SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                        ________________________________

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

      FOR THE YEAR ENDED DECEMBER 31, 2002     COMMISSION FILE NO. 0-28058

                          _____________________________

                             VILLAGEWORLD.COM, INC.
              (Exact Name of Registrant as Specified in Its Charter)

              New York                               11-3137508
              --------                               ----------
     (State of Incorporation)           (I.R.S. Employer Identification No.)

  620 Johnson Avenue, Bohemia, New York                 11716
  -------------------------------------           ----------------
  (Address of principal executive offices)            (Zip Code)
           (631) 218-0700
           --------------
   Registrant's Telephone Number
           Securities registered pursuant to Section 12(b) of the Act:
                    Common Stock, $0.001 par value per share
                                 (Title of Class)
                                -----------------

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months and (2) has been subject to such filing
requirements  for  the past 90 days.      Yes        [     ]      No       [X  ]
Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best   of  the  registrant'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  aggregate  market  value  of the voting stock held by non-affiliates of the
Registrant  as  of  December  27, 2002 was $1,811,460 using the closing price of
$0.025 on December 31, 2002. The aggregate market value of the voting stock held
by  non-affiliates  of  the  Registrant as of September 24, 2003 was $12,900,586
using  the  closing  price  of  $0.12  on  September  24,  2003.
     State  the  number  of  shares outstanding of each of the issuer's class of
common  equity,  as  of  the  latest practicable date: At December 31, 2002, the
issuer  had  outstanding  77,337,935 shares of Common Stock, par value $.001 per
share.  Pursuant to the terms of the Company's Certificate of Incorporation, the
conversion  of all outstanding Class C Preferred Stock automatically occurred on
December  28,  2002.  As  of  September 18, 2003, the holders of the outstanding
Class  B  Preferred  Stock have elected to convert their Class B Preferred Stock
into  shares of Common Stock.  At September 24, 2003, the issuer had outstanding
147,217,695  shares  of  Common  Stock,  par  value  $.001  per  share.
                      DOCUMENTS INCORPORATED BY REFERENCE:
     A  list  of  Exhibits and documents to be incorporated by reference to this
Annual  Report  on  Form  10-KSB  begins  on  page  21.


<PAGE>
                             VILLAGEWORLD.COM, INC.
                             2002 FORM 10-KSB REPORT

                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>



PART I                                                                                           Page
------                                                                                           ----
<S>            <C>                                                                  <C>
Item 1          Description of the Business                                                        2
Item 2.         Description of Property                                                            5
Item 3.         Legal Proceedings                                                                  5
Item 4.         Submission of Matters to a Vote of Security Holders                                6
PART II
-------
Item 5.         Market for Registrant's Common Equity and Related Stockholder Matters              6
Item 6.         Management's Discussion and Analysis of Financial Condition and Results of
                Operations                                                                         8
Item 7.         Financial Statements                                                              13
Item 8          Changes in and Disagreements with Accountants on Return Accounting and
                Financial Disclosure                                                              13
PART III
--------
Item 9.         Directors, Executive Officers, Promoters and Control Persons of the Registrant;
                Compliance with Section 16(a) of the Exchange Act                                 14
Item 10.        Executive Compensation                                                            15
Item 11.        Security Ownership of Certain Beneficial Owners And Management and Related
                Stockholder Matters                                                               18
Item 12.        Certain Relationships and Related Transactions                                    20
Item 13.        Exhibits and Reports On Form 8-K                                                  21
Item 14.        Controls and Procedures                                                           23
                                             ____________________
</TABLE>


<PAGE>


FORWARD-LOOKING  STATEMENTS

Certain  statements  under  the caption "Management's Discussion and Analysis of
Financial  Condition  and  Results  of  Operations" and elsewhere in this Annual
Report constitute "forward-looking statements" within the meaning of the Private
Securities  Litigation  Reform  Act  of  1995.  Such  forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the  actual  results,  performance  or  achievements of the Company, or industry
results,  to  be  materially  different from any future results, performance, or
achievements  expressed  or  implied  by  such  forward-looking statements. Such
factors  include,  among  others,  the  Company's  ability to attract customers,
general  economic  and  business  conditions  with  respect  to the software and
internet  commerce,  changes  in  government  regulations,  competition  and the
ability  of  the  Company  to  implement  its  business strategy and other risks
discussed  in this Form 10-KSB and the registration statement on Form SB-2 filed
with  the  Securities  and  Exchange  Commission.
Forward-looking  statements  speak  only  as  of  the  date of this Form 10-KSB.
Moreover,  whether or not stated in connection with a forward-looking statement,
the  Company  undertakes  no  obligation  to correct or update a forward-looking
statement  should  the  Company  later  become aware that it is not likely to be
achieved.  If the Company were to update or correct a forward-looking statement,
investors  and  others should not conclude that the Company will make additional
updates  or  corrections  thereafter.
PART  I
-------
ITEM  1.     DESCRIPTION  OF  THE  BUSINESS

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.

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, 2002, we generated revenues from our
monthly  Internet  subscription  services  of  $1,681,084.  Such  revenues  are
generated  typically  through  the payment to us of a monthly subscriber fee. We
presently  have  approximately  15,000  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. The
agreement  with  Ultrastar  has  been  terminated.


                                        2
<PAGE>
NETWORK  SYSTEMS

During  the  fiscal  year  ended  December  31, 2002, we generated $1,667,675 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.

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").  The  Company  is  a
principal  sub-contractor  on  this project, pursuant to a verbal agreement with
AID.  In  December  2001  the  Company  began work on its portion of the initial
contract.  As  of  August  15,  2002, the Company had completed its work on such
contract  for which it received $600,000 and had also completed work on a second
verbally  agreed-to  contract,  for  which  it  has  received  $300,000.

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 would like to expand 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  are  seeking  to  grow  our  domestic  Network integration business.  We are
refocusing  on  our core competencies.  We believe as the economy improves, more
of  our customers will be looking to upgrade and expand their existing networks.
We  will  be  able  to address their needs and provide the knowledge and service
required.

                                        3
<PAGE>
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 " and "Village Net " are registered with the
United  States Patent and Trademark Office. Our trademark "VillageWorld.com " is
registered  with  the  United  States  Patent  and  Trademark  Office.

EMPLOYEES

We  presently employ eleven (11) people, two of whom are our Executive Officers.
Three  (3) of our employees 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.

SUBSEQUENT  EVENTS

On  September  18,  2003,  pursuant  to the written election of the holders, the
Company  issued  44,252,344  shares  of  Common  Stock to the holders of Class B
Preferred  Stock  in  conversion  of  all  of the issued and outstanding Class B
Preferred   Stock .  Pursuant   to  the  Amended  and  Restated  Certificate  of
Incorporation  of  the Company, the Class B Preferred Stock converts into shares
of  Common  Stock of the Company upon the election of the holders of the Class B
Preferred  Stock.

On  September  8,  2003, the Company executed a letter of intent with Biometrics
2000  Corporation  to merge Biometrics 2000 Corporation with a subsidiary of the
Company.   Pursuant  to  the  letter  of  intent,  if  the  proposed  merger  is
consummated,  the  shareholders  of  Biometrics  2000 Corporation will be issued
shares  of  common  stock  of  the  Company  in  such  an  amount  as  to  equal
approximately  fifty-five  percent  (55%)  of  the issued and outstanding common
stock of the Company at such time.  The closing of the transaction is subject to
certain conditions including but not limited to the negotiation and execution of
a  definitive  merger  agreement by the Company and Biometrics 2000 Corporation.
There  is  no  guarantee  that  the  proposed  transaction  will be consummated.

                                        4
<PAGE>
On September 1, 2003, Dr. Steven Levi and David A. Levi, members of the Board of
Directors  of  the  Company,  resigned  from their positions on the Board of the
Company.

On  February 5, 2003, the Company made a stock grant not pursuant to any Company
plan  of  550,000  shares  of  Common Stock to an employee and consultant of the
Company.

The  landlord  of  the  office  facilities  leased by the Company has obtained a
judgement  on  the  Company for past due rent, interest and legal costs and fees
amounting  to  $38,100.

The  Company has entered into a verbal sub-lease agreement for one of its leased
office suites with one of its customers.  The sub-lease period is from September
1,  2003  to  January  31,  2005,  at  an  annual  rent  equal  to the Company's
obligations with respect to such suite pursuant to the Company's lease agreement
including  rent (together with annual 4% increases), real estate tax escalations
and  utilities.


ITEM  2.     DESCRIPTION  OF  PROPERTY
Our  principal  offices  are located in leased facilities at 620 Johnson Avenue,
Suites  1A and 1B Bohemia, New York 11716. The lease term for each of the Suites
expires  June  2005.  For  the  use  of  Suites  1A and 1B we pay annual rent of
$84,000.  One  of the Suites is being subleased to one of our customers pursuant
to  a  sublease  agreement with an annual rent of $42,000.  The sublease expires
January  2005.  The  annual  rent  due pursuant to our lease increased by 4% for
each  year  of the term. We believe our present office space is suitable for our
current  operations.

The  landlord  of  the  office  facilities  leased by the Company has obtained a
judgement  on  the  Company for past due rent, interest and legal costs and fees
amounting  to  $38,100.


ITEM  3.     LEGAL  PROCEEDINGS
On  September  20,  2002, VillageWorld was named as the defendant in a breach of
contract  complaint  brought  by  UltraStar  Entertainment,  LLC. The complaint,
presently  pending in New York County Supreme Court, asserts damages of not less
than  $220,000,  plus  costs  and  interest,  arising from the Company's alleged
failure  to  deliver  a  certain  software  package  as specified in the related
agreement  between  the  parties as well as the Company's alleged failure to pay
over  certain  monies  to  the  plaintiff.  Management does not believe that any
significant  loss  to  the  Company  will  result. No trial date has as yet been
scheduled.

In  April  2002,  the Company's subsidiary, ICS, was named as the defendant in a
breach of contract complaint brought by Metro-North Commuter Railroad, which had
ordered  computer  equipment  pursuant  to a fixed bid.  The complaint specified
damages  of $91,052 plus costs. Management does not believe that any significant
loss  to  the  Company will result. Neither depositions nor a trial date have as
yet  been  scheduled.


                                        5
<PAGE>
The  landlord  of  the  office  facilities  leased by the Company has obtained a
judgement  on  the  Company for past due rent, interest and legal costs and fees
amounting  to  $38,100.

The  Company  is involved in other various legal proceedings and claims incident
to  the  normal  conduct  of  its business. The Company believes that such legal
proceedings  and  claims,  individually  and in the aggregate, are not likely to
have  a  material  adverse  effect  on  its  financial  position  or  results of
operations.

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
During  the  fourth quarter of the year ended December 31, 2002, no matters were
submitted  by  the  Company  to  a  vote  of  its  stockholders.



                                     PART II
                                     -------
ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
MATTERS
COMMON  STOCK
     During  the  fiscal  year 2002 and up to May 29, 2003, the Company's Common
Stock  has  traded on the over-the-counter electronic bulletin board.  The price
ranges  presented  below  represent  the  highest and lowest quoted sales prices
during  each  quarter  for 2002 reported by Nasdaq. On May 29, 2003, the Company
was  delisted  from  the  over-the-counter  electronic bulletin board due to its
failure  to  remain  current with its filings required pursuant to Section 13 of
the  Securities  Exchange  Act  of  1934,  as  amended.  Since May 30, 2003, the
Company's  Common  Stock has been listed on the NQB Pink Sheets under the symbol
"VILW.PK".  The  quotes  represent  prices  between  dealers  and do not reflect
mark-ups,  markdowns  or commissions and therefore may not necessarily represent
actual  transactions.

<TABLE>
<CAPTION>

Year              Period                         Sales Information
-----          -------------                    ------------------
<C>    <S>            <C>                 <C>
                                   High. .       . . .  Low
                              -------------     -----------------


 2002      1st Quarter .         $ 0.29              $ 0.11
           2nd Quarter .         $ 0.27              $ 0.10
           3rd Quarter .         $ 0.15              $ 0.04
           4th Quarter           $ 0.12              $ 0.01
 2003      1st Quarter           $ 0.035             $ 0.01
           2nd Quarter .         $ 0.03              $0.005
</TABLE>

As  reported  by the Nasdaq OTC Bulletin Board, on December 27, 2002 the closing
price  of  the  Common  Stock  was  $0.025  per  share.


                                        6
<PAGE>

STOCKHOLDERS

At  December 31, 2002 there were 77,337,935 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) 1,304,447 shares of Common Stock issuable upon the
exercise  of  675,675  outstanding warrants and 628,780 outstanding options; and
(ii)  shares  of  Common  Stock  issuable  upon  the  conversion  of the Class B
Preferred  Stock. As of September 18, 2003, the holders of the outstanding Class
B  Preferred  Stock  have  elected to convert their Class B Preferred Stock into
shares  of  Common  Stock.  At  September  24, 2003, the Company had outstanding
147,217,695  shares  of  Common  Stock,  par  value  $.001  per  share

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. During the 2002 fiscal year, we
paid  dividends in kind of $52,665 and $______, respectively, in the form of our
Common  Stock  on  our  Class C Preferred Stock that had been converted into our
Common  Stock.

SECURITIES  AUTHORIZED  FOR  ISSUANCE  UNDER  EQUITY  COMPENSATION  PLANS

The  following  table  provides  information  as  of December 31, 2002 about the
Company's common stock that may be issued upon the exercise of options, warrants
and  rights  under  all  of  the  Company's  existing equity compensation plans.

<TABLE>
<CAPTION>



                         Number of                 Weighted-average                             Number of securities
                         securities to             exercise price of                            remaining
                         be issued                 outstanding                                  available for
                         upon                      options, warrants                            future issuance
                        exercise of                and rights                                   under equity
                        outstanding                                                             compensation plans
                        options,                                                                (excluding securities
                        warrants and                                                            reflected in column (a))
                        rights
                       --------------  ------------------------------  -------------------------------------------------
<S>                    <C>             <C>                             <C>
                                  (a)                       (b)                                            (c)
                       --------------  ------------------------------  -------------------------------------------------
Equity compensation
plans approved by
security holders:. . .

1996 Plan                    60,012                        $  7.13                                               0

1998 Plan                   400,000                                                                              0

2002 Stock Award and
Incentive Plan              726,768                                                                      1,273,032

Equity compensationplans
not approved by
security holders. . .       322,000 -                      $  0.35  -                                            -
---------------------  ---------------------        --------------------------            ------------------------
Total                     1,186,782                                                                      1,273,032
---------------------    -------------------       ---------------------------            ------------------------

</TABLE>


                                        7
<PAGE>

RECENT  SALES  OF  UNREGISTERED  SECURITIES

In  December  of  2002,  the  Company  agreed  to  satisfy  $14,250  of  accrued
professional  fees  and accrued liabilities by the issuance of 475,000 shares of
Common Stock.  Management determined the then fair value of the Company's common
stock  to  be  $.03  per  share  and  subsequently  recommended  to the board of
directors  that  225,000 share issuance come from the Company's 2002 Stock Award
and  Incentive  Plan  and  250,000  shares  issuance  from  outside of any plan.

In May of 2002, the Company agreed to satisfy $16,000 of accrued consulting fees
by  the  outright  issuance  of  100,000  shares  of  Common  Stock.  Management
determined  the  then  fair  value  of the Company's common stock to be $.16 per
share  and  subsequently  recommended  to the board of directors that this share
issuance  come from the Company's 1998 Performance Equity Plan. On May 14, 2002,
the  Company's  board  of  directors  approved, from the 1998 Performance Equity
Plan,  the  outright  grant  of 100,000 shares of Common Stock in payment of the
$16,000 of accrued liability.  The average closing price of the Company's common
stock  for  the  last five days the stock traded in May 2002 was $.16 per share.
This  grant  used  the remaining 100,000 shares/options available under the 1998
Plan.

From  March  through  December  of  2002,  pursuant  to the Amended and Restated
Certificate  of  Incorporation  of  the  Company,  the Company issued 53,281,905
shares  of  Common Stock to the holders of Class C Preferred Stock in conversion
of  their  shares  of  the  Class  C  Preferred  to  Common  Stock.

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

The  following  discussion  and  analysis should be read in conjunction with our
condensed 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.  The  Company has no obligation to
publicly  release  the  result  of  any  revisions,  which  may  be  made to the
forward-looking  statements  to  reflect  anticipated or unanticipated events or
circumstances  occurring  after  the  date  of  such  statements.


                                        8
<PAGE>
SELECTED  FINANCIAL  DATA
-------------------------
<TABLE>

<CAPTION>





                                                                             Year Ended December 31,
                                                                           -------------------------
RESULTS OF OPERATIONS:                                                   2002                20001
-------------------------------------------------------------  -------------------------  ------------
<S>                                                            <C>                        <C>

Total revenues. . . . . . . . . . . . . . . . . . . . . . . .  $  3,350,434               $ 3,911,503
                                                               --------------             ------------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . .  $  (1,730,438)             $(1,120,146)
                                                               --------------             ------------
Net loss attributable to common stockholders. . . . . . . . .  $  (1,783,343)             $(1,182,457)
Basic and diluted income (loss) per common share. . . . . . .  $       (0.01)             $     (0.01)
                                                             -----------------            ------------
Weighted average common shares outstanding, giving effect
 to the conversion of all Class B Preferred Stock outstanding     94,142,084               90,937,739
-------------------------------------------------------------  -------------------------  ------------

YEAR-END FINANCIAL POSITION:
Working capital deficit . . . . . . . . . . . . . . . . . . .  $  (1,886,217)
Total assets. . . . . . . . . . . . . . . . . . . . . . . . .  $     821,412
Total liabilities . . . . . . . . . . . . . . . . . . . . . .  $   2,233,735
Stockholders' deficiency. . . . . . . . . . . . . . . . . . .  $  (1,412,323)
</TABLE>

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

YEAR  ENDED  DECEMBER  31,  2002  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  2001

The  Company's total revenues decreased by $561,069, or 14.3%, to $3,350,434 for
the year ended December 31, 2002 from $3,911,503 for the year ended December 31,
2001.  This  decline  in  total revenues represents the decrease in subscription
revenues,  which  comprised  50.2% of total revenue in 2002 compared to 54.8% in
2001.  Subscription  service  revenue  fell by $460,640, or 21.5%, to $1,681,084
for  2002  from  $2,141,727  one year ago.  The reason for the large decline, as
disclosed  in  previous  quarters  filings,  was  that  effective  June 30, 2002
Ultrastar  Internet  Services  LLC  (Ultrastar)  ceased  to be a customer of the
Company.  Ultrastar  was  the  Company's  largest  customer  and  accounted  for
$1,101,085  of  subscription  revenue  or  32.9%  of  total  revenue for 2002 as
compared  to  $1,312,370 of subscription revenue or 33.6% of the Company's total
revenue  in  2001.  On September 20, 2002, Ultrastar commenced an action against
the  Company,  asserting  breach  of contract and non-payment of certain monies.
The  Company believes such action to be totally without merit.  (See Note 10B to
the  Condensed  Consolidated  Financial  Statements  and Part II, Item I, "Legal
Proceedings').

Hardware  sales decreased by $706,140, or 62.1%, to $431,177 in 2002. This trend
was  present  throughout  2002, reflecting a slowdown in capital expenditures by
the Company's customers, consistent with the economy as a whole.  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.  During  2002,  the  Company's  emphasis  had  been on
installation,  maintenance  and  consulting services, which are more profitable.
Maintenance  and  consulting revenues decreased for the year by $7,053, or 2.5%,
to  $280,470 while installation services substantially increased by $680,801, or
247.4%,  to $956,028 in 2002, reflecting eight monthly payments of $100,000 each
received  through  August  2002  on  two  verbal  overseas contracts with AID, a
related  company.  Both  contracts  have been completed and both the Company and
AID are seeking additional projects, for which various bids are outstanding, but
for  which  no  contracts  have  been  awarded.

                                        9
<PAGE>
Other  revenues were insignificant in 2002, reflecting a decrease of $68,037, or
97.6% to $1,675 from $69,712.  In 2001, these revenues were principally from the
sale  of  CD  roms.

Cost  of  sales was $1,950,052, representing 58.2% of total revenue for the year
ended  December  31,  2002,  compared to $2,877,954, representing 73.6% of total
revenues  for the year ended December 31, 2001.  Cost of sales of VillageNet was
$1,368,731,  or  82%  of  related  revenues for 2002, compared to $1,877,143, or
84.9%,  one  year  ago.  Cost of sales of ICS was $581,321, or 34.6% of hardware
sales,  installation  services  and  maintenance/consulting for 2002 compared to
$1,000,802,  or  58.9%,  one  year ago.  The large increase in gross margin as a
percentage of sales for ICS reflects the significantly greater mark-up earned by
the Company on its labor-based maintenance, installation and consulting services
compared  to  hardware  sales  and  the  relative  mix  of  ICS's  revenues.

Total  gross  margin  increased  by  $366,824  or 35.5%, to $1,400,382 in twelve
months  of  2002  from  $1,033,558 one year ago.  As a percentage of sales, this
measure  increased  by  15.4%  to  41.8%  from  26.4%.

Selling,  general and administrative expenses (SG&A) were $3,026,263 in 2002, an
increase  of  $1,206,871,  or 66.3%, from $1,819,392 in 2001.  This increase was
principally  applicable  to the loss of impairment for goodwill.   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.  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.
Based  upon these tests, the Company took an impairment loss for its goodwill of
$1,480,443.  (See  Note  2S  to  the  consolidated  financial  statements).   In
addition  there  was  a  decrease in payroll and related benefits of $325,417 or
29.7%, to $770,037 in 2002 from $1,095,454 in 2001.  Of the total SG&A expenses,
$426,353 is attributable to VillageNet and $1,035,747 is attributable to ICS for
2002,  compared  to  $443,251  and $1,376,141, one year ago.  As a percentage of
sales,  SG&A  expenses  were  43.6%  in  2002  and  46.5%  in  2001.

Interest  expense  was  $104,557  in 2002, an increase of  $7,637, or 7.9%, from
$96,920  in  2001.  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  5  to  the  consolidated  financial  statements).

Pre-tax  loss  for the year ended December 31, 2002 was $1,730,438 compared to a
pre-tax  loss of $1,120,146 for the year ended December 31, 2001, an increase of
$610,292.  This  54.6% decline reflects the increase in gross profit of $366,824
and the increase in the ratio of SG&A expenses to the gross profit by 40.1% from
176%  in  2001  to  216.1%  in  2002,  as  well as the cessation of the periodic
amortization  of  goodwill,  which  amounted  to  $237,392  in  2001.

                                       10
<PAGE>
Preferred  stock  dividends were $52,905 in 2002 as compared to $62,311 in 2001.
Net  loss  attributable to common stockholders was accordingly $1,783,343 in the
current  year  and $1,182,457 last year.  Loss per share were nil in the current
period  while  the  loss  last  year on an equivalent per share basis was  $.01.
On  a pro-forma basis, giving retroactive effect to the adoption of SFAS No. 142
and  the cessation of amortization of goodwill, net loss for the twelve moths in
2001  would  have  been  $1,120,146  and  a  net  loss  attributable  to  common
shareholders  for  such  period  would  have  been  $1,182,457.   Therefore  the
pro-forma  improvement  in  the net loss and the net loss attributable to common
shareholders  for  the  current  period  would  have been $953,871 and $933,277,
respectively.  The  per  share  results  on  a  pro-forma  basis would have been
unchanged.

LIQUIDITY  AND  CAPITAL  RESOURCES

Cash  at  December  31,  2002,  all of which is maintained at the same bank, was
overdrawn  by $4,856 compared to a cash balance of $91,064 at December 31, 2001,
a  decrease of $95,920.  This decrease in cash was primarily attributable to the
Company's  reducing  its trade, commissions, and other accounts payables as well
as  the  completion  of  the two overseas contracts in August 2002 for which the
Company was paid $100,000 per month for the first eight months of the year 2002.
On  one  day  in  November  and  seven  days  in  December  the Company incurred
intra-month  overdrafts  on one of its checking accounts maintained at its bank,
the  highest  amount  overdrawn  was  $18,247 in November.  However in the first
seven  months  of  2003  the  Company's  cash  position  deteriorated.  ICS  had
overdrafts  in  both its checking accounts on various dates during the period of
January  through  July  2003.  The  highest  amount overdrawn was $36,243, which
occurred  in  June.  June  2003 had the most number of days, a total of 26, that
the  account  was  overdrawn.  During  the  same  seven month period, VillageNet
account  was overdrawn one day in July for $723.  Village World checking account
was  overdrawn  for  two  days  in  March  2003, $1,999 being the high overdraft
amount.  In  May  2003  there was a $4,247 judgment filed against Village World/
Big  City  Bagels  by Kemper Insurance Companies for an outstanding balance plus
interest  on  a  Worker's  Compensation Insurance policy that was in effect from
November 29, 1999 through November 29, 2000.  The Village World checking account
has been frozen until the judgment is satisfied.  In July 2003, Graybar Electric
Company  filed  a  $5,101 judgment against ICS.  Graybar is one of ICS's vendors
and the amount of the judgment is for various materials needed to complete sales
jobs  purchased by ICS plus interest and penalties.  (See additional litigations
pending  in  note  7E)

Accounts  receivable  decreased  by  $144,673  $258,896 at December 31 2002 from
$403,569  at December 31, 2001.  Partially the decrease, $51,893 is attributable
to  the  loss of the Company's customer Ultrastar.  The money due from Ultrastar
to  VillageNet  was  for  fees  associated with Gaithernet, one of their private
label ISP's for annual subscribers.  These monies ceased to be a receivable when
Ultrastar  terminated  its contract with the Company June 30, 2002.  In the last
quarter  2002, one of the Company's customers filed Chapter 11 of the Bankruptcy
Code.  In  accordance  with this information, the Company increased its bad debt
allowance  for  the entire amount, $83,720 owed by this customer to the Company.

                                       11
<PAGE>
Inventory  decreased  by $10,479 to $14,587 at December 31, 2002 from $25,066 at
December  31, 2001.  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 decreased by $16,112 to $74,035 at
December 31, 2002 from $90,147 at December 31, 2001, primarily due to the refund
of E-rate money to one of the Company's school district customers.  E-rate money
is a program set up by the federal government to help fund schools and libraries
for internet and technology services.  A reimbursement check was received by the
Company  and  remitted  to  customers  after  services  were  rendered.

Accounts  payable  and  accrued  expenses  decreased  by  $16,661 to $824,268 at
December  31, 2002 from $841,856 at December 31, 2001.  The Company applied much
of its available cash flow to reduce current payables during the year.  However,
the  Company  is  past due with many of its vendors as a result of its extremely
tight  cash  position.

Commissions payable, related to the Company's Internet hosting service revenues,
decreased  by $71,993 to $111,195 at December 31, 2002 from $183,188 at December
31,  2001,  reflecting  the  decreases  in  related  revenues.

Deferred  Income  decreased  by  $154,043  to  $64,633 at December 31, 2002 from
$218,676  at  December  31, 2001, principally attributable to the termination of
the  Ultrastar  contract.

Notes  and loans payable increased by $78,974 to $1,228,783 at December 31, 2002
from $1,149,809 at December 31, 2001, primarily reflecting additional borrowings
of  $55,500  from  a  related  party  in October 2002.  Loans payable to related
parties total $1,036,065 inclusive of accrued interest are due on demand.  Notes
payable  to  the  bank  remain  unchanged  at  $192,718  at  December  31, 2002.
Borrowings  under  the line, which has been extended until October 31, 2003, may
not  presently  exceed  $200,000.

At  December  31, 2002, the Company had a working capital deficit of $1,886,217,
an  increase of $102,534 from the $1,783,683 working capital deficit on December
31,  2001.  The  large  working  capital  deficit  raises  the  question  of the
Company's  continuation  as  a  going  concern.  Included in the working capital
deficit  is  $1,036,065 of related party debt, presently due upon demand.  Given
the  Company's  extremely tight cash position and inability to secure additional
funding,  the  Company  has  not  been  able  to  restructure  this  debt.

Operating  activities used cash of $143,812 for the year ended December 31, 2002
compared  to  $656,416  used  for  the same period one year ago.  Non-cash items
totaled  $142,753  in  2002,  of  which  depreciation and amortization comprised
$71,010,  compared  to  total  non-cash  items  of  $364,354  in 2001, including
depreciation  and  amortization  of  $313,340.

For  the  year  ended  December  31,  2002, investing activities provided $4,107
compared to $604 provided one year ago.  Substantially all of the change was due
to  refunds  of  security  deposits  received  by  Company from the landlord and
utility  company  in  2002.

Financing  activities  provided cash of $48,641 for the 2002 period, principally
due  to  net  advances from related party.  Bank loan proceeds and related party
loans  provided  the  majority  of  the  $475,844  in  2001.


                                       12
<PAGE>
In  June of 2002, at the Company's annual meeting of shareholders, the Company's
2002  Stock  Award  & Incentive Plan was ratified.  A total of 200,000 shares of
common  stock  were  reserved  and available for grant under the 2002 Plan.   In
February  2003,  a  total  of 225,000 outright share grants of common stock were
issued in satisfaction for certain current expense obligations.  In addition, on
the  same date, the Company awarded a total of 250,000 options to its employees.

ITEM  7.     FINANCIAL  STATEMENTS
The  report  of  the  Company's  Independent  Auditor,  the  Company's financial
statements and  notes to financial  statements appear  herein commencing on Page
F-1.

ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL
None.


                                       13
<PAGE>
PART  III
---------
ITEM  9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
REGISTRANT;  AND  MANAGEMENT  AND  RELATED  STOCKHOLDER  MATTERS

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

Peter  J.  Keenan          33          Chairman  of  the  Board  and  President
Celia  I.  Schiffner       47          Acting  Treasurer  and Chief Financial
                                       Officer
Hector  M.  Gavilla        59          Director
Moshe  Schwartz            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.

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.

On September 1, 2003, Dr. Steven Levi and David A. Levi, members of the Board of
Directors  of  the  Company,  resigned  from their positions on the Board of the
Company.

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.  As  of December 2002, 1996 Performance Equity Plan no longer has any
shares  available  for  grant.  In June 2002, the Company's 2002 Stock Award and
Incentive  Plan  was  adopted  and ratified.  The 2002 Stock Award and Incentive
Plan,  as  set  forth below, carries forwards the automatic annual grant of 2000
options  to  each  director  provided by the 1996 Plan.  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.

                                       14
<PAGE>

EXECUTIVE  OFFICERS

Officers  are  elected  annually  by  the  Board of Directors and serve at their
direction.  One  of our executive officers, Peter J. Keenan, is also a director.
Information  with  regard  to  Mr.  Keenan  is set forth above under the heading
"Directors."  The  remaining  executive officer is Celia I. Schiffner, Treasurer
and  Chief  Financial  Officer.

Celia  Schiffner  has  been employed as the Company's Acting Treasurer and Chief
Financial  Officer  since  April  1,2002.  Previously,  from January 2, 2001 Ms.
Schiffner was employed by the Company as an Accounting Manager.  From April 1997
until joining the Company, Ms. Schiffner served as the Controller of Montauk Rug
and  Carpet  Corp.

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.

COMPLIANCE  WITH  SECTION   16(A)  OF  THE  SECURITIES  EXCHANGE   ACT  OF  1934
Section  16(a)  of the Securities Exchange Act of 1934, as amended, requires the
Company's  executive  officers,  directors  and  persons  who  own more than ten
percent of a registered class of the Company's equity securities to file certain
reports  regarding  ownership  of, and transactions in, the Company's securities
with  the  Securities  and  Exchange  Commission  (the  "SEC").  These officers,
directors and stockholders are also required by SEC rules to furnish the Company
with  copies  of  all  Section  16(a)  reports  that  are  filed  with  the SEC.

Each  of  Peter J. Keenan, Hector M. Gavilla, David A. Levi, Dr. Steven Levi and
Moshe Schwartz failed to file one Form 5 with respect to one transaction each in
fiscal  2002.  All  of the foregoing individuals were officers, directors and/or
beneficial  owners of more than 10% of our common stock during 2002. 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. Although not reported by
these  individuals, we reported all of these transactions in our Form 10-KSB for
2002  and  again  in our Form 10-QSB for the first quarter of fiscal 2002. 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, 2002 were timely filed.

ITEM  10.     EXECUTIVE  COMPENSATION
The  following table sets forth information concerning compensation for services
in all capacities awarded to, earned by or paid to the Company's Chief Executive
Officers in the prior three completed fiscal years (the "Named Officers"). There
are no other executive officers whose compensation exceeded $100,000 in the year
ended  December  31,  2002.

                                       15
<PAGE>


<TABLE>
<CAPTION>



                                           SUMMARY COMPENSATION TABLE
                                          ----------------------------
                                                                                                              LONG-TERM
                                                        ANNUAL COMPENSATION                                COMPENSATION
                                          ----------------------------------------------------          ---------------

                                                                                                             SECURITIES
                                                                                    OTHER ANNUAL             UNDERLYING
NAME AND PRINCIPAL POSITION                 YEAR        SALARY ($)    BONUS ($)    COMPENSATION ($)     OPTIONS/SARS(#)
----------------------------              ------  -   -------------  ------  --------------------       ---------------
<S>                                                                       <C>                   <C>             <C>
Peter J. Keenan. . . . . . . . . . . . . . .2002 .   $   97,447
Chairman, President, Chief                  2001     $  100,000           -               -                       -
Executive and Operating Officer and         2000     $  113,228           -               -                       -
Treasurer

 Celia I. Schiffner . . . . . . . . . . . . 2002     $   67.267           -               -                       -
Acting Treasurer and Chief Financial
Officer . . . . . . . . . . . . . .


</TABLE>


                                       16
<PAGE>
  Mr.  Keenan  was  appointed  Chairman  of  the  Board  and  President upon the
consummation of the Merger (July 1, 1999). The compensation reflected herein for
all  periods  prior  thereto  was  for  services  rendered  to  ICS.

We  have  granted  30,000 stock  options pursuant to the  2002 Stock  Award  and
Incentive Plan to Celia Schiffner.  Other  than Peter Keenan,  none of employees
are  employed  pursuant to employment agreements.


DIRECTOR'S  COMPENSATION
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. As of December 2002, 1996
Performance  Equity  Plan  no longer has any shares available for grant. In June
2002,  the  Company's  2002  Stock  Award  and  Incentive  Plan  was adopted and
ratified.  The  2002 Stock Award and Incentive Plan, as set forth below, carries
forwards the automatic annual grant of 2000 options to each director provided by
the 1996 Plan. 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.

                           OPTIONS/SAR GRANTS IN 2002
                           --------------------------
The following table sets forth certain  information regarding options granted to
executive officers during  fiscal  2002.

                    Number of         Percent of total
                    Securities        Options/SARS
                    Underlying        Granted to
                    Options/SARs      Employees in     Exercise of   Expiration
Name                granted           Fiscal Yea       Base Price    Date
-------             ------------      ------------     ----------   -----------
Celia I. Schiffner    45,000              12%             $0.03    December 2012

                     AGGREGATE OPTION EXERCISES IN 2002 AND
                     --------------------------------------
                       2002 FISCAL YEAR-END OPTION VALUES
                       ----------------------------------
The  following  table  sets forth certain information regarding the value of the
options  held  at December 31, 2002 by the Named Officers. No officers exercised
any  options  during  fiscal  2002.

Fiscal  Year  End  Option  Values


                                       17
<PAGE>
<TABLE>
<CAPTION>



                          Number of Securities                        Value of Unexercised In-the-Money
                          Underlying Unexercised                            Options at Fiscal Year End
                          Options At Fiscal Year End
                          --------------------------------------     --------------------------------------
Name                            Exercisable     Unexercisable               Exercisable        Unexercisable
-------                         -----------    ---------------              -------------      -------------
<S>                           <C>                                                           <C>            <C>

Peter J. Keenan                    -                   -                          -                   -
Celia Schiffner                    45,000                   -                     -                   -

</TABLE>

1) The product of the excess of $0.025 (the closing price of our Common Stock at
December  27,  2002, as reported by the Nasdaq OTCBB) over the exercise price of
the  unexercised options which were in the money at such date, multiplied by the
number  of  such  unexercised  options.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION
The  Board  of  Directors of the Company does not have a compensation committee.
The  Board  of  Directors  determines executive compensation, based on corporate
performance  and  market  conditions.
EMPLOYMENT  AGREEMENTS

In  August 1996, ICS entered into an employment agreement with Mr. Peter Keenan.
The  agreement  provides  for  employment  on  a  full-time  basis  and contains
provisions  that Mr. Keenan will not compete or engage in a business competitive
with  the  Company's current or anticipated business until eighteen months after
the  termination  of  his  employment  agreement.  Pursuant  to  the  employment
agreement,  the  Company  pays  Mr.  Keenan  a base salary of $50,000 per annum.

STOCK  OPTION  PLAN

1996  PERFORMANCE  EQUITY  PLAN

In  March  1996,  the  Company's predecessor adopted the 1996 Performance Equity
Plan.  The  1996 Plan is administered by the Board of Directors which determines
the persons (other than directors) to whom awards will be granted, the number of
awards  to  be  granted,  and  the  specific  terms of each grant subject to the
provisions of the 1996 Plan. Awards consist of stock options (both non-qualified
options and options intended to qualify as incentive stock options under Section
422  of the Internal Revenue Code of 1986, as amended), restricted stock awards,
deferred  stock  awards, stock appreciation rights and other stock-based awards,
as  described  in  the  1996  Plan.

On  March  31  of  each  calendar  year  during  the term of the 1996 Plan, each
director  is  automatically awarded ten-year options to purchase 2,000 shares of
common  stock at an exercise price which is the fair market value of the Company
common  stock  on such March 31. All of such options are immediately exercisable
as  of  the  date  of  grant.

As  of December 31, 2002, of the 70,000 shares underlying options under the 1996
Plan,  all 70,000 options have been granted (8,232 during the 2002 fiscal year).
Options  that  have  been  granted and are presently outstanding are at exercise
prices  ranging  from $0.10 to $42.50 per share, including 8,232 options granted
to  directors on April 1, 2002 under the automatic grant provisions of the Plan.

The  automatic grant provisions of the 1996 Plan have been incorporated into the
2002  Stock  Award  and  Incentive  Plan,  which  is  set  forth  below.

                                       18
<PAGE>
1998  PERFORMANCE  EQUITY  PLAN

In 1998, the Company's predecessor adopted the 1998 Performance Equity Plan. The
1998  Plan  is  administered  by the Company's Board of Directors or a committee
appointed  by  the  Board.  Options  to  purchase  up  to  400,000 shares of the
Company's  common  stock  may  be  granted  under  the  1998  Plan.  The Company
previously  granted  options to purchase 300,000 shares exercisable at $1.00 per
share  under  this  plan  (In  May  2002, an outright grant of 100,000 shares of
Common  Stock  was  made  under the 1998 Plan). At December 31, 2002, there were
100,000  common  shares  available  under  the  1998  Plan,  either  as outright
issuances  or  underlying  option  grants.  Management  anticipates issuing such
remaining   shares   outright   in   satisfaction  of  certain  current  expense
obligations,  which  if  approved by the board would exhaust the availability of
shares  under  the  1998  Plan.

2002  STOCK  AWARD  AND  INCENTIVE  PLAN

In  June 2002, the Company's 2002 Stock Award and Incentive Plan was adopted and
ratified.  The  2002  Plan  provided  for  a  broad  range  of awards, including
incentive  and non-qualified options, restricted and deferred stock, performance
awards,  stock appreciation rights and other types of equity awards.  A total of
2,000,000  shares of Common Stock are reserved and available for grant under the
2002  Plan.  The  2002  Plan carries forwards the automatic annual grant of 2000
options  to  each  director  provided  by  the  1996  Plan.  The  2002  Plan  is
administered  by  the  Company's  Board  of  Directors.

In  December 2002, an outright grant of 225,000 common shares was made under the
Plan. In December 2002, the Company granted ten year options to purchase 250,000
shares  of  common  stock  at  an  exercise  price  of $.03 per share to various
employees  of  the Company. In December 2002,  the  Company  granted  1,768  ten
year  options  at  a  exercise  price  of  $.26  per  share  to   the  directors
of  the  Company, as the remaining portion of the annual grant to each director.

In  December 2002, the Company made a grant of 297,000 ten year options, outside
of  any  plan, to employees of the Company. These options have an exercise price
of  $0.03.  These  options  have  been  deemed issued and outstanding due to the
nominal  exercise  price  of  such  options.

ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
MANAGEMENT  AND  RELATED  STOCKHOLDER  MATTERS
The  following table sets forth information, as of December 31, 2002, based upon
information  obtained  from  the  persons  named  below,  regarding   beneficial
ownership of the Company's Common Stock by (i) each current director and nominee
for director of the Company, (ii) each executive officer of the Company named in
the  Summary  Compensation  Table  set   forth  under  the  caption   "Executive
Compensation,"  below,  (iii)  each  person  who  is known by the Company to own
beneficially more than 5% of the outstanding shares of its Common Stock and (iv)
all  executive  officers  and  directors  of  the  Company  as  a  group.

                                       19
<PAGE>

<TABLE>
<CAPTION>


                                                                                  Number of Shares
                                                            Number of Shares      of Common Stock
                                Number of Shares            of Class B            into which Class B
Name and Address                of Common Stock             Preferred Stock       Preferred is
of Beneficial                   Beneficially                Beneficially          Convertible (2) (3)      Percent of
Owner (1)                       Owner (2)                   Owned(2) (3)                                   Class (4)
------------------              ----------------           ------------------    ---------------------     ------------
<S>                                     <C>                <C>                    <C>                       <C>

Peter J. Keenan . . . . . . .    2,191,297(5)               128,854                 17,781,852             13.57%
Hector M. Gavilla .  . . . . .   1,718,198(6)               101,178(7)              13,962,564(7)          10.65%
Eli Levi. . . . . . . .  . . .   1,631,575(8)               100,315(9)              13,843,470(9)          10.51%
Roberta Levi. . . . . . . . ..   1,631,575(8)               100,315(9)              13,843,470(9)          10.51%
Hector P. Gavilla . . . . . . . .1,454,534                   85,750                 11,833,500             09.03%
David A. Levi . . . . . . . . .    475,366(10)               28,871                  3,984,198             03.03%
Dr. Steven Levi . . . . . . . .    475,366(11)               28,871                  3,984,198             03.07%
Moshe Schwartz. . . . . . . . .      5,646(12)                  -0-                        -0-                 *
Celia I. Schiffner                  45,000(13)                  -0-                        -0-                 *
Directors & Executive
Officers as a group
(four persons). . . . . . . . .  4,910,873(14)              287,774                 39,712,812             30.32%

</TABLE>

(*)     Less  than  1%

(1)     The  address  for  Eli  Levi,  Roberta Levi and Hector P. Gavilla is c/o
Advanced Testing Technologies, Inc., 110 Ricefield Lane, Hauppauge NY 11788. The
address  for each of the others is at the Company's offices, 620 Johnson Avenue,
Bohemia,  New  York  11716.

(2)     The  number  of shares of Common Stock beneficially owned by each person
or  entity  is  determined  under  the  rules promulgated by the SEC. Under such
rules, beneficial ownership includes any shares as to which the person or entity
has sole or shared voting power or investment power and shares which such person
or  entity  has  the right to acquire within sixty days after December 31, 2002.
The inclusion herein of any shares deemed beneficially owned does not constitute
an  admission  by  such  person  of  beneficial  ownership  of  such shares. The
information  is  based  upon  information  furnished  by  the  person  listed.

(3)     On  July 1, 1999, our predecessor, Big City Bagels, Inc. consummated the
merger  with  ICS,  VillageNet,  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  ICS  and  VillageNet,
respectively,  and  for  ICS  and  VillageNet  to  be the surviving corporations
continuing  after  the merger as our wholly owned subsidiaries. At the effective
date,  (i)  the 1,400 shares of the common stock of ICS, representing all of its
outstanding  stock, were converted into 4,309,733 shares of our Common Stock and
254,076  shares  of  our  Class  B  Preferred Stock and (ii) the 1,000 shares of
common  stock  of  VillageNet,  representing  all  its  outstanding  stock, were
converted  into  4,309,733  shares of our Common Stock and 254,076 shares of our
Class  B  Preferred  Stock.  As  of  September  24, 2003, the holders of Class B
Preferred  Stock  have  the  converted  all of the presently outstanding 508,152
shares  of Class B Preferred Stock into an aggregate of 70,124,976 shares of our
Common  Stock  at a conversion rate of 138 shares of Common Stock for each share
of  Class  B  Preferred  Stock.

(4)     Assumes  with  respect  to  options,  the  shares  underlying only those
options  deemed  beneficially  owned by the shareholder. Assumes with respect to
the  Class  B Preferred Stock, the conversion of all shares of Class B Preferred
Stock  into  our  Common  Stock.

                                       20
<PAGE>
(5)     Includes  5,646  shares  of  Common  Stock issuable upon the exercise of
options  held  by  Mr.  Keenan.

(6)     Includes 988,930 shares of Common Stock owned by Mr. Gavilla and 727,268
shares  of  Common  Stock  held  by  Mr.  Gavilla, as custodian for Alexander F.
Gavilla,  Mr.  Gavilla's  minor  son. Also includes 5,646 shares of Common Stock
issuable  upon the exercise of options held by Mr. Gavilla. Hector M. Gavilla is
the  father  of  Hector  P.  Gavilla.

(7)     Includes  58,302  shares of Class B Preferred Stock owned by Mr. Gavilla
and  42,876  shares of Class B Preferred Stock held by Mr. Gavilla, as custodian
for  Alexander  F.  Gavilla,  Mr.  Gavilla's  minor  son.

(8)     Includes  580,928  shares  of  Common  Stock  owned  by Roberta Levi and
580,928  shares  of  Common  Stock  owned  by Eli Levi. Eli and Roberta Levi are
husband  and  wife. Also includes 469,719 shares of Common Stock held by Roberta
Levi, as custodian for Shari Levi, Mr. and Mrs. Eli Levi's minor daughter. David
A.  Levi  and Dr. Steven Levi are sons of Eli and Roberta Levi. Does not include
469,719  shares of Common Stock owned by Susan Levi, daughter of Eli and Roberta
Levi,  beneficial  ownership  of  which  is  disclaimed.

(9)     Includes  35,722,  35,722  and  28,871 shares of Class B Preferred Stock
owned  by  Roberta Levi, Eli Levi and Roberta Levi, as custodian for Shari Levi,
respectively. Does not include 28,871 shares of Class B Preferred Stock owned by
Susan  Levi,  daughter of Eli and Roberta Levi, beneficial ownership of which is
disclaimed.

(10)     Includes  5,647  shares  of  Common Stock issuable upon the exercise of
options  held  by  Mr.  Levi.

(11)     Includes  5,647  shares  of  Common Stock issuable upon the exercise of
options  held  by  Dr.  Levi.

(12)     Consists  of 5,646 shares of Common Stock issuable upon the exercise of
options  held  by  Mr.  Schwartz.

(13)     Consists of 45,000 shares of Common Stock issuable upon the exercise of
options held by Ms. Schiffner.

(14)     Includes  those securities deemed to be beneficially owned by Hector M.
Gavilla,  Peter J. Keenan, David A. Levi, Dr. Steven Levi and Moshe Schwartz, as
set  forth in the table above.

ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

The  Company  guaranteed  a  $100,000  loan payable by Mr. Keenan to the formers
stockholders  of  ICS.  No  payments  have  been  made  under such loan to date.

In  October  2001, ATTI International Development, Inc., ("AID") a company whose
management  includes  Eli  Levi  and  Hector  M.  Gavilla  and  whose  principal
stockholders  include  those  two  individuals  and  members  of their families,
received  final  approval  from  the United States Air Force for its contract to
implement  a  local and wide area network (LAN/WAN) solution for the Royal Saudi
Air  Force  ("RSAF"). The Company is a principal sub-contractor on this project,
pursuant  to  a  verbal  agreement with AID.  In December 2001 the Company began
work  on its portion of the initial contract. As of August 15, 2002, the Company
had  completed  its work on such contract for which it received $600,000 and had
also  completed  work  on a second verbally agreed-to contract, for which it has
received  $300,000.


                                       21
<PAGE>

The  Company  has  various  notes  and  loans  due  to  AID and Advanced Testing
Technologies,  Inc.  ("ATTI"),  certain  of  which are non-interest bearing. Eli
Levi, a principal shareholder of the Company and father of David A. Levi and Dr.
Steven  Levi,  former  directors of the Company, is the Executive Vice President
and  Chief  Operating  Officer  of ATTI; Roberta Levi, Eli Levi's wife, David A.
Levi's  and Dr. Steven Levi's mother and a principal shareholder of the Company,
is  a  shareholder  of  ATTI.  Hector  M.  Gavilla,  a principal shareholder and
director  of  the  Company,  is  the  President,  Chief  Executive  Officer  and
shareholder  of  ATTI.  At December 31, 2002, the outstanding amounts, including
accrued  interest  as  applicable,  and  the  contractual  interest rates are as
follows:

<TABLE>
<CAPTION>



    Year of           Amount, including           Contractual
    origination      accrued interest             interest rate
    ------------     ------------------          --------------
<S>               <C>                 <C>                <C>
  2000 and prior  $          364,438                 0%
  2000 and prior             357,579                 5%
       2001                  256,786                 8%
       2002                   57,262                 8%
                        ----------------
  Total. . . . .  $        1,036,065
                  ==================
</TABLE>

Principal  and  interest  payments, contractually due on a quarterly basis, have
been deferred with the lender's consent until December 31, 2003, 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  $72,426  in  2002 and $53,899 in 2001, of which $41,493 and $33,514,
respectively,  was  imputed.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

<TABLE>
<CAPTION>

<S>      <C>                                                                                                  <C>
                                                                                                             Page
                                                                                                        ---------
 (a)(1)  The following financial statements of the Company are filed herewith:
         A. Report of Independent Certified Accountant                                                       F-1
         B. Consolidated Balance Sheets for the years ended December 31, 2002 and 2001                       F-2
         C. Consolidated Statements of Operations for the years ended December 31, 2002 and 2001             F-3
         D. Consolidated Statements of Changes in Stockholders' Deficit for the year ended December 31, 2002 F-4
         E. Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001             F-5
         F. Notes to Financial Statements                                                                    F-6 to F-20

</TABLE>

                                       22
<PAGE>


   (2) The following exhibits of the Company are filed herewith, unless
otherwise indicated:

EXHIBITS:
--------
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)
10.6    2002  Stock  Award  and  Incentive  Plan  (7)
21      Subsidiaries  of  the  Company  (*)
99.1    Certification  of Chief Executive Officer Pursuant to 18 U.S.C. SECTION
        1350  (*)
99.2    Certification  of Chief Financial Officer Pursuant to 18 U.S.C. SECTION
        1350  (*)

 (*)     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  the  Commission  on March 31, 2001 and incorporated
herein  by  reference

(7)  Filed  as  an  exhibit to the Company's Form DEF14A filed the Commission on
April  30,  2002  and  incorporated  herein  by  reference

                                       23
<PAGE>

ITEM  14.  CONTROLS  AND  PROCEDURES

(a)  Evaluation  of  disclosure  controls  and  procedures.

Based  on  evaluation  as  of  a  date within 90 days of the filing date of this
Annual  Report  on  Form  10-KSB,  VILLAGEWORLD.COM,  INC.'s principal executive
officer/principal  accounting  officer  have  concluded  that  VILLAGEWORLD.COM,
INC.'s  disclosure  controls  and  procedures (as defined in Rules 13a-14(c) and
15d-14(c)  under  the  Securities Exchange Act of 1934 (the "Exchange Act")) are
effective  to ensure that information required to be disclosed by the Company in
reports  that it files or submits under the Exchange Act is recorded, processed,
summarized  and  reported  within  the  time periods specified in Securities and
Exchange  Commission  rules  and  forms.

(b)  Changes  in  internal  controls.

There were no significant changes in VillageWorld.com, Inc. 's internal controls
or in other factors that could significantly affect these controls subsequent to
the  date  of  their evaluation, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.

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

                                       24
<PAGE>
                                   SIGNATURES
                                   ----------
     In  accordance  with  Section 13 or 15(d) of the Securities Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the  undersigned,  thereunto  duly  authorized,  on  October 3,  2003.

                                          VILLAGEWORLD.COM,  INC.


                                          By:/s/  Peter  J.  Keenan.
                                            ------------------------
                                            Peter  J.  Keenan
                                        Chairman of the Board, Chief Executive
                                        Officer  and  President

In  accordance  with  the  requirements  of  the  Securities  Act  of 1933, this
registration statement was signed by the following persons in the capacities and
on  the  dates  stated.

/s/  Peter J. Keenan     Chairman of the Board, Chief       October 3,  2003
---------------------       Executive Officer and
                           President
                         (Principal  Executive  Officer)
/s/  Hector M. Gavilla    Director                         October 3,  2003
------------------------
/s/  Moshe  Schwartz      Director                         October 3,  2003
------------------------
/s/  Celia I. Schiffner   Secretary  and  Treasurer        October 3,  2003
------------------------ (Principal Financial Officer)


                                       25
<PAGE>
                      CERTIFICATION PURSUANT TO SECTION 302
                      -------------------------------------
                        OF THE SARBANES-OXLEY ACT OF 2002
                        ---------------------------------

I,  Peter  J.  Keenan,  certify  that:

1.  I have reviewed this annual report on Form 10-KSB of VILLAGEWORLD.COM, INC.;

2.  Based  on  my  knowledge,  this  annual  report  does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  Company's  other  certifying  officers  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

 a)  designed  such  disclosure  controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  annual  report  is  being  prepared;

 b)  evaluated  the  effectiveness  of  the registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report  (the  "Evaluation  Date");  and

 c)  presented  in this quarterly report our conclusions about the effectiveness
of  the  disclosure  controls  and  procedures based on our evaluation as of the
Evaluation  Date;

5.  The  Company's  other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
functions):

 a)  all  significant  deficiencies  in  the  design  or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

 b)  any  fraud,  whether  or  not  material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.  The  Company's other certifying officers and I have indicated in this annual
report  whether  there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of  our  most recent evaluation, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.

Date:  October 3,  2003
/s/  Peter  J.  Keenan
----------------------
Chairman  of  the  Board of Directors, President and Principal Executive Officer

                                       26
<PAGE>
                      CERTIFICATION PURSUANT TO SECTION 302
                      -------------------------------------
                        OF THE SARBANES-OXLEY ACT OF 2002
                        ---------------------------------

I,  Celia  I.  Schiffner,  certify  that:

1.  I have reviewed this annual report on Form 10-KSB of VILLAGEWORLD.COM, INC.;

2.  Based  on  my  knowledge,  this  annual  report  does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The   Company's   other  certifying  officers  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

 a)  designed  such  disclosure  controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  annual  report  is  being  prepared;

 b)  evaluated  the  effectiveness  of  the registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report  (the  "Evaluation  Date");  and

 c)  presented  in this quarterly report our conclusions about the effectiveness
of  the  disclosure  controls  and  procedures based on our evaluation as of the
Evaluation  Date;

5.  The  Company's  other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's   board  of  directors   (or  persons  performing  the   equivalent
functions):

 a)  all  significant  deficiencies  in  the  design  or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in   internal  controls;  and

 b)  any  fraud,  whether  or  not  material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.  The  Company's other certifying officers and I have indicated in this annual
report  whether  there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of  our  most recent evaluation, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.


Date:  October 3,  2003
/s/  Celia  I.  Schiffner
-------------------------
Acting  Treasurer  and  Principal  Financial  Officer

                                       27
<PAGE>
<TABLE>
<CAPTION>



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<S>                                                                                                      <C>
                                                                                                        Page
                                                                                                        ----
    A. Report of Independent Certified Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1

    B. Consolidated Balance Sheets for the years ended December 31, 2002          . . . . . . . . . . .  F-2

    C. Consolidated Statements of Operations for the years ended December 31, 2002 and 2001 . . . . . .  F-3

    D. Consolidated Statements of Changes in Stockholders' Deficit for the year ended December 31, 2002  F-4

    E. Consolidated Statements of Changes in Stockholders' Deficit for the year ended December 31, 2001  F-5

    F. Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001 . . . . . .  F-6

    G. Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-7-F-20


</TABLE>

<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, 2002 and the related
consolidated  statements  of operations, stockholders' deficiency 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, 2002 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
six  times the amount of its current assets at December 31, 2002.  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
August  25,  2003


                                       F1
<PAGE>

<TABLE>
<CAPTION>

                     VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2002



ASSETS
<S>                                                     <C>
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . .  $         -
Accounts receivable, net of allowance. . . . . . . . .      258,896
 for doubtful accounts
Inventory. . . . . . . . . . . . . . . . . . . . . . .       14,587
Prepaid expenses and other current assets. . . . . . .       74,035
                                                        ------------
     Total Current Assets. . . . . . . . . . . . . . .      347,518


Fixed assets, net of accumulated depreciation. . . . .      156,573
Goodwill . . . . . . . . . . . . . . . . . . . . . . .      300,000
Other assets . . . . . . . . . . . . . . . . . . . . .       17,321
                                                        ------------
               TOTAL . . . . . . . . . . . . . . . . .  $   821,412
                                                        ============


LIABILITIES AND STOCKHOLDERS' Deficiency
Current liabilities:
Cash overdraft . . . . . . . . . . . . . . . . . . . .  $     4,856
Note payable - bank. . . . . . . . . . . . . . . . . .      192,718
Accounts payable and accrued expenses. . . . . . . . .      824,268
Commissions payable. . . . . . . . . . . . . . . . . .      111,195
Deferred income. . . . . . . . . . . . . . . . . . . .       64,633
Loans payable, related parties . . . . . . . . . . . .    1,036,065
                                                        ------------
     Total Current Liabilities . . . . . . . . . . . .    2,233,735


Accrued cumulative preferred stock dividends . . . . .            -
                                                        ------------
     Total Liabilities . . . . . . . . . . . . . . . .    2,233,735
                                                        ------------

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

Stockholders'  Deficiency:
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; 0 and 8,943 shares outstanding,
  respectively . . . . . . . . . . . . . . . . . . . .            -
Common stock; $.001 par value; 200,000,000 shares
 authorized; 77,337,935 and 23,481,030 shares issued,
  respectively . . . . . . . . . . . . . . . . . . . .       77,338
Additional paid in capital . . . . . . . . . . . . . .    6,125,907
Accumulated deficit. . . . . . . . . . . . . . . . . .   (7,548,532)
Stock subscription receivable. . . . . . . . . . . . .       (2,920)
Treasury stock (65,279 shares at cost) . . . . . . . .      (64,624)
                                                        ------------
     Total stockholders' deficiency. . . . . . . . . .   (1,412,323)
                                                        ------------

               TOTAL . . . . . . . . . . . . . . . . .  $   821,412
                                                        ============
                                                                  -
</TABLE>

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

                                       F2
<PAGE>

<TABLE>
<CAPTION>

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



                                                                                          Year Ended December 31,
                                                                                              2002             2001
                                                                                   -----------------     ------------
<S>                                                                           <C>                        <C>
REVENUES:
Subscription services. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $              1,681,084   $ 2,141,724
Hardware sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   431,177     1,137,317
Maintenance and consulting . . . . . . . . . . . . . . . . . . . . . . . . .                   280,470       287,523
Installation services. . . . . . . . . . . . . . . . . . . . . . . . . . . .                   956,028       275,227
Private label cd roms. . . . . . . . . . . . . . . . . . . . . . . . . . . .                         -             -
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     1,675        69,712
                                                                              -------------------------  ------------
          Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . .                 3,350,434     3,911,503
                                                                              -------------------------  ------------

COSTS AND EXPENSES:
Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 1,950,052     2,877,945
Selling, general and administrative. . . . . . . . . . . . . . . . . . . . .                 1,545,820     1,819,392
Loss on impairment of goodwill                                                               1,480,443             -
Amortization of excess of cost over fair value
 of net assets acquired. . . . . . . . . . . . . . . . . . . . . . . . . . .                         -       237,392
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   104,557        96,920
                                                                              -------------------------  ------------
          Total costs and expenses . . . . . . . . . . . . . . . . . . . . .                 5,080,872     5,031,649
                                                                              -------------------------  ------------

Pre-tax loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                (1,730,438)   (1,120,146)
                                                                              -------------------------  ------------

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                (1,730,438)   (1,120,146)

Preferred stock dividends paid in-kind and accrued . . . . . . . . . . . . .                    52,905        62,311
                                                                              -------------------------  ------------

Net loss attributable to common stockholders . . . . . . . . . . . . . . . .  $             (1,783,343)  $(1,182,457)
                                                                              =========================  ============

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

Basic and diluted weighted average common
shares outstanding, giving effect
to the conversion to common stock of all Class B Preferred Stock outstanding                94,142,084    90,937,739
                                                                              =========================  ============

</TABLE>

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



                                       F3
<PAGE>

<TABLE>
<CAPTION>

                                      VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENT OF STOCKHOLDERS' Deficiency
                                       For the Year Ended Decemberr 31, 2002


                                                 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, 2002 . . . . .          508,152   $       508          8,943    $   9       23,481,030  $  23,481

Conversion of preferred shares
 (first quarter) . . . . . . . . .                                          (166)       -         129,235         129

Conversion of preferred shares
 (fourth quarter) . . . . . . . . .                                       (8,777)      (9)      53,152,670     53,153

Issuance of shares for services. .                                                                 100,000        100

Issuance of shares for services
 (fourth quarter) . . . . . . . . .                                                                475,000        475

Exercise of nominal stock options

Accrued  cumulative dividends
 on preferred stock

Capital contribution imputed
 for interest expense

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

Balance December 31, 2002. . . . .          508,152   $       508              -    $   -       77,337,935  $  77,338
                                    ================  ===========      ==========   =======     ==========  =========

                                                  -                  -              -        -
</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, 2002 . . . . .  $ 5,947,786   $ (5,765,189)  $    (3,520)    (65,279)  $     (64,624)  $   138,451

Conversion of preferred shares
 (first quarter) . . . . . . . . .        2,100           (240)                                                  1,989

Conversion of preferred shares . .
 (fourth quarter) . . . . . . . . .     104,853                                                                157,997

Issuance of shares for services. .       15,900                                                                 16,000

Issuance of shares for services
 (fourth quarter) . . . . . . . . .      13,775                                                                 14,250

Exercise of nominal stock options.                                       600                                       600

Accrued  cumulative dividends
 on preferred stock. . . . . . . .                     (52,665)                                                (52,665)

Capital contribution imputed
 for interest expense. . . . . . .       41,493                                                                 41,493

Net loss   . . . . . . . . . . . .            -     (1,730,438)            -           -               -    (1,730,438)
                                    -----------   -------------  -------------  ----------  --------------  -----------

Balance December 31, 2002. . . . .  $ 6,125,907   $ (7,548,532)  $     (2,920)   (65,279)  $     (64,624)  $(1,412,323)
                                    ===========   =============  =============  ==========  =============  ============

</TABLE>



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




                                       F4
<PAGE>

<TABLE>
<CAPTION>

                                      VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                       For the Year 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 30, 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 30, 2001. . . .  $ 5,947,786   $ (5,765,189)  $    (3,520)      (65,279)  $   (64,624)  $   138,451
                                   ============  =============  ============  ============  ============  ============

</TABLE>


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


                                       F5
<PAGE>

<TABLE>
<CAPTION>

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



                                                                    Years Ended December 31,
                                                                     2002               2001
                                                               -------------       ------------
<S>                                                   <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . .  $           (1,730,438)     $(1,120,146)
                                                      -----------------------     ------------

Adjustments to reconcile net loss to net cash
 used by operating activities:
  Depreciation and amortization. . . . . . . . . . .                  71,010          313,340
  Stock issued for compensation. . . . . . . . . . .                  30,250           17,500
  Interest expense accrued and imputed on
   related party loans . . . . . . . . . . . . . . .                  72,427           52,221
  Loss on impairment of goodwill . . . . . . . .                   1,480,443                -
  Bad debt provision . . . . . . . . . . . . . .                     110,499            5,000
  Decrease (increase) in:
      Accounts receivable. . . . . . . . . . . . . .                  34,174             (537)
      Inventory. . . . . . . . . . . . . . . . . . .                  10,479           24,806
      Prepaid expenses and other current assets. . .                  16,112          (28,791)
  Increase (decrease) in:
      Accounts payable and accrued expenses. . . . .                 (17,588)          50,338
      Commissions payable. . . . . . . . . . . . . .                 (71,993)          11,581
      Deferred income. . . . . . . . . . . . . . . .                (154,043)          18,272
      Other current liabilities. . . . . . . . . . .                   4,856                -
                                                      -----------------------     ------------
  Total adjustments. . . . . . . . . . . . . . . . .               1,586,626          463,730
                                                      -----------------------     ------------
  Net cash used by operating activities. . . . . . .                (143,812)        (656,416)
                                                      -----------------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Decrease (increase) in other assets. . . . . . . .                   4,107              604
                                                      -----------------------     ------------
Net cash provided (used) by investing activities . .                   4,107              604
                                                      -----------------------     ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Note payable proceeds (repayments), net. . . . . .                       -           67,718
  Proceeds from private placements of common stock .                     600           50,000
  Proceeds of related party loans, net . . . . . . .                  48,041          358,126
                                                      -----------------------     ------------
Net cash provided by financing activities. . . . . .                  48,641          475,844
                                                      --------------------------  ------------

NET DECREASE IN CASH . . . . . . . . . . . . . . . .                    (91,064)     (179,968)
Cash, beginning of year. . . . . . . . . . . . . . .                     91,064       271,032
                                                      --------------------------  ------------
Cash, end of year. . . . . . . . . . . . . . . . . .  $                       -   $    91,064
                                                      ==========================  ============
                                                                              -             -
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest . . . . . . . . . . . . . . . . . . . .                     32,132        42,531

Supplemental disclosures of non-cash investing and
 financing activities:
  Common stock issued for prepaid services/executive
   compensation. . . . . . . . . . . . . . . . . . .                     30,250        17,500
  Cumulative $6 Class C preferred stock dividend
   accrued/paid in-kind. . . . . . . . . . . . . . .                     52,905        62,311
  Capital contribution imputed for interest expense                      41,493        33,514
</TABLE>



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



                                       F6
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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.  (See  Note  4)

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 comprehensive
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 to 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 $166,275 in 2002 and
$1,120,146  in  2001.  At  December  31, 2002, the Company has a working capital
deficit  of  $1,802,497 and a current ratio of 0.19 to 1.  Moreover, the Company
has  an  extremely  tight  cash  position.  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").  The contract was awarded to
ATTI   International   Development,  Inc.  ("AID"),  a  related  company,  which
sub-contracted  a portion thereof to the Company pursuant to a verbal agreement.
In  December 2001 the Company began work on its portion of the initial contract.
As  of  August 15, 2002, the Company had completed its work on such contract for
which  it  received  $600,000  and  had also completed work on a second verbally
agreed-to  contract,  for  which  it has received $300,000.  AID has advised the
Company  it is hopeful of being awarded additional contracts on similar projects
with the Saudi Arabian government, which would likely require the Company's work
as  a sub-contractor. Presently two such projects are being pursued, for low and
medium  to  high  eight  figure  amounts, respectively. It is not yet known what
portion  of  these   contracts,  if   eventually   awarded  to  AID,   would  be
sub-contracted  to  the  Company;  the  Company's portion of the first completed
contract comprised approximately 10%.  The Company is also independently seeking
additional  contracts  directly  with   he  Saudi  government.  At present there

                                       F7
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

B.   Going  Concern:  -  (continued):
are  two projects being pursued, for high seven and low to moderate eight figure
amounts,  respectively.  There  is  no assurance that AID or the Company will be
awarded  any  of  these  projects.

The  Company  was  profitable in the first six months of fiscal 2002 although it
had  losses in the third and fourth fiscal quarters.  The Company had net income
of  $52,566 for the nine months ended September 30, 2002. In order to operate as
a  going  concern,  the Company must consistently achieve profitable operations.
Operations  in the third and fourth quarters were, and future operations will be
negatively  affected  by  the  loss  in  June  of  2002 of the Company's largest
customer  for  its  internet  on-line  services,  which  customer  accounted for
$1,444,688  and $1,312,371 of sales for the six-month period ended June 30, 2002
and  the  year  ended  December  31,  2001, respectively. Such sales constituted
approximately 47.8 and 33.6% of the Company's total sales for such periods.  The
gross  costs  historically  associated with this customer are approximately 85%.
The Company must also restructure its related party debt to insure its long-term
viability.  Management  is  hopeful  it  will be successful in restructuring its
related  party  debt,  in  connection  with  any  additional overseas networking
projects  being awarded, either to AID, or directly to the Company, as discussed
above,  and  that  the  high-profit  networking  revenues therefrom will largely
offset  the loss of the internet customer.  However, no assurances regarding any
of  these  matters can be given, including the continued availability of related
party  loans.

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  Note  12A).


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.

                                       F8
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                     ---------------------------------------
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

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.  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.     Allowance  for  Doubtful  Accounts:

The  Company  historically  has  had  little  incidence  of  uncollectible trade
receivables.  However  during  fiscal  2002,  the Company provided an additional
allowance  for  doubtful accounts of $110,499 for fiscal 2002 for two customers.
At  December  31,  2002, this reserve constituted 100% of the customers' account
receivable  balance  and  increased  the  Company's total allowance for doubtful
accounts  to  $115,499.

E.     Inventory:

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

F.     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  3).

G.     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  was changed significantly in
accordance with Statement of Financial Accounting Standards No. 142; goodwill is
no longer  periodically amortized and the method of testing for impairment  also
changed.  (See  Note  2S).  Through  December  31,  2002, the Company tested the
recoverability  of  its  goodwill  in  accordance  with  Statement  of Financial
Accounting  Standards  No.  142.  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,  2002  resulted  in  a  write-down  of  goodwill
$1,480,443.  (See  Notes  2S  and  4).

H.     Deferred  Income:

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

I.     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).

                                       F9
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                     ---------------------------------------
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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


J.     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).

K.     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.

L.     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.

M.     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.

N.     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 $41,493 and $33,514, respectively, has been imputed
on these loans in 2002 and 2001 with an equivalent amount credited to additional
paid-in capital.  Loans originating in 2001 and later bear interest at 8%.  (See
Note  6).

O.     Advertising  Costs:

Advertising  costs  are  expensed  as  incurred.


                                      F10
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                     ---------------------------------------
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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



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  2002  and  2001,  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 activities in the 2001 statement of cash flows
have  been  reclassified  to  conform  to  the  presentation  for  2002.

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.

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


                                      F11
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

 .     Recent  Accounting  Pronouncements:  -  (continued)

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  has ceased amortization of goodwill on such date.
At  December 31, 2002, the Company determined that a write-down in the amount of
$1,480,443  was  required.  (See  Note  4).

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 previously 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  -  Fixed Assets

        Fixed  assets  at  December  31,  2002  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     303,538
                                                     -------
                                                  $  156,573
                                                  ==========

Depreciation  expense  charged  to operations was $70,931 in 2002 and $75,869 in
2001.

Note  4  -  Goodwill

As a result of the July 1, 1999 merger of Big City, VillageNet and ICS, goodwill
was recorded in the amount of $2,373,923.  From the merger date through December
21,  2001, amortization of goodwill of $593,480 was recorded, in accordance with
the  provisions of SFAS No. 121.  Amortization ceased beginning in 2002, and, in
accordance  with  the  SFAS  No.  144,  the  Company reviewed for impairment and
determined  that  based  on  the  remaining  value of the assets acquired in the
merger, and projected cash flows, a write-down of $1,480,443 was required.  (See
Notes  1A  and  2S).

Note  5  -  Note  Payable,  Bank:

The  Company  has  a  revolving  bank  line  of  credit  providing for a maximum
borrowing  of  $200,000, due October 31, 2003, 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.

                                      F12
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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,  2002,  the  outstanding amounts,
including accrued interest as applicable, and the contractual interest rates are
as  follows:

<TABLE>
<CAPTION>



Year of              Amount, including                      Contractual
origination          accrued interest                     interest rate
------------          ------------------                 --------------
<S>               <C>                 <C>                <C>
  2000 and prior  $          364,438                         0%
  2000 and prior             357,579                         5%
       2001                  256,786                         8%
       2002                   57,262                         8%
                   -----------------
  Total. . . . .  $        1,036,065
                  ==================
</TABLE>

Principal  and  interest  payments, contractually due on a quarterly basis, have
been deferred with the lender's consent until December 31, 2003, 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  $72,426  in  2002 and $53,899 in 2001, of which $41,493 and $33,514,
respectively,  was  imputed.

Note  7  -  Commitments  and  Contingencies  :

A.     Operating  Leases:

The  Company  leases  its  office  premises  under various operating leases, all
expiring  June  30,  2005.
Future  annual  minimum  rental commitments at December 31, 2002 are as follows:

             2003              $84,000
             2004               87,000
             2005               45,000

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.   See   Notes  12C  and  12D   for  lease  default  and
sub-lease commitment.

Rent  expense  was  $110,908  in  fiscal  2002  and  $110,936  in  fiscal  2001.

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.


                                      F13
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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 $9,324 and
$11,747  for  the  years  ended  December  31,  2002  and  2001,  respectively.

D.     Major  Customers:

The  Company's  largest customers accounted for approximately 56.7% and 33.6% of
total  sales  in 2002 and 2001, respectively.  Sales to the largest customer are
pursuant  to  a  contract,  which  it  may cancel upon thirty days prior written
notice.  This  contract  was  canceled  June  2002.  (See  Note  1B).


     Customer          2002          2001
     --------          ----          ----

     A                 32.9%          33.6%
     B                 23.8             *

     *  -  Less  than  10%

E.     Litigation

In  April 2002, ICS was named as the defendant in a breach of contract complaint
brought  by  a  customer who had ordered  computer equipment pursuant to a fixed
bid.  The  complaint  specifies  damages of $91,052 plus costs.  Management does
not  believe  that  any  significant  loss  to  the  Company  will  result.

VillageWorld.com  is  the  defendant  in  a breach of contract complaint brought
about  by  a  former  customer.  The  claim  is  in the amount of $220,000.  The
Company  has  denied  the  elements  of the complaint and intends to contest the
claims.

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  2001  Conversions:

On January 10th, 22nd, 23rd, February 23rd, 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.


                                      F14
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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.

C.   Fiscal  2002  Conversions:

On  March 21st and December 28th, 2002, a total of 8,943.34 additional shares of
Class  C  Preferred Stock together with accrued preferred dividends thereon were
converted  into  53,281,905 shares of common stock at a discount of 25% from the
average of the closing bid prices for the Company's common stock during the five
trading  days.

Note  9  -  Capital  Stock  Transactions:  Common  Stock:

A.   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 agreed 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.

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  Note  9B).

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).


                                      F15
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

B.   Fiscal  2002  Transactions:

In May of 2002, the Company agreed to satisfy $16,000 of accrued consulting fees
by  the  outright  issuance of 100,000 common shares.  Management determined the
then  fair  value  of  the  Company's  common  stock  to  be  $.16 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 May 14,
2002,  the  Company's  board  of  directors  approved, from the 1998 Performance
Equity  Plan,  the  outright  grant  of  100,000 common shares in payment of the
$16,000 of accrued liability.  The average closing price of the Company's common
stock  for  the  last five days the stock traded in May 2002 was $.16 per share.
This  grant  used  the remaining 100,000 shares/options available under the 1998
Plan.

In  December  of  2002,  the  Company  agreed  to  satisfy  $14,250  of  accrued
professional  fees  and  accrued  liabilities  by the issuance of 475,000 common
shares.  Management determined the then fair value of the Company's common stock
to be $.03 per share and subsequently recommended to the board of directors that
225,000  share  issuance  come from the Company's 2002 Stock Award and Incentive
Plan  and  250,000  shares  issuance  from outside of any plan.  (See Note 11A).

From  March  through  December  of 2002, the Company issued 53,281,905 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  Note  8C).

Note  10  -  Income  Taxes:

There  was  no  provision  for  current or deferred federal and state income tax
expense  (benefit)  for  the  fiscal  years  ending 2002 and 2001, respectively.

At  December  31,  2002, the Company has net operating tax loss carryforwards of
approximately  $3,300,000,  which  are available to offset future taxable income
through  2022.  A  reconciliation of the federal statutory rate to the Company's
effective  tax  rate  for  fiscal  2002  and  2001  is  as  follows:

                                                     2002            2001
                                                     ----            ----
Federal  statutory  rate  at  34%              $   (56,500)     $  (381,000)
     State  taxes,  net  of  federal  benefit            0                0
     Items  providing no carryforward benefit        56,500         381,000
                                               -----------       -----------
     Total                                     $         0      $         0
                                              ===============  =============

                                      F16
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

Note  10  -  Income  Taxes:  -  (continued):

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,  2002  are  as  follows:

     Deferred  tax  assets:
          Net  operating  loss  carryforwards     $  1,027,000
          Valuation  allowance                      (1,027,000)
                                                   ------------
          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 $57,800 in 2002 and $278,100 in
2001.

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.  A  summary  of  activity  in the 1996 Plan for fiscal 2002 and 2001
follows:

<TABLE>
<CAPTION>



                                       2002       Weighted Average        2001       Weighted Average
                                     Shares        Exercise Price        Shares        Exercise Price
                               ---------------   ----------------  -----------------  ----------------
<S>                               <C>             <C>                <C>             <C>
Outstanding at beginning of year          51,780  $            8.22          41,780  $           10.17
Granted during the year. . . . .           8,232               0.26          10,000               0.10
Exercised during the year. . . .               0               0.00               0               0.00
                                  --------------  -----------------  --------------  -----------------
Outstanding at end of year . . .          60,012  $            7.13          51,780  $            8.22
                                  ==============  =================  ==============  =================
Exercisable at end of year . . .          60,012  $            7.13          51,660  $            8.23
                                  ==============  =================  ==============  =================

</TABLE>


                                      F17
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

The  following table summarizes outstanding and exercisable stock options, under
the  1996  Plan  at  December  31,  2002:

<TABLE>
<CAPTION>

           Grant      Number      Weighted Avg.     Number     Expiration
           Date    Outstanding   Exercise Price   Exercisable     Date
          -------  ------------  ---------------  -----------  ----------
<S>       <C>      <C>           <C>              <C>          <C>
          3/31/02.    8,232      $   0.26            8,232      3/31/12
          3/30/01.   10,000          0.10           10,000      3/29/11
          3/31/00.   10,000          2.00           10,000      3/30/10
          3/31/99.    8,000        0.9375            8,000      3/30/09
          4/22/98.      480         3.125              480      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
                      -------  ------------  ---------------

                     60,012 .    $   7.13           60,012
                    ========     =========        =========
</TABLE>

At December 31, 2002, there are no options available for future grants under the
1996  Plan.

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.  In  May 2002, an outright grant of
100,000 common shares was made under the Plan.  At December 31, 2002, there were
100,000  options outstanding, exercisable at $1.00 per share and 100,000 options
outstanding, exercisable at $0.01 per share.  There are no options available for
future  grants  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 30, 2002 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
stockSuch  options are exercisable for a term of ten years at $.26 and $.10 per
share,  respectively.  The  aggregate  fair  value  of such options at the grant
dates were $2,540 in 2002 and $1,000 in 2001, calculated using the Black-Scholes
option  pricing  method,  with  an  expected  life  of five years, no dividends,
volatility  of  197%  and  188%,  respectively, and a risk-free interest rate of
4.88%  and  4.65%,  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 2002 and 2001 on pro
forma  bases  would be $1,732,978 and $1,121,146, respectively, and net loss per
share  would  be  unchanged  at  $.01  in  2002  and  $.01  in  2001.

                                      F18
<PAGE>
                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

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

A.    Stock  Options  -  (continued):

The  Company's  2002  Stock Award and Incentive Plan was adopted and ratified in
June  2002.  The  2002  Plan  provides  for  a  broad range of awards, including
incentive  and non-qualified options, restricted and deferred stock, performance
awards,  stock  appreciation rights and other types of equity awards. A total of
2,000,000  of  shares of Common Stock are reserved and available for grant under
the  2002 Plan. The 2002 Plan carries forward the automatic annual grant of 2000
options  to  each  director  provided  by  the  1996  Plan.

In  December 2002, an outright grant of 225,000 common shares was made under the
Plan.  These  shares  have been deemed issued and outstanding due to the nominal
exercise  price  of  such  options.

In  December  2002,  the  Company  granted  ten year options to purchase 297,000
shares  of  common  stock  at  an  exercise  price  of $.03 per share to various
employees  of  the  Company.

In  December  2002,  the  Company  granted 1,768 ten year options at an exercise
price  of  $.26  per  share  to  the  directors of the Company, as the remaining
portion  of  the  annual  grant  to  each  director.

In  December 2002, the Company made a grant of 250,000 ten year options, outside
of  any  plan,  to two employees of the Company.  These options have an exercise
price  of  $0.03.  These  options have been deemed issued and outstanding due to
the  nominal  exercise  price  of  such  options.

At  December  31,  2002,  a  total of 556,780 options were outstanding under the
above  plans  and the freestanding grant.  Options to purchase 292,000 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
Note  11  B).

In  February 2001 the Company granted ten year options to purchase 25,000 shares
of  common stock at an exercise price of $0.10 per share to various employees of
the  Company.

B.     Warrants:

At  December  31,  2002,  the  following  warrants  were  outstanding:

<TABLE>
<CAPTION>



                                   Shares Reserved      Exercise Price   Expiration Date
                                   ---------------      ---------------  ---------------
<S>                                <C>              <C>              <C>
  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 . . . . . . . . . . . . .          675,667
                                   ===============
</TABLE>

                                      F19
<PAGE>

                     VillageWorld.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                           December 31, 2002 and 2001

Note  12  -  Subsequent  Events  -  (Unaudited):

A.     Proposed  Reverse  Merger:

The  Company,  on  August  8th,  2003, signed a letter of intent to enter into a
reverse merger with a company pursuant to which the Company will exchange 55% of
its  outstanding  shares  for  100%  of  the  outstanding  shares of the merging
company.  The  merging  company  will  become  the  controlling  entity  of  the
surviving  company.  It  is  anticipated that all of Villageworld's subsidiaries
will become independent entities upon completion of the merger.  If the proposed
merger is effected, the merged companies will seek to expand their business with
the  goal  of  returning  to profitability.  Failure of the merger to take place
would  leave  in  question the Company's ability to continue as a going concern.
(See  Note  1B).


B.     Capital  Stock  Transactions:  Common  Stock:

On  February  5th,  2003,  the  Company  made  a stock grant not pursuant to any
Company plan, of 550,000 shares of Common Stock to an employee and consultant of
the  Company.


C.     Lease  Default:

The  landlord has received a judgment on the Company for past due rent, interest
and  all  legal  costs  and  fees  amounting  to  $38,100.

D.     Sub-Lease  Commitment:

The  Company has entered into a verbal sub-lease agreement for one of its office
leases.  The Company is waiting for the sub-lessee's board of directors approval
to  sign  a  sub-lease agreement.  The lease period is form September 1, 2003 to
January  31,  2005,  at  a monthly amount equal to the Company's lease agreement
including  rent,  real  estate  tax  escalations  and  utilities.

                                      F20
<PAGE>