosts and/or processor crashes and the
fact that we only see nominal revenue from our e-commerce at this time, we do
not believe that our profitability or operations will be materially affected by
the Year 2000 problem.

                                       22
<PAGE>
                                     PART II
                                OTHER INFORMATION

Item 5.  Other Information.

         On May 12, 1999, we began an exempt private offering under Rule 506 as
promulgated under the Securities Act of 1933, as amended. We were seeking to
raise $2-4 million through the sale of a unit offering. The offering was offered
solely to "accredited investors" and pursuant to a private placement memorandum
and subscription agreement.

         In June and August 1999, we consummated two tranches of a private
placement, selling an aggregate of 57.5 units. Each unit cost $60,000 and
consisted of 15,000 shares of common stock and warrants to purchase 7,500 shares
of common stock. At June 30, 1999, we had raised gross proceeds of $2,376,114
through June 30, 1999, and additional gross proceeds of $1,073,886 thereafter
through August 31, 1999, in the private placement.

         On August 8, 1999 we adopted the name Worlds.com as the new name under
which we will conduct business.

         The previous disclosure in this Item 5 is a "forward looking statement"
which may never eventuate.

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

         (a)      A financial data schedule is filed herewith as an exhibit.

         (b) No reports on Form 8-K were filed during the quarter for which this
report is being filed.

                                       23
<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned thereto duly
authorized.

Date: September 3, 1999

                                                    WORLDS INC.


                                                    By:  /s/ Thomas Kidrin
                                                    ----------------------------
                                                    Thomas Kidrin
                                                    President, CEO and Treasurer