<DOCUMENT-COUNT>     1
<SROS>     NONE
<FILER>


</FILER>
<PERIOD>     12/31/2001

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
(Mark  One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF  1934

For  the  fiscal  year  ended  December  31,  2001
                               -------------------

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

For  the  transition  period  from           to
                                   ----------  ----------
                         Commission file number 0-28058
                                                -------

                             VILLAGEWORLD.COM, INC.
                             ----------------------
                 (Name of small business issuer in its Charter)

          New  York                                    11-3137508
          ---------                                    ----------
     (State  or other                              (I.R.S.  Employer
      jurisdiction of                           Identification  No.)
   incorporation or organization)

     620  Johnson  Avenue,  Bohemia,  New  York               11716
     ------------------------------------------               -----
      (Address  of  principal  executive  offices)        (Zip  Code)

                                 (631) 218-0700
                                 --------------
                 (Issuer's telephone number Including Area Code)

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  None

Securities  registered  pursuant  to Section 12(g) of the Act: Common Stock, par
value  $.001  per  share

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

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of  the  Issuer's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [  ]

     The  Issuer's  revenues  for  its  most recent fiscal year were $3,911,503.

     As  of  March  28,  2002, the aggregate market value of the Issuer's Common
Stock held by non-affiliates of the Issuer (based on the last sale price of such
stock  of  $.26)  was  approximately  $4,060,573.  At March 28, 2002, 23,544,986
shares  of the Issuer's Common Stock were outstanding.  (Assuming the conversion
of all outstanding Class B Preferred Stock the outstanding common stock at March
28,  2002  would  increase  to  93,669,962  shares).

                       DOCUMENTS INCORPORATED BY REFERENCE

     The  information required by Part III of this Report, to the extent not set
forth  herein,  is  incorporated  herein  by  reference  from  the  registrant's
definitive  proxy statement relating to the annual meeting of stockholders to be
held  in  2002,  which  definitive  proxy  statement  shall  be  filed  with the
Securities  and  Exchange Commission within 120 days after the end of the fiscal
year  to  which  this  Report  relates.




                                                                               1
<PAGE>








                                           VILLAGEWORLD.COM, INC.
                                INDEX TO ANNUAL REPORT ON FORM 10-KSB
                            FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
                               FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                            -------------------------------------------------

                                           ITEMS IN FORM 10-KSB
                                          -----------------------


<TABLE>
<CAPTION>



<S>                                       <C>                                                      <C>

                                                                                                    Page
                                                                                                   -----
Facing page
Part I
-------

Item 1.                         Description of Business                                                 3
Item 2.                         Description of Property                                                 5
Item 3.                         Legal Proceedings                                                    None
Item 4.                         Submissions of Matters to a Vote of Security Holders                 None

Part II
-------

Item 5.                         Market for Common Equity and Related Stockholder Matters                6
Item 6.. . . . . . . . . . . .  Management's Discussion and Analysis of Financial
                                Condition and Results of Operations. . . . . . . . .                    7
Item 7.                         Financial Statements                                                   11
Item 8.. . . . . . . . . . . .  Changes in and Disagreements with Accountants on
                                Accounting and Financial Disclosure . . . . . . . . .                None

Part III
--------

Item 9.. . . . . . . . . . .    Directors, Executive Officers, Promoters and Control Persons;
                                Compliance with Section 16(a) of the Exchange Act                      12
Item 10.                        Executive Compensation                                                 13
Item 11. . . . . . . . . . . . .Security Ownership of Certain Beneficial Owners and Management         13
Item 12.                        Certain Relationships and Related Transactions                         13
Item 13.                        Exhibits and Reports on Form 8-K                                       14

Signatures . . . . . . . . . . . . . . .                                                               15
</TABLE>




                                                                               2
<PAGE>


                                     PART I
ITEM  1.  DESCRIPTION  OF  BUSINESS

GENERAL

     Our  Company, VillageWorld.com, Inc.,  provides community-oriented Internet
access  under  private  labels  and  installs,  maintains  and services computer
network  systems consisting of full hardware and proprietary software solutions.
Our  Internet   services   division  is  run  by  our  wholly-owned  subsidiary,
VillageNet,  Inc.,  and  our network systems division is run by our wholly-owned
subsidiary,  Intelligent  Computer Solutions, Inc.  During the last fiscal year,
revenues from our private label Internet access business increased by almost one
and  a  third,  while  revenues  from hardware sales, installation, maintenance,
consulting  and  other  sources  declined  by  approximately  three-eighths.  We
recently  expanded  our networking installation and consulting business into the
international  market.  We  intend to continue expanding our community-based and
private   label   Internet   services  as  well  as  our  networking   services,
particularly,  internationally.  Hardware  sales,  which  have  always  been the
highest   cost  of  our  revenue  sources,  will  likely  continue  to  decline.

     One  of the great benefits of the Internet is its ability to connect people
to  the  four  corners  of the Earth and expose them to a wealth of information,
peoples  and  cultures not previously attainable.  Nevertheless, we believe that
individuals would still like to remain a part of a distinct localized community.
By providing our community-based Internet service providers ("ISP's") consisting
of  our  Private  Label  ISP's,  we  believe  we are affording the user a unique
opportunity to combine the benefits afforded by the long reach of the World Wide
Web,  while  maintaining  the  comforts of being part of a close-knit community.

INTERNET  SERVICE  PROVIDER

     We believe that individuals would like to combine the far-reaching benefits
of  the  Internet, while remaining a part of a distinct localized community.  By
providing  our  community-based Internet service providers ("ISP's"), we believe
we  are  affording  users  a  unique opportunity to achieve that hybrid in their
on-line  activities.

     Our  Private Label ISP's target Internet users who already have an affinity
for,  or  a  pre-existing  relationship  with,  the  organization,  company,  or
individual  that  offers  our  ISP  under  their  own brand name.  We design and
implement  a customized ISP and home page for such Private Label ISP, as well as
provide Internet access, billing services, community tools, customer service and
technical  support.  The  Private  Label  ISP  is  responsible for marketing the
service  to its intended subscriber base and for providing relevant content that
will  create  added  value  for  its  ISP.

     During  the fiscal year ended December 31, 2001, we generated revenues from
our  monthly  Internet  subscription  services of $2,141,724.  Such revenues are
generated  typically  through the payment to us of a monthly subscriber fee.  We
presently  have  approximately  25,000  paying subscribers for our ISP services.
Commencing  in  fiscal 2000 we contracted with Ultrastar Internet Services, LLC,
to  provide  Ultrastar  with  Internet access and technical support for Internet
services, using as the names of the Private Label ISP's those which Ultrastar is
contractually  permitted  to  use,  such  as  David  Bowie,  Gaither and Hanson.
Two-thirds  of  our  growth  in subscription service revenue in fiscal 2001 came
from  this  customer;  for  such year they comprised 33.6% of our total revenue.
Our  agreement  with  Ultrastar  allows  them  to  cancel upon thirty days prior
written  notice.   (See   Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations).

NETWORK  SYSTEMS

     During  the fiscal year ended December 31, 2001, we generated $1,700,067 in
revenue  through  our  sale,  installation,  maintenance and service of computer
network  systems.  To date, we have established eighty separate network systems,
each of which is based on a school district or educational institution.  We seek
to  enlist  potential  subscribers  for  our Internet services from each network
system we install, particularly from the schools and institutions themselves and
the  students, parents, teachers and staff of the schools in the school district
of  the  educational  institution.





                                                                               3
<PAGE>


     In  October 2001 we announced the final approval by the U.S. Air Force of a
multi-million  dollar  contract  to  implement  a  local  and  wide area network
(LAN/WAN)  solution  for the Royal Saudi Air Force ("RSAF") awarded to a related
company,  ATTI  International  Development,  Inc.  ("AID").  We  are a principal
sub-contractor  on  this  project, pursuant to a verbal agreement with AID.  The
initial  contract is for the upgrade of Prince Sultan Air Base for approximately
$7,000,000.  AID  has  advised us that the portion of the contract to be jointly
administered   between   us  is  approximately  $4,000,000.    We  will  provide
engineering,  network design, equipment installation, implementation and overall
management   services  for  this  joint   project,   which   will  constitute  a
comprehensive  upgrade  and redevelopment of systems currently used by the RSAF.
These  services  are  expected  to  comprise approximately $600,000 of the joint
project.  The  $3,400,000  equipment  portion  of  the  joint  project  is being
provided  by  AID.

In  December  2001  we commenced work on our portion of the initial contract and
received the first $100,000 contract-related payment.  The verbal agreement with
AID  provides  for  five  additional  monthly  payments,  each  in the amount of
$100,000.  During  the  first  quarter  of  fiscal  2002,  we received the three
scheduled  $100,000  payments.

     The  hardware  and  software  equipment and systems we sell and install are
manufactured  and  supplied  by  the largest and best known companies, including
Cisco  Systems,  Sun  Microsystems,  Microsoft,  Oracle, IBM, Digital Equipment,
Compaq  Computer and Intel.  These and other vendors help train our employees in
the  use,  installation  and  maintenance  of  their  products.

BUSINESS  STRATEGY

     We  are  seeking to grow our ISP subscriber base through the development of
third party ISP's.  We believe that the growth of Private Label ISP's will allow
us to increase our subscriber base without incurring the expense of an extensive
marketing  and  advertising campaign.  By partnering with established brands and
affinity  groups,  we believe we can capitalize on the ability of these entities
to  offer  VillageWorld  Internet  services  to  their  targeted  and  committed
membership  or  community.

     With  the recent demise of several high profile free ISP's, we believe that
the free ISP model has a limited future.  We will seek to contract with existing
Private  Label  ISP's  that  are  in need of a technology partner to provide the
Internet  access to their subscriber base that the free ISP's no longer provide.
We  believe  that  we  are  in  a position to accomplish this task.  We have had
success  in  launching several Private Label ISP's such as BowietNet, HansonNet,
and  GaitherNet.  We have experience in working with the third parties that have
created  these branded ISP's  and portals and can customize  tailored  solutions
to help  our  partners  realize  their  own  unique  goals.

     We  also  recently  expanded  our  networking business internationally as a
sub-contractor  to  a  related  company,  AID.  AID  estimates  that all LAN/WAN
upgrades  for  the  14  locations  throughout  the kingdom of Saudi Arabia could
exceed  one  hundred million dollars over the next 3-4 years.  We believe we are
in  the  lead  position  to  sub-contract  the design and related implementation
services  for  these  additional  projects.

COMPETITION

     There  are  many  companies  that  provide  the  same  network installation
services  that  we offer.  There are also many Internet service providers.  Many
of  those  and other potential competitors are well established, are much larger
than we are and have substantially greater financial and other resources than we
have.  Our  success  will  depend  on  our  ability  to establish and maintain a
competitive  position  in  these  marketplaces,  which we may not be able to do.

TRADEMARKS  AND  SERVICE  MARKS

     Our  service  marks  "Village World(R)" and "Village Net(R)" are registered
with  the  United States Patent and Trademark Office.  We have filed a trademark
application   with  the  United  States  Patent  and  Trademark  Office  seeking
registration  for  "VillageWorld.com".





                                                                               4
<PAGE>
EMPLOYEES

     We  presently  employ  24  people,  two of whom are our Executive Officers.
Five  of  these  people,  including  one  executive, are currently employed on a
part-time  basis.  None of our employees are represented by a union.  We believe
our  relationships  with  our  employees  are  satisfactory.

CORPORATE  INFORMATION

     We  were  incorporated  in New York on December 14, 1992 under the name Big
City  Bagels,  Inc.  On  July  1,  1999,  Big  City Bagels, Inc. consummated the
transactions  contemplated by an Agreement and Plan of Reorganization and Merger
with  Intelligent  Computer  Solutions,  Inc.,  VillageNet, Inc. and each of the
shareholders  of  those two companies, dated May 21, 1999 and as amended on June
28,  1999.  The  agreement  provided  for the merger of Big City Bagels with and
into  ICS  and  VillageNet,  respectively,  and for ICS and VillageNet to be the
surviving  corporations  continuing as wholly-owned subsidiaries of the Company.
On  December  30,  1999,  we  changed  our  name  to VillageWorld.com, Inc.  Our
principal executive offices are located at 620 Johnson Avenue, Bohemia, New York
11716.  Our phone number is (631) 218-0700 and our fax number is (631) 218-0769.
We  also   maintain  an  Internet  site  at  www.villageworld.com.   Information
contained on our web site is not, and should not be deemed to be, a part of this
Annual  Report  on  Form  10-KSB.

ITEM  2.  DESCRIPTION  OF  PROPERTY

     Our  principal  offices  are  located  in  leased facilities at 620 Johnson
Avenue, Suites 1A, 1B and 6, Bohemia, New York 11716. The lease term for each of
the  Suites  expires  March 31, 2002.  For the use of Suites 1A, 1B and 6 we pay
annual  rent  of  $38,000,  $39,000  and  $33,600, respectively.  Our leases had
renewal  options  for  terms  of  three, five, and five years respectively, with
rents  increasing  by  4%, 4% and 5% for each year of the renewal term.  Renewal
required six months prior written notice, which we did not give to our landlord.
However  in  March of 2002, our landlord verbally agreed to a one-year extension
for  all  three suites with no increase in rent as well as a cancellation option
for  one  suite  after  three months with no penalty.  We expect to sign a lease
modification  agreement  soon.





                                                                               5
<PAGE>


                                     PART II
                                     -------

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

MARKET  INFORMATION

     Our  common  stock  is  quoted  under the symbol "VILW" on the OTC Bulletin
Board.  The  following table sets forth the range of high and low bid quotations
of  our  common  stock,  as  reported by Nasdaq, for the periods indicated.  The
prices  represent  inter-dealer quotations, which do not include retail markups,
markdowns  or  commissions,  and  may  not  represent  actual  transactions.

<TABLE>
<CAPTION>

                                      2001                  2000
                                      -----                 -----
<S>                                   <C>    <C>             <C>    <C>
                               High. . .  Low            High       Low
                              -------    ------        -------    -----
         First Quarter. .    $ .28      $ .08          $4.38       $.44
         Second Quarter        .41        .08           2.69        .66
         Third Quarter.        .22        .08            .92        .30
         Fourth Quarter        .37        .07            .42        .06
</TABLE>


SECURITY  HOLDERS

     At   March  28,  2002   there  were   23,544,986  shares  outstanding   and
approximately  115  holders  of  record of Common Stock.  We believe there is in
excess  of  500  beneficial owners of our Common Stock, most of whose shares are
held  in  street name.  The number of outstanding shares does give effect to the
deemed  issuance of 292,000 shares of common stock issuable upon the exercise of
common  stock  purchase options, all exercisable at $.01 per share.  This figure
of outstanding shares does not include (i) 70,124,976 shares of our Common Stock
issuable  upon  conversion, at a rate of 138-to-1, of 508,152 outstanding shares
of  our  Class B Preferred Stock; (ii) any Common Stock issuable upon conversion
of  our  Class  C  Preferred  Stock  of  which  8,777.59  shares  are  presently
outstanding; and (iii) 912,447 shares of Common Stock issuable upon the exercise
of  715,667  outstanding  warrants  and  196,780  outstanding  options.

DIVIDEND  POLICY

     We  have  not paid, and our board of directors does not presently intend to
declare,  any  dividends  on  our  Common  Stock  in the foreseeable future.  We
anticipate  that  all  of  our  earnings  and  other  resources, if any, will be
retained  by  us  for  investment in our business.  Even if we wanted to pay any
dividends,  the  designation  of  preferences  for  our  Class C Preferred Stock
prohibits  payment  of dividends on our Common Stock so long as the dividends on
such  preferred stock are unpaid.  In addition, we may incur indebtedness in the
future,  the  terms  of  which  may  prohibit  or  effectively restrict dividend
payments.  On  various  dates  during fiscal 2001 and 2000, we paid dividends in
kind  of  $26,391 and $574, respectively, in the form of our Common Stock on our
Class  C Preferred Stock that had been converted into our Common Stock. On March
21,  2002, we paid an additional dividend in kind of $2,229, also in the form of
our  Common  Stock,  on our Class C Preferred Stock that had been converted into
our  Common  Stock.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     On  October  3rd,  4th, 5th, 12th, 24th and 29th of 2001, a total of 421.75
shares  of our Class C Preferred Stock together with accrued preferred dividends
thereon  were converted into 282,361 shares of our Common Stock at a discount of
25%  from  the average of the closing bid prices for our Common Stock during the
prior  five  trading  days.

     On  December 13, 2001, we sold 1,000,000 new, unregistered common shares in
a private placement to one individual investor for $50,000.  The transaction was
exempt  from  registration  under  Section  4(2)  of the Securities Act of 1933.
These  unregistered  shares are subject to the resale restrictions imposed under
the  Act.  The  per  share  price  of $.05 represented a 37.5% discount from the
previous  day's closing price of our Common Stock.  (See Management's Discussion
and  Analysis  of  Financial  Condition and Results of Operations: Liquidity and
Capital  Resources).

On  March  21,  2002,  165.75  shares  of Class C Preferred Stock, together with
accrued  dividends,  were converted into a total of 129,235 shares of our Common
Stock.  After  these conversions, 8,777.59 shares of our Class C Preferred Stock
remain  outstanding.



                                                                               6
<PAGE>


ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS  OF  OPERATIONS

     The  following  discussion  and analysis should be read in conjunction with
the  Company's  consolidated  financial  statements  and the notes thereto.  The
discussion  of  results,  causes and trends should not be construed to imply any
conclusion  that such results or trends will necessarily continue in the future.

FORWARD-LOOKING  STATEMENTS

          When  used  in  this  Form 10-KSB and in future filings by the Company
with  the  Securities and Exchange Commission, the words or phrases "will likely
result,",  "management  expects"  or "the Company expects," "will continue," "is
anticipated,"  "estimated"  or  similar  expressions  are  intended  to identify
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange  Act  of  1934,  as  amended.  Readers are cautioned not to place undue
reliance  on any such forward-looking statements, each of which speak only as of
the  date  made.  Such statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results and
those presently anticipated or projected. These risks and uncertainties now also
include those usually associated with international operations particularly when
they  represent  a new endeavor as well as potentially severe disruptions to the
Company's  new  RSAF networking project should the long-standing conflict in the
Middle East worsen, either as a result of the United States led war on terrorism
or  other  causes.  The Company has no obligation to publicly release the result
of any revisions, which may be made to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the date of
such  statements.

SELECTED  FINANCIAL  DATA

<TABLE>

<CAPTION>



                                                                         Year Ended December 31,
                                                                       -------------------------
RESULTS OF OPERATIONS:                                                        2001            2000
                                                                            ------          ------
<S>                                                            <C>                        <C>

Total revenues. . . . . . . . . . . . . . . . . . . . . . . .  $              3,911,503   $ 3,754,520
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . .  $             (1,120,146)  $(2,059,718)
Net loss attributable to common stockholders. . . . . . . . .  $             (1,182,457)  $(2,131,692)
Basic and diluted income (loss) per common share. . . . . . .  $                  (0.01)  $     (0.02)
Weighted average common shares outstanding, giving effect
to the conversion of all Class B Preferred Stock outstanding                 90,937,739    89,290,566

YEAR-END FINANCIAL POSITION:
Working capital deficit . . . . . . . . . . . . . . . . . . .  $             (1,783,683)
Total assets. . . . . . . . . . . . . . . . . . . . . . . . .  $              2,639,300
Total liabilities . . . . . . . . . . . . . . . . . . . . . .  $              2,500,849
Stockholders' equity. . . . . . . . . . . . . . . . . . . . .  $                138,451
</TABLE>

RESULTS  OF  OPERATIONS
-----------------------

YEAR  ENDED  DECEMBER  31,  2001  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  2000

     The  Company's total revenues increased by $153,983, or 4.2%, to $3,911,503
for the year ended December 31, 2001 from $3,757,520 for the year ended December
31,  2000.  This growth in total revenues represents the excess of the growth in
subscription  revenues,  which comprised 54.8% of total revenue in 2001 compared
to  24.6%  in  2000,  over  the  decline  in  all other revenues of the Company.
Subscription service revenue rose by $1,218,749, or 132%, to $2,141,724 for 2001
from  $922,975  one year ago.  Two thirds of this increase was attributable to a
single  customer,  Ultrastar,  for whom the Company provides Private Label ISP's
under  names  they  are  contractually  permitted  to  use, such as David Bowie,
Gaither  and  Hansen.  The balance of the growth in subscription service revenue
was  due  to  an  increase  in  the  number  of subscribers, dedicated users and
partnerships  with  several  community-based  Internet  services.



                                                                               7
<PAGE>



     Ultrastar,  which  comprised  33.6% of the Company's total revenue in 2001,
recently  advised  the  Company  that  they  will likely seek to diversify their
sources  of  Private  Label  ISP's  in 2002.  They have the contractual right to
terminate  their  agreement  with  the  Company  upon  thirty days prior written
notice,  although the Company believes they will continue to use various hosting
Internet  support  services.  The  Company  estimates  the potential decrease in
revenues   from  this  source  diversification  by  Ultrastar  at  approximately
$1,000,000 on an annualized basis.  As the gross profit on the services that may
be  cancelled  averages  approximately 15%, the overall impact on the Company is
expected  to  be manageable, particularly when related savings in administrative
support  are  considered,  both  in  terms  of personnel and occupancy cost; the
Company  has negotiated a termination option for the leased suite that presently
houses  such  support  operations.

     Hardware sales decreased by $543,450, or 32.3%, to $1,137,317 in 2001. This
trend  accelerated  in  the  fourth  quarter  of  2001, reflecting a slowdown in
capital  expenditures by the Company's customers, consistent with the economy as
a  whole,  and  exacerbated by the effects of the terrorist attacks on September
11th.  Hardware sales have always been one of the highest cost components of the
Company's  revenues and the Company does not expect a significant change in this
downward  trend  in the foreseeable future, although the Company has seen recent
indications  of  a  slow  recovery in its domestic networking business, which is
principally with local  school districts.   The Company's  recent  emphasis  has
been on  installation,  maintenance and  consulting  services,  which  are  more
profitable.  Although maintenance and consulting revenues decreased for the year
by  $27,293,  or 8.7%, to $287,523 and installation services fell by $51,589, or
15.8%,  to  $275,227  in  2001,  fourth  quarter  results showed 53.5% and 13.3%
increases in installation and maintenance/consulting revenues, respectively, and
the former reflected only one month's $100,000 billing on the RSAF sub-contract.
Five  further  monthly payments of $100,000 each are scheduled through May 2002,
three  of  which  were  received  in  the  first  quarter  of  2002.

     Private label cd roms decreased by 100.0% from $439,877 for the prior year.
Other  revenues  were  virtually  unchanged,  increasing  by  0.6%  to  $69,712.

     In  October  2001  the  Company  announced it was introducing a new peering
infrastructure  for  its  Internet  Service Provider customers designed to lower
costs  and  increase speed, security and reliability.  The Company received four
initial orders for the new product, which were delivered in a Beta or test phase
mode.  Due  to  the Company's present scarcity of capital resources, significant
revenue  contribution  from  the production and marketing of this new product is
not  anticipated until the latter part of fiscal 2002, at the earliest.  In this
regard,  the  Company  must  also  replace its Manhattan broadband support site,
which  had  been  utilized  under  an arrangement with Enron Corporation.  Enron
closed  the  support  site  in  the  wake  of  its  bankruptcy  filing.

     Cost  of  sales was $2,877,945, representing 73.6% of total revenue for the
year  ended  December  31,  2001,  compared to $2,955,027, representing 78.7% of
total  revenues  for  the  year  ended  December  31,  2000.  Cost  of  sales of
VillageNet  was  $1,877,143,  or 84.9% of related revenues for 2001, compared to
$1,373,624,  or  95.9%,  one year ago, which included the very high cost private
label  cd  rom sales.  Cost of sales of ICS was $1,000,802, or 58.9% of hardware
sales,  installation  services  and  maintenance/consulting for 2001 compared to
$1,581,403,  or  68.1%,  one  year  ago,  the  decline  as  a  percent  of sales
attributable  to  the  reduction  in  the  higher  cost  hardware  sales.

     Selling,  general  and  administrative  expenses  (SG&A) were $1,819,392 in
2001,  a decrease of $656,624, or 26.5%, from $2,476,016 in 2000.  This decrease
was  principally  attributable  to  two  factors:  (i) a decrease in payroll and
related benefits of $283,978, or 20.6%, to $1,095,454 in 2001 from $1,379,432 in
2000; and (ii) a decrease in marketing and newspaper advertising of $246,655, or
88.4%,  to  $32,463 in 2001 from $279,118 in 2000.  This decrease represents the
cancelled  advertising  of  the  Company's Internet franchising program.  Of the
total  SG&A  expenses,  $443,251 is attributable to VillageNet and $1,376,141 is
attributable  to  ICS  for 2001, compared to $1,076,421 and $1,399,595, one year
ago.  As  a  percentage  of sales, SG&A expenses were 46.5% in 2001 and 65.9% in
2000.

     Amortization  of  goodwill  was  $237,392  in  each  of 2001  and 2000.  In
Accordance with  Statement  of  Financial  Accounting  Standards  No. 142 ("SFAS
No. 142"), effective  January  1,  2002,  goodwill is  no longer  systematically
amortized to operations,  but is subject to periodic tests for impairment.  (See
Note 2S to the consolidated  financial  statements).   SFAS  No.  142 prescribes
a  two-step  impairment  test,  the  first  step  to   determine  the  existence
of  impairment  and  the  second,  if  applicable,   to  measure  the impairment
amount.  These  steps must be completed  in  the first  six and  twelve  months,
respectively, of fiscal 2002, with any impairment losses reflected retroactively
to the first quarter  of  2002.




                                                                               8
<PAGE>

        Interest expense was $96,920 in 2001, an increase of  $35,417, or 57.6%,
from  $61,503  in  2000.  The  increase  was  attributable to the higher average
amount outstanding on the Company's loans payable to related parties, as well as
certain  late  payment finance charges incurred on the Company's trade payables.
Reported  interest  expense  on related party loans includes interest imputed to
reflect  a  fair  interest rate on certain non-interest bearing and below market
rate  loans.  (See  Note  6  to  the  consolidated  financial  statements).

        Settlements of  $55,900 with discontinued bagel franchisees in  2000 did
not recur.

          Pre-tax  loss  for  the  year  ended  December 31, 2001 was $1,120,146
compared to a pre-tax loss of $2,031,318 for the year ended December 31, 2000, a
decrease  of  $911,172,  or 44.9%.  The decrease in the current year loss is due
primarily  to two related factors: (i) the significant decrease in SG&A expenses
as  a  percentage  of  gross margin, which fell by 133.7% to 176.0% in 2001 from
309.7%  in 2000; and (ii) the gross margin percentage increased by 5.1% to 26.4%
in  2001  compared  to  21.3%  in  2000.

          The  provision for income taxes decreased by $28,400, or 100%, to zero
in  2001.  The expense in 2000 was wholly attributable to deferred income taxes.
The Company has tax loss carryforwards of approximately $3,100,000, available to
offset  future  taxable  income  through  2021.  The Company has provided a 100%
valuation  allowance  against  its  net deferred tax assets as their prospective
realization  does  not  meet  the  more  likely  than  not  criterion  required.

          As a result of the foregoing, net loss declined by $939,572, or 45.6%,
to  $1,120,146  in  2001  from  $2,059,718  in  2000.  As  a percentage of total
revenues,  net  loss  fell  by  26.3%  to  28.6%  from  54.9%.

         Preferred stock dividends paid in-kind and accrued decreased by $9,663,
or  13.4%,  to $62,311 in 2001 from $71,974 in 2000.  Dividends on the Company's
Class  C  Preferred  Stock  are  paid only in-kind, in the form of shares of the
Company's  Common  Stock only when such preferred stock is converted into Common
Stock.  Dividends at the rate of 6% accrue on the preferred stock until they are
tendered  for conversion.  Net loss attributable to common shares, on which loss
per  share  is based, declined by $949,235, or 44.5%, to $1,182,457 in 2001 from
$2,131,692  in  2000.

          Loss  per  share  declined  by $.01 to $.01 in 2001 from $.02 in 2000.
Loss  per share gives effect to the conversion of all 508,152 outstanding shares
of  Class  B  Preferred  Stock.  Such  shares,  which  bear  no  dividends,  are
convertible  at  the  rate  of  138  to one into a total of 70,124,976 shares of
Common  Stock.

LIQUIDITY  AND  CAPITAL  RESOURCES

          Cash  at  December  31,  2001,  all of which is maintained at the same
bank,  was  $91,064  compared  to  $271,032  at December 31, 2000, a decrease of
$179,968.  This  decrease  in  cash was primarily attributable to the funding of
the  Company's  net  loss.  At  various dates during the months of May, June and
July,  the  Company began to incur intra-month overdrafts at two of its checking
accounts maintained at its bank, although such overdrafts did not exceed amounts
of  positive  balances maintained at other accounts with the same bank.  However
in  August,  September,  October  and November of 2001, net combined intra-month
overdrafts  were  incurred,  the highest of which, $64,106, occurred in October.
The  last of such intra-month net overdrafts occurred in November.  All checking
accounts  had positive balances at December 31, 2001.  The Company has asked the
bank  for  a $100,000 increase in its line of credit, which request is presently
pending.  The  Company  viewed  the  allowed  overdrafts as an indication of the
bank's  willingness  to  work  with  it  during  the  pendency  of the requested
increase,  given  the  Company's  and  its  other  affiliates' long and positive
relationship  with this bank.  However no assurances can be given as to a formal
approval for the increase in the line of credit or the continued availability or
amount  of allowed overdrafts, should the Company need them again in the future.
Although  still  tight, the Company's cash position has eased somewhat recently,
as  it began to receive the monthly $100,000 RSAF contract related payments from
AID,  one  of which was received in December and three more in the first quarter
of fiscal 2002.  Two further payments are scheduled for April and May of 2002 to
complete  the  initial  sub-contract;  additional  contracts  are  expected.

          Accounts  receivable  decreased  by  $4,463 to $403,569 at December 31
2001  from  $408,032 at December 31, 2000.  The Company continued to improve its
accounts  receivable  turnover  ratio  as  the number of days' sales outstanding
decreased  by  two  full  days  to  37.7  days  in  2001 from 39.7 days in 2000.




                                                                               9
<PAGE>

          Inventory  decreased  by  $24,806 to $25,066 at December 31, 2001 from
$49,872  at December 31, 2000.  The decrease in inventory is directly related to
a decrease in hardware inventory purchases due to the slowdown in hardware sales
since  March  2001.  Prepaid  expenses  and  other  current  assets increased by
$28,791  to  $90,147  at  December  31,  2001 from $61,356 at December 31, 2000,
primarily  due  to  an  increase  in  prepaid  insurance.

          Accounts payable and accrued expenses increased by $50,338 to $841,856
at  December  31,  2001  from  $791,518  at  December 31, 2000, primarily due to
overall increases in revenues and the attendant cost of sales during the period.

          Notes payable increased to $192,718 at December 31, 2001 from $125,000
at  December  31,  2000,  reflecting  additional  net  borrowings  of   $67,718.
Borrowings  under  the line, which has been extended until May 31, 2002, may not
presently exceed $200,000.  The Company's request for a $100,000 increase in the
line  is  pending.

          Loans  payable to related parties increased by $376,833 to $957,091 at
December  31,  2001  from  $580,258  at  December  31,  2000.  The  increase  is
attributable  to  actual  additional borrowings of $10,000 in the first quarter,
$107,144  in  the second quarter, $220,000 in the third quarter and $20,979, net
of  a  $70,000  repayment  in the fourth quarter, as well as $18,710 of interest
accrued  during  the  year.  A  portion  of the third quarter loans amounting to
$40,000  was  advanced from AID, the related company for whom the Company is the
sub-contractor  on  the  RSAF  project.  All of the $220,000 borrowed during the
third  quarter  is  repayable  on  demand.  Repayment  of  the  balance  of  the
outstanding  related party loans and advances totaling $737,091 is due August 1,
2002.  Accordingly,  all  such  related  party  loans  are  a current liability.

          At  December  31,  2001,  the Company had a working capital deficit of
$1,783,683  and  an  extremely  tight cash position, which eased somewhat in the
first  quarter  of  fiscal 2002 as discussed above. The Company has successfully
reduced  various  costs  and  its net loss for the fourth quarter comprised only
approximately  one-eighth of its fiscal 2001 net loss.  Over the last two years,
the  Company  has  been  largely dependent on related party loans to finance its
operations.  Such  loans  total  $957,091 at December 31, 2001 and are due on or
before  August  1,  2002.  The  Company  is optimistic that once additional RSAF
sub-contracts are awarded and increased long-term cash inflows become reasonably
certain,  the  Company will negotiate a feasible long-term repayment schedule of
its  related  party  debt.  Such  debt restructuring, coupled with the attendant
forecasted  profitability,  which  should  accompany the continued international
expansion  of its business, will lead to the long-term viability of the Company.
Management  believes  it  will  be  successful  in  these  endeavors; however no
assurances  can  be  given  in  this  regard.  As  a result, continuation of the
Company  as  a  going  concern  is  presently  in  question.

          Operating activities used cash of $656,416 for the year ended December
31,  2001  compared  to  $882,825  used  for  the same period one year ago.  The
current  period  use of cash was principally to fund the net loss of $1,120,146.
Non-cash  items totaled $364,354 in 2001, of which depreciation and amortization
comprised  $313,340,  compared  to  total  non-cash  items  of $619,091 in 2000,
including   depreciation  and   amortization  of   $320,427,  with  the  balance
principally  consisting  of stock issued to satisfy certain expense obligations.
Working  capital elements provided cash of $99,376 in 2001 and $557,802 in 2000,
net  of  payment  of  liabilities  associated  with  discontinued  operations of
$549,989.

          For  the  year  ended December 31, 2001, investing activities provided
$604  compared  to  cash used of $70,317 one year ago.  Substantially all of the
change  was  due  to  decreased  capital  expenditures  in  2001.

          Financing  activities  provided  cash of $475,844 in 2001, compared to
$423,613  in  2000.  The  Company  borrowed  $67,718 under the bank line in 2001
while related company advances provided $358,126.  In December 2001, the Company
sold  1,000,000  new unregistered shares in a private placement to one unrelated
investor for $50,000.  Although the negotiated per share price of $.05 reflected
a  discount  of  37.5% from the previous trading day's closing price, management
proceeded  with  the  transaction as it then represented a critical cash inflow,
with  no  associated capital raising cost other than incidental legal fees.  The
Company  does  not  rule  out  additional  limited private placements, also with
significant  discounts,   should  they  become  available  from  time  to  time.

          In  March  of  2001,  the  Company  issued options to purchase 100,000
shares  of  stock,  exercisable  at  $.01 per share, to an executive officer and
recorded  compensation expense of $10,000, equal to the excess of the fair value
of the underlying shares at date of grant over such exercise price.  On June 29,
2001,  this  officer  resigned  his  position  with  the Company, although he is
available  to consult with the Company on certain matters on an as-needed basis.



                                                                              10
<PAGE>

          On September 26, 2001, the Company's board of directors approved, from
the  1998 Performance Equity Plan, the outright grant of 75,000 common shares in
payment  of $7,500 of accrued consulting fees.  The average closing price of the
Company's  common stock for the last five days the stock traded in September was
$.10  per share.  This grant reduced to 100,000 the availability of shares under
the 1998 Plan.  (See Notes 9B and 11A to the Consolidated Financial Statements).

          As  a  means  to  conserve cash, management of the Company anticipates
granting  the  remaining  shares  under the 1998 Plan in satisfaction of certain
current expense obligations.  The valuation of such shares would be based on the
current  quoted  price  of  the  Company's  Common  Stock.

          Management  of  the  Company has recommended to the board of directors
that  it  consider adopting a 2002 Stock Option Plan to provide, at no cash cost
to  the  Company,  an  equity compensation incentive to employees, directors and
consultants.  As  proposed by management, the plan would be for 1,000,000 shares
and  would  encompass  qualifying and non-qualifying options as well as outright
share  grants  and  certain other common equity equivalents.  If approved by the
board,  the  Company would present the new plan to its stockholders for approval
in  its  next  proxy  statement.


ITEM  7.  FINANCIAL  STATEMENTS

The  financial  statements and notes thereto are included herewith commencing on
page  16.





                                                                              11
<PAGE>

                                    PART III
                                    --------

ITEM  9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

     The following table sets forth certain information regarding the members of
our  board  of  directors  and  executive  officers:
Name                        Age            Position
----                        ---            --------

Peter  J.  Keenan           32             Chairman  of the Board  and President

Edilberto  R.  Enriquez     42             Treasurer and Chief Financial Officer

David  A.  Levi             26             Secretary  and  Director

Hector  M.  Gavilla         58             Director

Moshe  Schwartz             32             Director

Dr.  Steven  Levi           32             Director

DIRECTORS

     Peter  J.  Keenan  has  served  as President of our Company, as well as the
President  of  ICS,  since  the  merger in July 1999.  From October 1994 to June
1996, Mr. Keenan was technical director of ICS.  Since 1995, Mr. Keenan has also
served as technical director of VillageNet. From September 1991 to October 1994,
Mr.  Keenan  was  employed  by Advanced Testing Technologies, Inc. ("ATTI") as a
purchasing  agent.

     David  A.  Levi has been a director of our Company since October 1999.  Mr.
Levi commenced medical school in August 1999.  From January 1997 to August 1999,
Mr.  Levi  served  as a purchasing agent for ATTI.  Since May 1998, Mr. Levi has
served  as  President  of ICS Systems, Inc. ("ICS Systems"), a computer software
company  specializing  in operating systems and electronic drivers for automatic
test  equipment.  From 1994 to 1997, Mr. Levi was a student at the University of
Michigan  where  he  received  a  degree  in  history.

     Hector  M. Gavilla has served as a director of our Company since the merger
in  July  1999, and served as President of ATTI since 1998. He is also currently
serving as the CEO of ATTI.  Since 1994, Mr. Gavilla has been Vice President and
Secretary  of  each of ICS and VillageNet and has served as an executive officer
of  the  following  companies:  European Testing Technologies, Ltd., ATTI Europe
bv,  ATTI  International Development, Inc., Automated Computer Systems, Inc. and
ICS  Systems.

     Moshe  Schwartz  has  been a director of our Company since March 2000.  Mr.
Schwartz  is  currently an independent investment banking consultant.  From July
1998  through  February  2000,  he  served  as  a  Vice President at KCSA Public
Relations.  Mr.  Schwartz  received  his J.D. in 1995 from the Cardozo School of
Law  and  from  1995  through  1998  was an Assistant District Attorney in Kings
County,  New  York.

     Dr.  Steven  Levi has been a director of our Company since March 2000.  Dr.
Levi  received  his  M.D.  in 1995 from Pittsburgh University and is currently a
practicing  physician  in  the  field of internal medicine at Jefferson Memorial
Hospital  in  Philadelphia,  PA.  From  1995  to  1998,  Dr.  Levi served as the
director  of new development for ICS Systems.  David A. Levi and Dr. Steven Levi
are  brothers.





                                                                              12
<PAGE>

     Our  board  of directors is elected at each annual meeting of shareholders.
Each  director holds office until his successor is duly elected and qualified or
until his or her earlier resignation or removal.  In March 1996, our predecessor
adopted  a  1996 Performance Equity Plan, which provides, in part, that on March
31  of  each  calendar  year  such  plan is in effect, each of our directors are
automatically  awarded ten-year options to purchase 2,000 shares of common stock
at  an exercise price which is the fair market value of our common stock on such
March  31.  All  of  such  options are immediately exercisable as of the date of
grant.  Other than the foregoing, our directors do not receive any fees or other
compensation  in  connection  with  their  services  as  directors.

EXECUTIVE  OFFICERS

     Officers  are elected annually by the Board of Directors and serve at their
direction.  Two  of  our  executive officers, Peter J. Keenan and David A. Levi,
are  also directors.  Information with regard to such persons is set forth above
under  the  heading  "Directors."  Robert Appel, previously one of our executive
officers, resigned in June of 2001. The remaining executive officer is Edilberto
R.  Enriquez,  Treasurer  and  Chief  Financial  Officer.

     Edilberto  R.  Enriquez  has  been  employed  as  our  Treasurer  and Chief
Financial  Officer since the merger in July 1999 and served as the controller of
ICS  since  March  1999.  From  December  1997  to  March 1999, Mr. Enriquez was
employed  as an accounting manager for IHC Services, Inc., an exporting company.
From 1991 to October 1997, Mr. Enriquez was a senior accountant at Linotype-Hell
Company,  a  manufacturing  company.  Effective  February 11, 2002, Mr. Enriquez
commenced full-time employment with an unrelated company.  He continues to serve
as  the  Company's  Treasurer  and Chief Financial Officer on a part-time basis.

COMMITTEES

     The  Board  of  Directors does not have a Compensation, Audit or Nominating
Committee,  and  the  usual  functions  of  such committees are performed by the
entire  Board  of  Directors.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCES

     Each of Peter J. Keenan, Hector M. Gavilla, David A. Levi, Dr. Steven Levi,
Moshe  Schwartz  and  Robert Appel failed to file one Form 5 with respect to one
transaction  each  in  fiscal  2001.  All  of  the  foregoing  individuals  were
officers,  directors  and/or  beneficial  owners  of more than 10% of our common
stock  during  2001.  Mr.  Appel  resigned in June of 2001. For each of the five
directors,  the  transaction  not reported by them was the annual grant of 2,000
options  under our 1996 Performance Equity Plan.  The transaction with Mr. Appel
was the modification of a previous option grant.  Although not reported by these
individuals,  we  reported all of these transactions in our Form 10-KSB for 2000
and  again  in our Form 10-QSB for the first quarter of fiscal 2001.  Other than
the  foregoing,  to  the  best  of  our  knowledge,  all other Forms 3, 4, and 5
required  to be filed during the year ended December 31, 2001 were timely filed.

ITEM  10.  EXECUTIVE  COMPENSATION

     Information   required  by  Item  10,   Part   III,   regarding   Executive
Compensation,  is  included  in  our Proxy Statement relating to our 2002 annual
meeting  of  stockholders,  and  is  incorporated  herein  by  reference.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     Information  required by Item 11, Part III, regarding Security Ownership of
Certain  Beneficial  Owners  and  Management, is included in our Proxy Statement
relating  to our 2002 annual meeting of stockholders, and is incorporated herein
by  reference.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Information  required by Item 12, Part III, regarding Certain Relationships
and  Related  Transactions,  is  included in our Proxy Statement relating to our
2002  annual  meeting  of stockholders, and is incorporated herein by reference.




                                                                              13
<PAGE>


ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(A)     Exhibits

Exhibit
Number
------

3.1     Restated  Certificate  of  Incorporation  (1)
3.2     Amendment  No.  1  to  Certificate  of  Incorporation  (2)
3.3     Amendment  No.  2  to  Certificate  of  Incorporation  (2)
3.4     Bylaws  of  the  Company  (3)
10.1    Agreement by and between the Company and Ultrastar Internet Services,
        LLC  (4)
10.2    Employment  Agreement  by  and between the Company and Peter Keenan (4)
10.3    1996  Performance  Equity  Plan  (1)
10.4    1998  Performance  Equity  Plan  (5)
10.5    Lease  Agreement by and between ICS and Fortunato Development, Inc. for
        the  lease  of  Suite 1A located at  620 Johnson Avenue,  Bohemia,  New
        York (6)
21      Subsidiaries  of  the  Company  (*)
____________

(*)     Filed  herewith

(1)     Filed as an exhibit to the Company's Registration Statement on Form SB-2
(No.  333-2154),  declared  effective  by  the  Commission  on  May  7, 1996 and
incorporated  herein  by  reference.

(2)     Filed as an exhibit to the Company's Form 8-K, filed with the Commission
on  December  30,  1999  and  incorporated  herein  by  reference.

(3)     Filed  as  an  exhibit  to the Company's Form 10-KSB for the fiscal year
ended  December  31,  1998,  filed  with  the  Commission  on March 31, 1999 and
incorporated  herein  by  reference.

(4)     Filed  as  an  exhibit  to the Company's Form 10-KSB for the fiscal year
ended  December  31,  1999,  filed  with  the  Commission  on March 31, 2000 and
incorporated  herein  by  reference.

(5)     Filed  as  an  exhibit  to  the Company's Form S-8 (Reg. No. 333-80373),
filed with the Commission on June 10, 1999 and incorporated herein by reference.

(6)     Filed  as  an  exhibit  to the Company's Form 10-KSB for the fiscal year
ended  December  31,  2000,  filed  with  the  Commission  on April 2, 2001  and
incorporated  herein  by  reference.


     (B)     Reports  on  Form  8-K

None




                                                                              14
<PAGE>


                                   SIGNATURES



     In  accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has  duly  caused  this  report  to  be signed on its behalf by the undersigned,
thereunto  duly  authorized.


                            VILLAGEWORLD.COM,  INC.
                            -----------------------


     Dated:    March  29,  2002
                                                 By:/s/  Peter  Keenan
                                                    ------------------
                                                  Peter  Keenan, Chairman of
                                                  the  Board  and  President


In accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed  below  by  the  following  persons  on  behalf  of the registrant and in
capabilities  and  on  the  dates  indicated.


<TABLE>
<CAPTION>

<S>                               <C>                                   <C>
         /s/Peter Keenan . . . .  Chairman of the Board and President
    ---------------------
    Peter Keenan. . . . . . .    (Principal Executive Officer)    March 29, 2002


         /s/Edilberto Enriquez .  Treasurer and Chief Financial
     -------------------------
     Edilberto Enriquez. . . .    Officer (Principal Financial
                                  and Accounting Officer)         March 29, 2002


         /s/David Levi . . . . .  Secretary and Director          March 29, 2002
      --------------------
      David Levi


         /s/Hector M. Gavilla. .  Director                        March 29, 2002
      ------------------------
      Hector M. Gavilla


         /s/ Moshe Schwartz. . .  Director                        March 29, 2002
      ----------------------
       Moshe Schwartz



         /s/ Dr. Steven Levi . .  Director                        March 29, 2002
      ----------------------
       Dr. Steven Levi
</TABLE>




                                                                              15
<PAGE>


<TABLE>
<CAPTION>




                  VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<S>                                                                  <C>
Index to Consolidated Financial Statements

Independent Auditors' Report. . . . . . . . . . . . . . . . . . . .       17

Consolidated Balance Sheet as of December 31, 2001. . . . . . . . .       18

Consolidated Statements of Operations for the years ended
  December 31, 2001 and 2000. . . . . . . . . . . . . . . . . . . .       19

Consolidated Statements of Stockholders' Equity for the years ended
  December 31, 2001 . . . . . . . . . . . . . . . . . . . . . . . .  20 - 21

Consolidated  Statements of Cash Flows for the years ended
  December 31, 2001 and 2000. . . . . . . . . . . . . . . . . . . .  22 - 23

Notes to Consolidated Financial Statements. . . . . . . . . . . . .  24 - 36
</TABLE>




                                                                              16
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


Board  of  Directors
VillageWorld.com,  Inc.
Bohemia,  New  York


     We   have   audited   the  accompanying   consolidated   balance  sheet  of
VillageWorld.com,  Inc. and Subsidiaries as of December 31, 2001 and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
each  of  the  years  in  the  two-year  period  then ended.  These consolidated
financial  statements  are  the responsibility of the Company's management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

     We  conducted  our  audits  in accordance with auditing standards generally
accepted  in the United States of America.  Those standards require that we plan
and  perform  our  audits  to  obtain  reasonable  assurance  about  whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

     In  our  opinion,  the  consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
VillageWorld.com,  Inc. and Subsidiaries as of December 31, 2001 and the results
of  its  operations  and  its  cash  flows for each of the years in the two-year
period then ended in conformity with accounting principles generally accepted in
the  United  States  of  America.

     The  accompanying financial statements have been prepared on the basis of a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.  As set forth in such financial
statements  and  further discussed in Note 1B thereto, the Company has sustained
significant  losses  from  operations during the last two years and has a severe
cash shortage and working capital deficit with current liabilities approximately
four times the amount of its current assets at December 31, 2001.  These matters
raise  substantial  doubt  about  the  Company's  ability to continue as a going
concern.  Management's  plans  in  regard to these matters are also described in
Note  1B.  The  consolidated financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.

/s/  Laurence  Rothblatt  &  Company
Great  Neck,  New  York
March  29,  2002




                                                                              17
<PAGE>

<TABLE>
<CAPTION>


                             VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEET


                                                         December 31, 2001
ASSETS
<S>                                                     <C>
Current Assets:
Cash                     . . . . . . . . . . . . . . .  $           91,064
Accounts receivable, net of allowance for
 uncollectibles. . . . . . . . . . . . . . . . . . . .             403,569
Inventory. . . . . . . . . . . . . . . . . . . . . . .              25,066
Prepaid expenses and other current assets. . . . . . .              90,147
                                                        -------------------
  Total Current Assets . . . . . . . . . . . . . . . .             609,846

Fixed assets, net of accumulated depreciation. . . . .             227,504
Goodwill, net of accumulated amortization. . . . . . .           1,780,443
Other assets . . . . . . . . . . . . . . . . . . . . .              21,507
                                                        -------------------
  TOTAL. . . . . . . . . . . . . . . . . . . . . . . .  $        2,639,300
                                                        ===================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank. . . . . . . . . . . . . . . . . .  $          192,718
Accounts payable and accrued expenses. . . . . . . . .             841,856
Commissions payable. . . . . . . . . . . . . . . . . .             183,188
Deferred income. . . . . . . . . . . . . . . . . . . .             218,676
Loans payable, related parties . . . . . . . . . . . .             957,091
                                                        -------------------
  Total Current Liabilities. . . . . . . . . . . . . .           2,393,529

Accrued cumulative preferred stock dividends . . . . .             107,320
                                                        -------------------
  Total Liabilities. . . . . . . . . . . . . . . . . .           2,500,849
                                                        -------------------

Commitments and Contingencies. . . . . . . . . . . . .                   -
                                                        -------------------

Stockholders'  Equity:
Convertible Class B preferred stock; $.001 par
 value; 1,000,000 shares authorized; 508,152
 shares issued and outstanding. . . . . . . . . . . . .                508
Convertible Class C preferred stock; $.001 par value,
 non-voting; redeemable at $125; 25,000 shares
 authorized; 8,943 and 11,900 shares outstanding,
 respectively . . . . . . . . . . . . . . . . . . . . .                  9
Common stock; $.001 par value; 200,000,000
 shares authorized; 23,481,030 and 19,520,236
 shares issued, respectively. . . . . . . . . . . . . .             23,481
Additional paid in capital . . . . . . . . . . . . . .           5,947,786
Accumulated deficit. . . . . . . . . . . . . . . . . .          (5,765,189)
Stock subscription receivable. . . . . . . . . . . . .              (3,520)
Treasury stock (65,279 shares at cost) . . . . . . . .             (64,624)
                                                        -------------------
  Total stockholders' equity . . . . . . . . . . . . .             138,451
                                                        -------------------

  TOTAL. . . . . . . . . . . . . . . . . . . . . . . .  $        2,639,300
                                                        ===================
                                                                         -

<FN>
The accompanying notes are an integral part of the financial statements.


</TABLE>

                                                                              18
<PAGE>

<TABLE>
<CAPTION>

                        VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS


                                                            Year Ended
                                               December 31, 2001    December 31, 2000
                                               -----------------    -----------------

<S>                                           <C>                  <C>
REVENUES:
Subscription services. . . . . . . . . . . .  $        2,141,724   $          922,975
Hardware sales . . . . . . . . . . . . . . .           1,137,317            1,680,767
Maintenance and consulting . . . . . . . . .             287,523              314,816
Installation services. . . . . . . . . . . .             275,227              326,816
Private label cd roms. . . . . . . . . . . .                   -              439,877
Other revenues . . . . . . . . . . . . . . .              69,712               69,269
                                              -------------------  -------------------
  Total revenues . . . . . . . . . . . . . .           3,911,503            3,754,520
                                              -------------------  -------------------

COSTS AND EXPENSES:
Cost of sales. . . . . . . . . . . . . . . .           2,877,945            2,955,027
Selling, general and administrative. . . . .           1,819,392            2,476,016
Amortization of excess of cost over. . . . .             237,392              237,392
fair value of net assets acquired
Interest expense . . . . . . . . . . . . . .              96,920               61,503
Settlements with discontinued franchisees. .                   -               55,900
                                              -------------------  -------------------
  Total costs and expenses . . . . . . . . .           5,031,649            5,785,838
                                              -------------------  -------------------

Pre-tax loss . . . . . . . . . . . . . . . .          (1,120,146)          (2,031,318)

Provision for income taxes . . . . . . . . .                   -               28,400
                                              -------------------  -------------------

Net loss . . . . . . . . . . . . . . . . . .          (1,120,146)          (2,059,718)

Preferred stock dividends paid in-kind
 and accrued. . . . . . . . . . . . . . . . .             62,311               71,974
                                              -------------------  -------------------

Net loss attributable to common stockholders  $       (1,182,457)  $       (2,131,692)
                                              ===================  ===================

Basic and diluted net loss per common share.  $            (0.01)  $            (0.02)
                                              ===================  ===================

Basic and diluted weighted average common
 shares outstanding, giving effect to the
 conversion to common stock of all Class B
 Preferred Stock outstanding. . . . . . . . .         90,937,739           89,290,566
                                              ===================  ===================
<FN>
The accompanying notes are an integral part of the financial statements.


</TABLE>


                                                                              19
<PAGE>
<TABLE>
<CAPTION>

                                      VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   For the Twelve Months Ended December 31, 2001


                                                Class B                        Class C
                                             Preferred Stock                Preferred Stock      Common Stock
                                   ----------------  -----------------  ------------
                                        Shares            Amount           Shares     Amount     Shares    Amount
                                   ----------------  -----------------  ------------  -------  ----------  -------
<S>                                <C>               <C>                <C>           <C>      <C>         <C>
Balance, January 1, 2001. . . . .          508,152   $            508         11,900  $    12  19,520,236  $19,520

Conversion of preferred
 shares  (first quarter) . . . . .                                             (385)              402,383      403

Conversion of preferred
 shares (second quarter) . . . . .                                           (1,780)      (2)   1,707,114    1,707

Conversion of preferred
 shares  (third quarter) . . . . .                                             (370)      (1)     393,936      394

Conversion of preferred
 shares  (fourth quarter). . . . .                                             (422)       -      282,361      282

Shares issued for executive
 compensation. . . . . . . . . . .                                                                100,000      100

Shares issued for services. . . .                                                                  75,000       75

Shares sold in private placement.                                                               1,000,000    1,000

Accrued  cumulative dividends
 on preferred stock

Capital contribution imputed
 for interest expense

Net loss. . . . . . . . . . . . .                -                  -              -        -           -        -
                                   ----------------  -----------------  ------------  -------  ----------  -------

Balance, December 31, 2001. . . .          508,152   $            508          8,943  $     9  23,481,030  $23,481
                                   ================  =================  ============  =======  ==========  =======

                                                 -                  -              -        -           -        -
</TABLE>


<TABLE>
<CAPTION>


                                  Additional                    Stock                                        Total
                                   Paid-In    Accumulated     Subscription       Treasury Stock           Stockholders'
                                                                                ----------------
                                   Capital      Deficit        Receivable       Shares        Amount        Equity
                                 ----------  -----------   ----------------  -----------     --------      --------
<S>                                <C>         <C>          <C>                <C>              <C>       <C>
Balance, January 1, 2001. . . .  $ 5,823,339   $ (4,582,732)  $    (2,520)      (65,279)  $   (64,624)    $ 1,193,503

Conversion of preferred
 shares  (first quarter) . . . . .     2,123           (215)                                                    2,311

Conversion of preferred
 shares (second quarter) . . . . .    13,812         (2,167)                                                   13,350

Conversion of preferred
 shares  (third quarter) . . . . .     3,169           (234)                                                    3,328

Conversion of preferred
 shares  (fourth quarter). . . . .     4,504           (179)                                                    4,607

Shares issued for executive
 compensation. . . . . . . . . . .    10,900                       (1,000)                                     10,000

Shares issued for services. . . .      7,425                                                                    7,500

Shares sold in private placement.     49,000                                                                   50,000

Accrued  cumulative dividends
 on preferred stock. . . . . . . .                  (59,516)                                                  (59,516)

Capital contribution imputed
 for interest expense. . . . . . .    33,514                                                                   33,514

Net loss. . . . . . . . . . . . .          -     (1,120,146)            -             -             -      (1,120,146)
                                   ----------  -------------  ------------  ------------  ------------    ------------

Balance, December 31, 2001. . .  $ 5,947,786   $ (5,765,189)  $    (3,520)      (65,279)  $   (64,624)    $   138,451
                                 ===========   =============  ============  ============  ============    ============

                                           -              -             -             -             -               -
<FN>
The accompanying notes are an integral part of the financial statements.


</TABLE>


                                                                              20
<PAGE>

<TABLE>
<CAPTION>

                                     VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                       For the Year Ended December 31, 2000


                                              Class B                         Class C
                                          Preferred Stock                  Preferred Stock          Common Stock
                                         ----------------                 -----------------         ------------
                                       Shares            Amount           Shares     Amount        Shares    Amount
                                  ----------------  -----------------  ------------  -------     --------   -------
<S>                               <C>               <C>                <C>           <C>       <C>          <C>
Balance, January 1, 2000 . . . .          508,152   $        508         15,800  $    16       17,403,338   $17,403

Shares issued to satisfy
 accrued professional fees. . . .                                                                  11,111        11

Shares issued for
 promotional services . . . . . .                                                                 152,000       152

Shares issued for
 franchise settlements. . . . . .                                                                 160,000       160

Preferred stock converted
 to common stock. . . . . . . . .                                        (3,900)      (4)       1,018,650     1,019

Shares issued in payment
 of dividends on converted
 Class C preferred stock. . . . .                                                                   1,470         1

Shares issued for cash net
 of $10,000 private placement fee                                                                 666,667       667

Shares issued upon
 exercise of option . . . . . . .                                                                   7,000         7

Shares issued for
 executive compensation . . . . .                                                                 100,000       100

Accrued  cumulative dividends
 on preferred stock

Capital contribution imputed
 for interest expense

Net loss . . . . . . . . . . . .                -              -              -        -                -         -
                                  ----------------  ------------     ----------  -------      ------------  --------

Balance, December 31, 2000 . . .          508,152   $        508         11,900  $    12       19,520,236   $19,520
                                  ================  =============    ==========    =======    ============  ========

                                                -              -              -        -                -         -

</TABLE>


<TABLE>
<CAPTION>


                                   Additional                       Stock                                     Total
                                    Paid-In      Accumulated    Subscription        Treasury Stock       Stockholder's
                                                                                    ---------------
                                    Capital        Deficit       Receivable        Shares      Amount        Equity
                                  ------------  -------------  --------------     -------- -----------    ------------
<S>                               <C>           <C>            <C>             <C>              <C>              <C>
Balance, January 1, 2000 . . . .  $ 4,980,790   $ (2,451,040)  $         -        (65,279)  $   (64,624)   $ 2,483,053

Shares issued to satisfy
 accrued professional fees. . . .       9,989                                                                   10,000

Shares issued for
 promotional services . . . . . .      94,848                       (1,520)                                     93,480

Shares issued for
 franchise settlements. . . . . .      71,240                                                                   71,400

Preferred stock converted
 to common stock. . . . . . . . .      (1,015)                                                                       -

Shares issued in payment
 of dividends on converted
 Class C preferred stock. . . . .         573           (574)                                                        -

Shares issued for cash net
 of $10,000 private placement fee     489,333                                                                  490,000

Shares issued upon
 exercise of option . . . . . . .       6,868                                                                    6,875

Shares issued for
 executive compensation . . . . .     138,400                       (1,000)                                    137,500

Accrued  cumulative dividends
 on preferred stock . . . . . . .     (71,400)                                                                 (71,400)

Capital contribution imputed
 for interest expense . . . . . .      32,313                                                                   32,313

Net loss . . . . . . . . . . . .            -     (2,059,718)            -              -             -     (2,059,718)
                                  ------------  -------------  -------------  ------------  ---------------  ----------

Balance, December 31, 2000 . . .  $ 5,823,339   $ (4,582,732)  $    (2,520)       (65,279)  $   (64,624)  $  1,193,503
                                  ============  =============  ============  = ============  ============  ============

                                            -              -             -              -             -              -

<FN>
The accompanying notes are an integral part of the financial statements.

</TABLE>


                                                                              21
<PAGE>

<TABLE>
<CAPTION>

                                       VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                      Years Ended December 31,
                                                                                        2001                  2000
                                                                                      ---------             ---------
<S>                                                                          <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $       (1,120,146)  $(2,059,718)
                                                                                    -------------------  ------------
Adjustments to reconcile net loss to net cash used by operating activities:
  Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .                    313,340       320,427
  Stock issued for executive compensation . . . . . . . . . . . . . . . . .                     10,000       137,500
  Stock issued for services . . . . . . . . . . . . . . . . . . . . . . . .                      7,500        93,480
  Stock issued in franchise settlement. . . . . . . . . . . . . . . . . . .                          -         5,900
  Interest expense accrued and imputed on related party loans . . . . . . .                     52,221        42,948
  Gain on disposal of fixed assets, net . . . . . . . . . . . . . . . . . .                          -         1,071
  Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . .                               -        28,400
  Decrease (increase) in:
      Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .                      4,463        86,788
      Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     24,806        46,919
      Current assets attributable to discontinued operations. . . . . . . .                          -        21,891
      Refundable income taxes . . . . . . . . . . . . . . . . . . . . . . .                          -       126,000
      Prepaid expenses and other current assets . . . . . . . . . . . . . .                    (28,791)       67,738
      Other assets attributable to discontinued operations. . . . . . . . .                          -       101,371
  Increase (decrease) in:
      Accounts payable and accrued expenses . . . . . . . . . . . . . . . .                     50,338       323,958
      Commissions payable . . . . . . . . . . . . . . . . . . . . . . . . .                     11,581       171,607
      Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . .                     18,272       150,884
      Current liabilities attributable to discontinued operations . . . . .                          -      (549,989)
                                                                             --------------------------  ------------
  Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    463,730     1,176,893
                                                                             --------------------------  ------------
  Net cash used by operating activities . . . . . . . . . . . . . . . . . .                   (656,416)     (882,825)
                                                                             --------------------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of fixed assets. . . . . . . . . . . . . . . . . . . . . . . . .                          -       (68,615)
  Proceeds from sale of fixed assets. . . . . . . . . . . . . . . . . . . .                          -         6,500
  Decrease (increase) in other assets . . . . . . . . . . . . . . . . . . .                        604        (8,202)
                                                                             --------------------------  ------------
Net cash provided (used) by investing activities. . . . . . . . . . . . . .                        604       (70,317)
                                                                             --------------------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Note payable proceeds (repayments), net . . . . . . . . . . . . . . . . .                     67,718       (75,000)
  Proceeds from private placements of common stock. . . . . . . . . . . . .                     50,000       496,875
  Proceeds of related party loans, net. . . . . . . . . . . . . . . . . . .                    358,126         1,738
                                                                             --------------------------  ------------
Net cash provided by financing activities . . . . . . . . . . . . . . . . .                    475,844       423,613
                                                                             --------------------------  ------------

NET DECREASE IN CASH. . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (179,968)     (529,529)
Cash, beginning of year   . . . . . . . . . . . . . . . . . . . . . . . . .                    271,032       800,561
                                                                             --------------------------  ------------
Cash, end of year   . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                  91,064   $   271,032
                                                                             ==========================  ============
                                                                                                     -.            -
<FN>
The accompanying notes are an integral part of the financial statements.


</TABLE>



                                                                              22
<PAGE>

<TABLE>
<CAPTION>

                                    VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)



                                                                                    Years Ended December 31,
                                                                                      2001                    2000
                                                                           --------------------------        -------
<S>                                                                        <C>                         <C>
Supplemental disclosures of cash flow information:

  Cash paid during the period for:
    Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                  42,531         $18,555
    Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          -           1,950

Supplemental disclosures of non-cash investing and financing activities:

  100,000 shares of common stock deemed issued for executive compensation                     10,000               -

  75,000 shares of common stock issued for services . . . . . . . . . . .                      7,500               -

  11,111 shares of common stock issued for payment of accounts payable. .                          -          10,000

  160,000 shares issued to franchisees:
    Current liabilities attributable to discontinued operations . . . . .                                     65,500
    Settlement with discountinued franchisee. . . . . . . . . . . . . . .                                      5,900
    Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       (160)
    Additional paid in capital. . . . . . . . . . . . . . . . . . . . . .                                    (71,240)

  152,000 shares of common stock deemed issued for
    deferred promotional agreement. . . . . . . . . . . . . . . . . . . .                          -          93,480

  Cumulative $6 Class C preferred stock dividend accrued/paid in-kind . .                     62,311          71,974

<FN>
The accompanying notes are an integral part of the financial statements.



</TABLE>



                                                                              23
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  1  -  Organization  and  Basis  of  Presentation;  Going  Concern:

A.     Organization  and  Basis  of  Presentation:

VillageWorld.com,  Inc.  ("the  Company")  is  the successor-consolidated entity
formed  by  the  merger  on July 1, 1999, of Big City Bagels, Inc. ("Big City"),
VillageNet,  Inc.  ("VillageNet")   and  Intelligent  Computer  Solutions,  Inc.
("ICS").  VillageNet  and ICS, which were affiliated by virtue of certain common
management  and  ownership prior to the merger, were incorporated in New York on
June  6,  1995 and October 21, 1994, respectively.  Big City was incorporated in
New York on December 21, 1992. After the merger, Big City, publicly held and the
legally  surviving parent company, changed its name to VillageWorld.com, Inc. As
the  former  shareholders  of VillageNet were issued a majority of the shares in
the  combined  company,   VillageNet  recorded  the  transaction  as  a  reverse
acquisition  of  Big  City and a forward acquisition of ICS.  Before the merger,
Big  City determined to discontinue its bagel business; accordingly the purchase
of  Big  City was recorded at the fair value of its net asset deficiency assumed
by  the Company.  The purchase of ICS was recorded at $2,577,524, the fair value
of   the   securities  issued  as  consideration  therefor;   such  fair   value
determination  by  the  Company  being  in  part  based  on  the  opinion  of an
independent  appraiser.  The excess of the securities issued to acquire ICS over
the  fair  value  of  ICS's  specifically  identifiable  assets, $2,373,923, was
recorded  as  goodwill.

The  consolidated  financial statements reflect the operations of VillageNet and
ICS  for  all periods presented.  In accordance with Accounting Principles Board
Opinion  No.  30,  the  results  of the discontinued operations of Big City were
accrued  at  the  date  of  merger.  In  fiscal  2000, the Company completed the
disposal  of  its bagel operations, closing its commissary, which supplied bagel
products  to franchise stores and negotiating separation agreements with all but
one  franchisee.  Resolution  of  the remaining matter is not expected to have a
material  effect  on the Company's financial condition or results of operations.

The  Company  provides,  through  its two principal subsidiaries, VillageNet and
ICS,  community-oriented  Internet  access  under  private  labels and installs,
maintains  and services computer network systems consisting of full hardware and
proprietary  software solutions.  VillageNet provides Internet on-line services,
offering  its  subscribers  a  variety  of  services  including electronic mail,
software,  computing  support,  and  easy  access  of  the Internet.  VillageNet
provides  small  businesses  with  fully  managed services that include Internet
connections,  remote  dial  access  and  Web  hosting services.  ICS offers full
service  system  integration,  specializing  in  high-end   computer  networking
infrastructures,   Internet  solutions,   and  Local   and  Wide  Area   Network
installations  for  commercial,  industrial   and  military  applications.   All
intercompany  balances  and  transactions  are eliminated in consolidation.  The
Company  considers  itself  to  operate  in  one  business  segment.

B.   Going  Concern:

Accounting  principles  generally  accepted  in  the  United  States  of America
contemplate  the  realization  of  assets and satisfaction of liabilities in the
normal course of business.  The Company had net losses of $1,120,146 in 2001 and
$2,059,718  in  2000.  At  December  31, 2001, the Company has a working capital
deficit  of  $1,783,683 and a current ratio of 0.25 to 1.  Moreover, the Company
has an extremely tight cash position, which occasionally resulted in intra-month
cash  overdrafts  with  its  bank  during  2001,  the highest of which, $64,106,
occurred in October. The last of such overdrafts occurred in November 2001.  The
Company's  operating  losses  and  current  financial position raise substantial
doubt  as  to  its  ability to continue as a going concern.  In October 2001 the
Company  announced  the  final approval by the U.S. Air Force of a multi-million
dollar  contract  to  implement  a  local and wide area network solution for the
Royal  Saudi  Air  Force  ("RSAF") awarded to the Company and a related company,
ATTI  International  Development,  Inc.  ("AID").  In  December 2001 the Company
commenced  work  on  its  portion of the initial contract and received the first
$100,000  contract-related  payment.  The verbal agreement with AID provides for
five additional monthly payments, each in the amount of $100,000. The Company is
confident  that,  together  with AID, it will be awarded additional contracts on
similar projects with the RSAF.  However the Company must also attain profitable
operations  to  insure  its long-term viability.  Management believes it will be
successful  in  these  endeavors, but no assurances can be given in this regard.
The  consolidated financial statements do not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.  (See  Notes  3  and  6).




                                                                              24
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  2  -  Summary  of  Significant  Accounting  Policies:

A.     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 the disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.

B.     Cash  and  Cash  Equivalents:

The  Company  considers  all  cash accounts, which are not subject to withdrawal
restrictions  or penalties, and all highly liquid instruments with a maturity of
three  months  or  less  when  purchased  to  be  cash  equivalents.

C.     Accounts  Receivable  and  Concentration  of  Credit  Risk:

The  Company  sells  its  services and products to school districts, businesses,
church  and  other  non-profit  groups  and individuals concentrated in the Long
Island and New York City area.  Credit loss associated with these sales has been
minimal.  The Company also provides Internet services nationwide to individuals,
payment  for  which  is  made  in advance through credit cards.  Billings on the
Company's  RSAF  project  are  invoiced  to  its  affiliate.

D.     Inventory:

Inventory  is stated at the lower of cost, determined on the first-in, first-out
basis,  or  market.

E.     Fixed  Assets  and  Depreciation:

Fixed  assets are stated at cost, less accumulated depreciation.  The fair value
of assets acquired in business combinations is recognized as the new cost basis.
Depreciation  is  provided  using  the  straight-line  method over the estimated
useful  lives  of  the  respective assets, which range from five to seven years.
(See  Note  4).

F.     Goodwill:

The  aggregate  excess  of  cost  over the fair values of the assets acquired is
recorded  as  goodwill.  For all periods through December 31, 2001, goodwill was
amortized  to  operations over an estimated useful life of ten years.  Effective
January  1,  2002,  the  accounting  for  goodwill  will change significantly in
accordance  with  Statement  of Financial Accounting Standards No. 142; goodwill
will  no  longer  be  periodically  amortized  and  the method of testing it for
impairment  will  also  change.  (See  Note  2S). Through December 31, 2001, the
Company  tested  the recoverability of its goodwill in accordance with Statement
of  Financial  Accounting  Standards  No. 121.  Under such standard, a review is
made  whenever  changed  circumstances and situations indicate that the carrying
amount  of goodwill may not be recoverable.  If the projected, undiscounted cash
flows  related  to  goodwill  are less than its carrying amount, a write-down to
fair value is made and an equivalent impairment loss is recognized.  Application
of  this  method  at  December 31, 2001 did not reflect any goodwill impairment.

G.     Deferred  Income:

Payments received in advance of the related services being provided are reported
as  deferred  income.




                                                                              25
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                     ---------------------------------------
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  2  -  Summary  of  Significant  Accounting  Policies  Stock - (continued):

H.     Balance  Sheet  Classification  of  Accrued  Class  C  Preferred  Stock
Dividends:

The  Company  pays  dividends  on its Class C Preferred Stock in kind (in common
stock) only when such Class C stock is converted into common.  Since the accrued
liability  for  these  preferred dividends is satisfied by the issuance of other
equity  securities,  the liability is classified as long-term in accordance with
Statement  of  Financial  Accounting  Standards  No.  6.  (See  Note  8).

I.     Income  Taxes:

The  Company  is  subject  to  federal  and New York State taxes on income.  The
Company  accounts for income taxes pursuant to Statement of Financial Accounting
Standards  No. 109, wherein the income tax provision consists of amounts payable
to  or  refundable from taxing authorities plus deferred income taxes calculated
using  the  liability  method.  Under  this  method,  deferred  income taxes are
recognized  for  the tax consequences of temporary differences between financial
accounting  and income tax reporting.  Enacted statutory tax rates applicable to
future  years  are applied to the different asset and liability bases.  Deferred
income  tax  benefit or expense is measured by the change in net deferred income
tax  assets  or  liabilities during the year.  The effect on deferred taxes of a
change  in tax rates is recognized in operations in the period that includes the
enactment  date.  (See  Note  10).

J.     Fair  Value  of  Financial  Instruments:

The carrying amounts of cash and cash equivalents, accounts receivable, accounts
payable,  notes  and  loans payable, and accrued expense obligations approximate
fair  value  due  to  the  short-term  nature  or  their  underlying  terms.

K.     Revenue  Recognition:

Revenue  is  recognized when earned, based on the recognition criteria set forth
in  Staff  Accounting Bulletin No. 101 as follows:  Pervasive evidence of a sale
arrangement  exists;  delivery  of  product  has  occurred or services have been
provided;  the  price to the buyer is fixed or determinable; and, collectibility
is  reasonably  assured.

L.     Stock-Based  Compensation:

The  Company  accounts  for  stock-based  compensation  pursuant to Statement of
Financial  Accounting Standards No. 123.  This pronouncement allows companies to
either expense the estimated fair value of all stock options or, with respect to
options  granted to employees and directors, to continue to follow the intrinsic
value method previously set forth in Accounting Principles Board Opinion No. 25,
but  disclose  the  pro forma effects on net income (loss) had the fair value of
those  options  been expensed.  The Company has elected to continue to apply the
previous  standard  in  accounting  for  stock  options granted to employees and
directors.  The  Company  has  not  granted any options to consultants requiring
recognition  of  the  fair  value  method  specified  by  SFAS  No.  123.

M.     Interest  Expense  Imputed  on  Related  Party  Loans:

The  Company  has  certain loans with related parties.  Of these, the loans made
prior  to 2001 either bear no interest or bear interest at an annual rate of 5%.
Irrespective  of  the  rate of interest contractually called for on these loans,
the Company has imputed interest expense to yield a fair-market interest rate of
7.5%.  Interest  expense  of $33,514 and $32,313, respectively, has been imputed
on these loans in 2001 and 2000 with an equivalent amount credited to additional
paid-in  capital.  Loans originating in 2001 bear interest at 8%.  (See Note 6).



                                                                              26
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  2  -  Summary  of  Significant  Accounting  Policies  Stock - (continued):

N.     Advertising  Costs:

Advertising  costs  are  expensed  as  incurred.

O.     Discontinued  Operations:

During  fiscal  2000,  the  Company  completed  the  disposition  of  the  bagel
operations.  Settlements have been negotiated with all former franchisees except
one,  the ultimate resolution of which is not expected to result in any material
liability  in excess of that previously accrued.  Two settlements concluded with
former  franchisees  during  fiscal 2000 resulted in expense of $55,900 that had
not  previously  been  provided.

P.     Loss  Per  Common  Share:

The  Company  calculates  loss  per  share  pursuant  to  Statement of Financial
Accounting  Standards  No.  128,  which  requires  the presentation of basic and
diluted  per share measurements.  Basic loss per share reports loss attributable
to  common  stockholders  divided  by  the  weighted  average  number  of shares
outstanding.  Basic  earnings per share exclude any dilutive effects of options,
warrants  and  convertible  securities.  Diluted  earnings per share include the
dilutive  effects  of  such  securities, except when they are anti-dilutive.  In
both  2001  and  2000,  net  loss  attributable  to common stockholders reflects
dividends  related  to the Company's Class C Preferred Stock, which were paid in
kind  on the Class C Preferred Stock actually tendered for conversion as well as
those  accrued  on  unconverted,  outstanding  Class  C  shares.

Since  there  is neither an economic benefit for not converting, nor an economic
sacrifice from converting the Class B Preferred Stock, the per share calculation
gives  effect  to  the conversion of all outstanding Class B Preferred Stock for
both  periods  presented.

Q.     Reclassifications:

Certain  minor items in operating and investing activities in the 2000 statement
of  cash  flows  have been reclassified to conform to the presentation for 2001.

R.     Fourth  Quarter  Adjustments  -  (Unaudited):

On  September  26,  2001,  the  Company's board of directors approved a grant of
options  to  purchase  100,000  common shares, exercisable at $.01 per share, to
satisfy  $9,000  of accrued officer's bonus, based on the then fair value of the
underlying common stock of $.10 per share, which equaled the average closing bid
price of the Company's common stock for the last five trading days of September.
Such  grant  was to come from the 1998 Performance Equity Plan.  (See Note 11A).
Subsequent  to  the  filing of the Company's September 30, 2001 Form 10-QSB, the
board  was  informed by Company counsel that a grant of options with an exercise
price below the current fair market value of the Company's common stock violated
the  actual  written  terms  of the 1998 Plan.  The option grant in question was
accordingly voided; the $9,000 liability was reinstated; and options to purchase
100,000  common shares were restored to and remain available for grant under the
1998  Plan.  Due to the options' nominal $.01 exercise price originally granted,
the  100,000  shares  underlying  the  options  had  been  treated as issued and
outstanding  effective  September 26, 2001, with a stock subscription receivable
of  $1,000 reported as a contra account in stockholders' equity.  Such entry has
accordingly been reversed; the effect on weighted average outstanding shares for
the  three  and nine months ended September 30, 2001 was 5,435 and 1,832 shares,
respectively,  which  had  no  effect  on  reported  earnings  per  share.




                                                                              27
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  2  -  Summary  of  Significant  Accounting  Policies  Stock - (continued):

S.     Recent  Accounting  Pronouncements:

In  July  2001  the  Financial  Accounting  Standards  Board  issued SFAS No.141
"Business  Combinations"  and  SFAS  No.  142  "Goodwill  and  Other  Intangible
Assets."  SFAS  No.  141 requires business combinations initiated after June 30,
2001  to  be accounted for using the purchase method of accounting, and broadens
the  criteria  for recording intangible assets separate from goodwill.  Recorded
goodwill  will  be  evaluated against the new criteria and may result in certain
amounts   initially   recorded  as  goodwill  being  separately  identified  and
recognized   apart  from   goodwill.   SFAS  No.  142  requires  the  use  of  a
non-amortization  approach  to  account  for  purchased   goodwill  and  certain
intangibles.  Under  such approach, goodwill and certain intangibles will not be
amortized  into  results  of  operations,  but  instead  would  be  reviewed for
impairment  and  written down and charged to operations only in periods in which
the  recorded  value  of  goodwill  and intangibles exceeds its fair value.  The
statements   are   fully  effective  January  1,  2002.    Pursuant   to   these
pronouncements,  the  Company  will cease amortization of goodwill on such date;
however,  impairment reviews using the new methodology required by the standards
may  result  in  future  write-downs.  The  Company  has  not yet determined the
likelihood  or  amount,  if  any,  of  such  future  write-downs.

The  FASB  also  recently issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,"  that  is  applicable to financial statements
issued for fiscal years beginning after December 15, 2001.  The FASB's new rules
on  asset  impairment  supersede SFAS No. 121, "Accounting for the Impairment of
Long-Lived  Assets and for Long-Lived Assets to Be Disposed Of," and portions of
Accounting   Principles   Bulletin  Opinion  30,   "Reporting  the  Results   of
Operations."  This  Standard  provides  a single accounting model for long-lived
assets  to be disposed of and significantly changes the criteria that would have
to  be   met   to  classify  an  asset  as   held-for-sale.   Classification  as
held-for-sale  is an important distinction since such assets are not depreciated
and  are  stated  at  the lower of fair value or carrying amount.  This Standard
also  requires  expected future operating losses from discontinued operations to
be  displayed  in the period(s) in which the losses are incurred, rather than as
of  the measurement date as presently required.  The provisions of this Standard
are  not  expected  to  have  a  significant  effect  on the Company's financial
position  or  operating  results.

Note  3  -  International  Expansion  of  Networking  Operations:

In  October  2001  the  Company announced that it had received a sub-contract to
implement  a  local and wide area network (LAN/WAN) solution for the RSAF from a
related  company, AID.  The initial contract is for the upgrade of Prince Sultan
Air  Base  for  approximately  $7,000,000.  AID has advised the Company that the
portion of the contract to be jointly administered between them is approximately
$4,000,000.  The  Company  will  provide  engineering, network design, equipment
installation,  implementation  and  overall  management  services for this joint
project,  which  will  constitute  a  comprehensive upgrade and redevelopment of
systems  currently  used  by  the RSAF.  These services are expected to comprise
approximately  $600,000  of the joint project.  The $3,400,000 equipment portion
of  the  joint project is being provided by AID.  AID estimates that all LAN/WAN
upgrades  for  the  14  locations  throughout  the kingdom of Saudi Arabia could
exceed  one  hundred  million  dollars  over  the  next  3-4 years.  The Company
believes  it  is  in  the  lead  position to sub-contract the design and related
implementation  services for these additional projects.  (See Notes 1B and 6 and
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations).




                                                                              28
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  4  -  Fixed  Assets:


Fixed  assets  at  December  31,  2001  consist  of  the  following:
                                                                            Life
                                                                            ----

     Internet  equipment                              $  325,026        5  years
     Office  equipment                                    94,879      5-7  years
     Furniture  and  fixtures                             35,813      5-7  years
     Automobile                                            4,393        5  years
                                                     -----------
     Total  at  cost                                     460,111
     Less: Accumulated depreciation and amortization     232,607
                                                       ---------
                                                      $  227,504
                                                      ==========

Depreciation  expense  charged  to operations was $75,869 in 2001 and $82,956 in
2000.

Note  5  -  Note  Payable,  Bank:

The  Company  has  a  revolving  bank  line  of  credit  providing for a maximum
borrowing  of  $200,000,  due  May  31,  2002, renewable at the bank's approval.
Interest  is  payable monthly at prime plus two percent.  Borrowings are secured
by  a  pledge  of  the  Company's  assets  and  are  guaranteed by the Company's
President.  (See  Note  12A).

Note  6  -  Loans  Payable,  Related  Party:

ICS has various notes and loans due to certain related parties, certain of which
are  non-interest  bearing.  At  December  31,  2001,  the  outstanding amounts,
including accrued interest as applicable, and the contractual interest rates are
as  follows:

               Year  of           Amount,  including         Contractual
            origination           accrued  interest          interest  rate
            -----------           -----------------          --------------

         2000  and  prior              $  364,438                0%
         2000  and  prior                 340,551                5%
               2001                       252,102                8%
                                       ----------
               Total                   $  957,091
                                       ==========

Principal  and  interest  payments, contractually due on a quarterly basis, have
been  deferred  with  the lender's consent until August 1, 2002, when all of the
notes  and  loans  are  due  and payable, together with accrued interest.  These
loans  have  also  been  subordinated  to  bank  indebtedness  to  the extent of
$250,000.

On  notes  and loans originating prior to 2001, the Company has imputed interest
expense  to  yield  a  fair-market  rate  of  7.5%, with an equivalent offset to
additional  paid-in  capital.  Total interest expense on related party notes and
loans  was  $53,899  in  2001 and $42,947 in 2000, of which $33,514 and $32,313,
respectively,  was  imputed.

Note  7  -  Commitments  and  Contingencies:

A.     Operating  Leases:

The  Company  leases  its  office  premises  under various operating leases, all
expiring  March  31,  2002,  with  renewal  options  of  three  to  five  years,
conditioned  upon six months prior written notice.  Future annual minimum rental
commitments at December 31, 2001 are as follows: 2002: $27,650.  The Company did
not  give  timely  notice to exercise the renewal options but is seeking a lease
modification  with  the  lessor.  (See  Note  12D).




                                                                              29
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  7  -  Commitments  and  Contingencies  -  (continued):

A.     Operating  Leases  -  (continued):

The  Company also remains obligated under an operating lease for a store sold by
its  predecessor  in 1998, in the event that the acquirer defaults on the lease.
The  lease  expires  in  October  2005  and  requires monthly payments of $5,086
through  October  2005.  At December 31, 2001, the Company has not been informed
that  the  lease  is  in  default.

Rent  expense   was  $110,936  in  fiscal  2001  and  $99,935  in  fiscal  2000.

B.     Employment  Agreement:

The  Company  has  an  employment  agreement  with  its President, providing for
minimum  compensation  at  the  rate  of  $50,000  per year.  This amount may be
increased  annually  by  the  Board of Directors up to a maximum of $125,000 per
year, provided there is an additional employee, designated by two board members,
added  to the Company's payroll who is paid an annual salary equal to any excess
amount  over  $50,000  per  year  paid  to  the  President.

C.     Employee  Benefit  Plan:

The  Company  has a savings plan that qualifies as a deferred salary arrangement
Under   Section   401(k)  of  the  Internal  Revenue  Code.   Under  the   plan,
participating  employees may defer a portion of their pretax earnings, up to the
Internal  Revenue  Service  annual  contribution limit.  The Company matches one
third  of each employee's contributions to a maximum matching contribution of 2%
of  the  employee's  earnings.  The  Company's  pension  expense was $11,747 and
$14,645  for  the  years  ended  December  31,  2001  and  2000,   respectively.

D.     Major  Customer:

The  Company's  largest  customer accounted for approximately 33.6% and 13.2% of
total sales in 2001 and 2000, respectively.  Sales to this customer are pursuant
to  a contract, which they may cancel upon thirty days prior written notice.  No
other  customer  accounted  for  10%  or  more  of  total  sales in either year.

Note  8  -  Capital  Stock  Transactions:  Preferred  Stock:

A.     Description:

The  Company's  Class  C Preferred Stock accrues dividends at the rate of 6% per
annum,  payable  in  cash  or  in  shares of common stock at the election of the
Company  on  the  date  the  preferred  stock is converted into shares of common
stock.  The preferred stock and dividends accrued are convertible into shares of
the  Company's common stock by dividing the $100 purchase price for each Class C
preferred share by the lower of $1.404, or an amount discounted from the average
of the closing bid prices for the Company's common stock during the five trading
days  prior  to  the holders election to convert.  The initial discount was 30%.
When  the  Company's  registration  statement  for  the underlying common shares
became  effective  on  May  22,  2000,  the  discount  decreased to 17.5%.  Such
discount increased to 19% on November 22, 2000 and  to 21% on February 22, 2001.
The  maximum  discount  of  25%  went  into  effect  on  May  22,  2001.

B.   Fiscal  2000  Conversions:

In January and February of 2000, 3900 shares of Class C Preferred Stock together
with  accrued  preferred  dividends thereon were converted into 1,020,120 common
shares  at  a discount of 30% from the average of the closing bid prices for the
Company's  common  stock  during  the  five  trading  days prior to the holder's
election  to  convert.




                                                                              30
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  8  -  Capital  Stock  Transactions:  Preferred  Stock  -  (continued):

C.   Fiscal  2001  Conversions:

On  January  10th  ,  22nd, 23rd, February 23 rd, March 1st  and 6th  of 2001, a
total  of  385.26  shares  of  Class  C  Preferred  Stock  together with accrued
preferred  dividends  thereon  were  converted  into  402,383 common shares.  In
accordance  with  the  terms of the preferred stock issue, such conversions were
made at discounts of 19% and then 21% from the average of the closing bid prices
for  the  Company's  common  stock  during  the  prior  five  trading  days.

On  May  25th, 30th, 31st and June 1st, 4th, 5th, 7th, 15th, 20th, 26th and 28th
of  2001,  a  total  of 1,779.90 shares of Class C Preferred Stock together with
accrued  preferred dividends thereon were converted into 1,707,114 common shares
at  a  discount  of  25%  from  the  average  of  the closing bid prices for the
Company's  common  stock  during  the  prior  five  trading  days.

On  July 11th and August 1st, 7th and 14th and September 6th of 2001, a total of
369.75  shares  of  Class  C  Preferred  Stock  together  with accrued preferred
dividends thereon were converted into 393,936 common shares at a discount of 25%
from the average of the closing bid prices for the Company's common stock during
the  prior  five  trading  days

On  October  3rd,  4th,  5th,  12th,  24th  and  29th of 2001, a total of 421.75
additional  shares  of  Class  C Preferred Stock together with accrued preferred
dividends thereon were converted into 282,361 common shares at a discount of 25%
from the average of the closing bid prices for the Company's common stock during
the  prior  five  trading  days.  After  these  conversions, 8,943.34 of Class C
shares  remain  outstanding.  (See  Note  12C).

Note  9  -  Capital  Stock  Transactions:  Common  Stock:

A.   Fiscal  2000  Transactions:

In January and February 2000 the Company issued an aggregate of 1,020,120 shares
of  its  common  stock to various holders who elected to convert their shares of
the  Class  C  preferred. Such shares were converted based on the formula in the
designation  of  the  preferences  for  the  Class  C.  (See  Note  8B).

In  February  2000  the  Company  issued 11,111 shares of its common stock to an
attorney  in  payment  of $10,000 for legal services previously rendered by such
attorney  for  the  Company.

In February 2000 the Company granted five-year warrants to purchase an aggregate
of  152,000  shares  of the Company's common stock at an exercise price of $0.01
per  share for the following services: (i) to one person, for acting as a public
spokesman  for  the  Company,  a  warrant  to  purchase 70,000 shares; (ii) to a
marketing  and  promotional services firm for arranging the transaction with the
spokesman,  warrants to purchase an aggregate of 80,000 shares; and (iii) to one
person  for  legal  services provided in such transaction, a warrant to purchase
2,000  shares.  Due to the nominal amount of the exercise price, the Company has
recognized  the deemed issuance of these 152,000 shares at the fair value of the
Company's  common  stock at the date of issuance, $0.625 per share.  The $93,480
excess of such fair value over the unpaid subscription receivable of $1,520, has
been charged to promotional services on the accompanying statement of operations
for  fiscal  2000.  (See  Note  12B).

In  March  2000  the Company issued an aggregate of 150,000 shares of its common
stock  to  five persons in settlement of their previously accrued claims arising
from  the  Company's  predecessor's  discontinued  bagel franchising operations.




                                                                              31
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  9  -  Capital  Stock  Transactions:  Common  Stock  -  (continued):

A.   Fiscal  2000  Transactions  -  (continued):

On  March  13, 2000, the Company entered into a memorandum of understanding with
an  individual  to  serve  as  one  of  its  principal  executive officers.  The
memorandum  provided for employment on a full-time basis at a base annual salary
of  $75,000 with non-compete provisions until twelve months after termination of
employment.  The  understanding  also  provided for the unconditional grant of a
five-year  option to purchase 100,000 shares of the Company's common stock at an
exercise  price  of  $.01  per share.  Due to the nominal amount of the exercise
price,  the  Company  recognized compensation expense of $137,500 for the deemed
issuance of the 100,000 shares equal to the excess of the then fair value of the
Company's  common  stock  over  the exercise price.  The memorandum contemplated
that options to purchase up to 200,000 additional common shares would be granted
subject  to  certain  conditions.  The  first  100,000 were conditioned upon the
Company  raising  $5,000,000  of additional equity funding by December 31, 2000;
such  condition  was  not  met.  The  second  100,000  were conditioned upon the
Company's common stock trading at or above $4.00 per share on or before December
31,  2001.  (See  Note  9B).

On  April  17,  2000  the  Company completed a private placement with Millennium
Capital  Partners,  LLC,  an  investment group, wherein the purchaser was issued
666,667 shares of the Company's common stock and a five-year warrant to purchase
666,667  shares  of the Company's common stock at an exercise price of $1.00 per
share,  for  an  aggregate  investment  of  $500,000.  In  connection  with such
transaction  the  Company  issued  a five-year warrant to its placement agent to
purchase  5,000  shares  of  the Company's common stock exercisable at $1.00 per
share.

In  November of 2000 the Company issued 10,000 shares of its common stock to one
former  franchisee  in settlement of his claims against the Company arising from
the  Company's  discontinued  bagel  operations.  The  fair value of the shares,
$5,900, was charged to operations as no provision for this particular franchisee
had  previously  been  made.

B.   Fiscal  2001  Transactions:

On  March  1,  2001,  the  Company modified the terms of an existing conditional
grant of 100,000 common stock purchase options to one of its principal executive
officers.  Pursuant  to the modification, such previously granted options, which
were  contingent  on  the  Company's  stock  price  reaching  $4.00 per share by
December  31,  2001,  were  cancelled  and  100,000  unconditional  common stock
purchase  options  exercisable  at  $.01  per  share  for  a five-year term were
granted.  Due  to  the  options'  nominal exercise price, the Company recognized
compensation expense of $10,000, measured by the excess of the fair value of the
common  stock at the date of grant over the exercise price.  Also, in accordance
with Statement of Financial Accounting Standards No. 128, the 100,000 shares are
treated  as outstanding when computing basic earnings per share.  The officer to
whom  these  options  were  granted,  who also holds options to purchase another
100,000  common  shares,  also  exercisable at $.01 per share, resigned from the
Company  on  June  29,  2001, to pursue other opportunities, although he will be
available  to  consult with the Company on an as-needed basis.  Such resignation
did  not  alter  or  modify the terms of the stock purchase options; the 200,000
shares are still treated as outstanding with a stock subscription receivable for
$2,000  reported  as  a  contra  account  in  stockholders'  equity.

In  May  of 2001, the Company determined to satisfy $7,500 of accrued consulting
fees  by  the  outright issuance of 75,000 common shares.  Management determined
the  then  fair  value  of  the  Company's common stock to be $.10 per share and
subsequently recommended to the board of directors that this share issuance come
from  the Company's 1998 Performance Equity Plan.  (See Note 11A).  On September
26,  2001,  the Company's board of directors approved, from the 1998 Performance
Equity Plan, the outright grant of 75,000 common shares in payment of the $7,500
of  accrued  liability.  The average closing price of the Company's common stock
for  the  last five days the stock traded in September was $.10 per share.  This
grant reduced to 100,000 the availability of shares/options under the 1998 Plan.






                                                                              32
<PAGE>


                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  9  -  Capital  Stock  Transactions:  Common  Stock  -  (continued):

B.   Fiscal  2001  Transactions  -  (continued):

From  January  through  October  of 2001, the Company issued 2,785,794 shares of
common stock to various holders who elected to convert their shares of the Class
C preferred.  Such shares were converted based on the formula in the designation
of  the  preferences  for  the  Class  C.  (See  Notes  8B  and  12C).

On December 13, 2001, the Company sold 1,000,000 new, unregistered common shares
in  a private placement to one individual investor for $50,000.  The transaction
was  exempt  from registration under Section 4(2) of the Securities Act of 1933.
Such  unregistered  shares  are subject to the resale restrictions imposed under
the  Act.  The  per  share  price  of $.05 represented a 37.5% discount from the
previous  day's  closing price of the Company's common stock.  (See Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of Operations:
Liquidity  and  Capital  Resources).

Note  10  -  Income  Taxes:

The  provision  for  income  tax  expense  (benefit)  consists of the following:

                                                          2001            2000
                                                          ----            ----
        Current:
         Federal                                $            0     $          0
         State                                               0                0
                                               ---------------     -------------
                                                             0                0
                                               ---------------      ------------
        Deferred:
         Federal                                             0           36,200
         State                                               0         (  7,800)
                                                --------------      ------------
                                                             0           28,400
                                                --------------      ------------
                                                 $           0          $28,400
                                                 =============       ===========

At  December  31,  2001, the Company has net operating tax loss carryforwards of
approximately  $3,100,000,  which  are available to offset future taxable income
through  2021.  A  reconciliation of the federal statutory rate to the Company's
effective  tax  rate  for  fiscal  2001  and  2000  is  as  follows:

                                                          2001            2000
                                                          ----            ----
         Federal  statutory  rate  at  34%           $(381,000)    $  (691,000)
         State taxes, net of federal benefit                 0           1,300
         Items providing no carryforward benefit       381,000         718,100
                                                      ---------    ------------
         Total                                       $       0     $    28,400
                                                  ============      ===========

Deferred  income  taxes  arise  from  the net operating tax loss and accelerated
depreciation  methods.  The  Company's  deferred  tax  assets and liabilities at
December  31,  2001  are  as  follows:

        Deferred  tax  assets:
         Net operating loss carryforwards         $    969,600
         Valuation allowance for deferred assets      (936,900)
                                                   ------------
                                                        32,700
        Deferred tax liability: Property and equipment (32,700)
                                                      ---------
        Net  deferred  tax  asset                           $0
                                                    ===========

The  Company  provides  a  valuation  allowance  account for that portion of its
deferred  tax  assets,  which  more  likely  than not will not be realized.  The
deferred  tax  valuation allowance increased by $278,100 in 2001 and $234,500 in
2000.




                                                                              33
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  11  -  Common  Stock  Purchase  Options  and  Warrants:

A.     Stock  Options:

Prior  to the merger neither VillageNet nor ICS had granted any stock options to
its  employees.   The  Company  continued   the  predecessor's   1998  and  1996
Performance  Equity  Plans.

Pursuant  to  the  Company's 1996 Performance Equity Plan, on March 31st of each
calendar year during the term of the 1996 Plan, assuming there are enough shares
and/or  options then available for grant under the 1996 Plan, each person who is
then a director of the Company is awarded stock options to purchase 2,000 shares
of  common  stock  at  the  fair  market value thereof, all of which options are
immediately  exercisable  as  of the date of grant and have a term of ten years.
These are the only awards that may be granted to a director of the Company under
the  1996  Plan.

The  Company's  1996 Performance Equity Plan provides for the issuance of awards
of  up  to  70,000  shares of common stock to employees, officers, directors and
consultants.  The  awards,  which generally vest over four years, may consist of
incentive stock options, nonqualified options, restricted stock awards, deferred
stock  awards,  stock  appreciation  rights and other awards as described in the
1996  Plan.  At  December 31, 1999, 32,370 shares were exercisable at a weighted
average  exercise  price of $12.20 per share.  A summary of activity in the 1996
Plan  for  fiscal  2001  and  2000  follows:

<TABLE>
<CAPTION>



                                       2001       Weighted Average        2000       Weighted Average
                                     Shares        Exercise Price        Shares        Exercise Price
                                    -------        --------------        ------        --------------
<S>                               <C>             <C>                <C>             <C>
Outstanding at beginning of year          41,780  $           10.17          33,780  $           12.04
Granted during the year. . . . .          10,000                .10          10,000               2.00
Exercised during the year. . . .               0                  -           2,000               0.94
                                  --------------  -----------------  --------------  -----------------
Outstanding at end of year . . .          51,780  $            8.22          41,780  $           10.17
                                  ==============  =================  ==============  =================
Exercisable at end of year . . .          51,660  $            8.23          41,015  $           10.21
                                  ==============  =================  ==============  =================
</TABLE>

he  following  table summarizes outstanding and exercisable stock options, under
the  1996  Plan  at  December  31,  2001:

<TABLE>
<CAPTION>



           Grant      Number      Weighted Avg.     Number     Expiration
           Date    Outstanding   Exercise Price   Exercisable     Date
          -------  ------------  ---------------  -----------  ----------
<S>       <C>      <C>           <C>              <C>          <C>
          3/30/01.   10,000  $        .10           10,000      3/29/11
          3/31/00.   10,000          2.00           10,000      3/30/10
          3/31/99.    8,000           .9375          8,000      3/30/09
          4/22/98.      480          3.125             360      4/21/08
          3/31/98.    8,000          4.6875          8,000      3/29/08
         12/15/97     2,100         10.00            2,100     12/14/07
          3/31/97.   10,000         26.875          10,000      3/30/07
          7/11/96.      200          42.30             200      7/10/06
          3/31/96.    3,000          20.00           3,000      3/30/06
                    -------   ------------       ---------
                     51,780 .  $      8.22          51,660  $      8.23
                     ========  ===========        ========  ===========
</TABLE>

At  December  31, 2001, options for 8,232 shares were available for future grant
under  the  1996  Plan.



                                                                              34
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  11  -  Common  Stock  Purchase  Options  and  Warrants  -  (continued):

A.    Stock  Options  -  (continued):

The  Company's  1998  Performance Equity Plan provides for the issuance of up to
400,000   shares  of   common  stock  to  employees,  officers,   directors  and
consultants.  The  awards  may  consist of incentive stock options, nonqualified
options,  restricted  stock  awards,  deferred  stock awards, stock appreciation
rights  and  other awards as described in the 1998 Plan.  The board of directors
determines  vesting  periods.  In  September  2001,  an outright grant of 75,000
common shares was made under the Plan.  At December 31, 2001, there were 100,000
options  outstanding,  exercisable at $1.00 per share as well as options for, or
outright  grants  of  100,000  shares  available  under  the  1998  Plan.

In  May  1999,  management  of  the Company's predecessor made a grant of 50,000
five-year  options,  outside  of  any plan, to the predecessor's chief executive
officer.  These  options  have  an  exercise  price ranging from $0.48 to $1.00.
During  the  second  quarter  of  2000,  options  to  purchase 5,000 shares were
exercised.   In  addition   to  the  45,000   options  outstanding  under   this
freestanding grant, this same individual holds 100,000 options outstanding under
the  1998  Plan,  exercisable  through  August  20,  2008  at  $1.00  per share.

On  each  of March 31, 2000 and March 30, 2001, the Company's directors received
their  annual  automatic  grant  of  options  pursuant  to  the  Company's  1996
Performance  Equity  Plan  to  purchase  an aggregate of 10,000 shares of common
stock.  Such  options  are exercisable for a term of ten years at $.10 and $2.00
per  share, respectively.  The aggregate fair value of such options at the grant
dates   were  $1,000  in  2001  and   $19,100  in  2000,  calculated  using  the
Black-Scholes  option  pricing  method,  with an expected life of five years, no
dividends,  volatility  of 188% and 184%, respectively, and a risk-free interest
rate  of  4.65%  and  6.42%,  respectively.  Such fair values are not recognized
under  the  intrinsic  value  method  of  accounting  specified  by   Accounting
Principles Board Opinion No. 25.  If the fair value method required by Statement
of  Financial  Accounting  Standards No.123 had been followed, net loss for 2001
and  2000  on  pro forma bases would be $1,121,146 and $2,078,818, respectively,
and  net  loss  per  share  would be unchanged at $.01 in 2001 and $.02 in 2000.

At  December  31,  2001,  a total of 196,780 options were outstanding under both
plans  and  the  freestanding grant.  Options to purchase 352,000 shares at $.01
per  share  are excluded from the above totals, as such shares are deemed issued
and  outstanding  due to the nominal exercise price of such options.  (See Notes
12  B  and  12E).

B.     Warrants:

At  December  31,  2001,  the  following  warrants  were  outstanding:

<TABLE>
<CAPTION>



                                   Shares Reserved  Exercise Price    Expiration Date
                                   ---------------  ---------------  -----------------
<S>                                <C>              <C>              <C>
  Placement Agent Warrants. . . .           15,000  $      25.00      December 30, 2002
  Placement Agent Warrants. . . .           25,000        6.5625      December 30, 2002
  Private Placement Unit Warrants          666,667          1.00         April 16, 2005
  Placement Agent Warrants. . . .            5,000          1.00         April 16, 2005
  Other Warrants. . . . . . . . .            4,000  $   5.00 - $8.75     April 30, 2003
                                   ---------------
  Total . . . . . . . . . . . . .          715,667
                                   ===============
</TABLE>




                                                                              35
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2001 and 2000

Note  12  -  Subsequent  Events  -  (Unaudited):

A.     Bank  Borrowings:

The  bank has extended the maturity date of the Company's bank borrowings to May
31,  2002.  The facility presently provides for a $200,000 credit line, of which
$192,718  was  outstanding  at  December  31, 2001.  The Company has requested a
$100,000  increase  in  the  credit line to $300,000.  Such request is presently
pending.

B.    Exercise  of  Nominal  Options:

On  January  22,  2002,  a  holder  of  60,000  common  stock  purchase options,
exercisable at $.01 per share, exercised such options and paid the $600 exercise
price therefor.  Due to the nominal exercise price, such shares had been treated
as outstanding from the date of the option grant in accordance with Statement of
Financial Accounting Standards No. 128.  A $600 subscription receivable had been
provided  as  an  offset  to  stockholders'  equity.

C.    Conversion  of  Class  C  Preferred  Stock:

On  March  21,  2002,  165.75  shares  of Class C Preferred Stock, together with
$2,229  of  accrued  dividends, were converted into a total of 129,235 shares of
common stock.  After such conversions, 8777.59 shares of Class C Preferred Stock
remain  outstanding.

D.     Pending  Lease  Modification:

In  March  of  2002,  the  Company  and  the  lessor  verbally agreed to a lease
modification  providing  for a one-year extension through March 31, 2003 for the
three suites leased by the Company with no increase above the current rent.  The
Company has a further option to vacate one of the suites after three months with
no  penalty.  Minimum  rent  in fiscal 2002 will therefore be either $110,600 or
$91,600  if  the  option  to  vacate  is  elected.

E.     Proposed  Stock  Option  Plan:


Management  of  the  Company  has  recommended to the board of directors that it
consider  adopting  a  2002  Stock Option Plan to provide an equity compensation
incentive  to  employees, directors and consultants.  As proposed by management,
the  plan  would  be  for  1,000,000  shares  and would encompass qualifying and
non-qualifying  option grants as well as outright share grants and certain other
common  equity equivalents.  If approved by the board, the Company would present
the  new  plan  to  its  stockholders  for approval in its next proxy statement.


                                                                              36
<PAGE>
EXHIBITS

Exhibit
Number
------

3.1     Restated  Certificate  of  Incorporation  (1)
3.2     Amendment  No.  1  to  Certificate  of  Incorporation  (2)
3.3     Amendment  No.  2  to  Certificate  of  Incorporation  (2)
3.4     Bylaws  of  the  Company  (3)
10.1    Agreement  by  and between the Company and Ultrastar Internet Services,
        LLC  (4)
10.2    Employment  Agreement  by  and between the Company and Peter Keenan (4)
10.3    1996  Performance  Equity  Plan  (1)
10.4    1998  Performance  Equity  Plan  (5)
10.5    Lease  Agreement by and between ICS and Fortunato Development, Inc. for
        the lease of Suite 1A  located at  620 Johnson  Avenue,  Bohemia,  New
        York (6)
21     Subsidiaries  of  the  Company  (*)
____________

(*)     Filed  herewith

(1)  Filed  as  an  exhibit to the Company's Registration Statement on Form SB-2
(No.  333-2154),  declared  effective  by  the  Commission  on  May  7, 1996 and
incorporated  herein  by  reference.

(2)  Filed as an exhibit to the Company's Form 8-K, filed with the Commission on
December  30,  1999  and  incorporated  herein  by  reference.

(3)  Filed  as an exhibit to the Company's Form 10-KSB for the fiscal year ended
December  31, 1998, filed with the Commission on March 31, 1999 and incorporated
herein  by  reference.

(4)  Filed  as an exhibit to the Company's Form 10-KSB for the fiscal year ended
December  31, 1999, filed with the Commission on March 31, 2000 and incorporated
herein  by  reference.

(5)  Filed  as  an exhibit to the Company's Form S-8 (Reg. No. 333-80373), filed
with  the  Commission  on  June  10,  1999 and incorporated herein by reference.

(6)  Filed  as an exhibit to the Company's Form 10-KSB for the fiscal year ended
December  31, 2000, filed with the Commission on April 2, 2001  and incorporated
herein  by  reference.


                                                                              37
<PAGE>

<TABLE>
<CAPTION>


Exhibit 21                            Subsidiaries of the Company
<S>                                   <C>                          <C>                    <C>
Name . . . . . . . . . . . . . .  State of Incorporation       Date of Incorporation          Status
-----                            -----------------------       ---------------------          ------

Big City NY, Inc.. . . . . . . . . .  New York                  November 26, 1997      Wholly-owned by
                                                                                       VillageWorld.com, Inc.

Bagel Partners, Inc. . . . . . . . .  Delaware                  May 7, 1996            Wholly-owned by
                                                                                       VillageWorld.com, Inc.

Intelligent Computer Solutions, Inc.  New York                  October 21, 1994       Wholly-owned by
                                                                                       VillageWorld.com, Inc.

Village Net, Inc.. . . . . . . . . .  New York                  June 6, 1995           Wholly-owned by
                                                                                       VillageWorld.com,  Inc.

</TABLE>

                                                                              38
<PAGE>