UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
  
 Form
        10-KSB
  (Mark
        One)
 x
              ANNUAL
                  REPORT UNDER SECTION 13
                  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                  1934
  For
        the fiscal year ended December 31, 2001
 o
              TRANSITION
                  REPORT UNDER SECTION
                  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                  1934
  For
        the transition period from 
        to
  Commission
        File Number: 0-24115
  
 WORLDS.COM,
        INC.
 (Name
        of Small Business Issuer in its Charter)
  
 New
                  Jersey
              
              22-1848316(State
                  or Other Jurisdiction of
                incorporation
                  or organization)
              
              (I.R.S.
                  Employer
                Identification
                  No.)
 
 11
        Royal Road, Brookline,
        MA  02445
 (Address
        of Principal Executive Offices)
 
 (617)
        725-8900
 (Issuer’s
        Telephone Number)
  
 Securities
        registered under Section 12(b) of the Act:
 Title
                  of each
                  class
              
              Name
                  of each exchange
                on
                  which
                  registeredNone
              
              Not
                  Applicable
  Securities
        registered under Section 12(g) of the Exchange Act:
  Common
        Stock, $.001 par value
 (Title
        of Class)
 
 Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        15(d) of the Exchange Act. o
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act.):    Yes  o   No  x
  Check
        whether the issuer (1) filed all reports required to be filed by
        Section 13 or 15 (d) of the Exchange Act during the past 12 months (or
        for such shorter period that the registrant was required to file such reports),
        and (2) has been subject to such filing requirements for the past 90 days.
    YesoNox
  Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of the 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. x
  The
        Registrant’s revenues for its fiscal year ended December 31, 2001 were
        $1,461,690.
 
 The
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates of the issuer computed by reference to the price at which
        the
        common equity was sold, or the closing price of such common equity, as of
        March
        4, 2008 (a date within the past 60 days) was approximately
        $9,578,886.
 
 At
        December 31, 2001, the registrant had outstanding 33,830,393 shares of par
        value
        $.001 Common Stock, of which approximately 32,540,393 shares were held by
        non-affiliates.
 
 At
        March
        4, 2008, the registrant had outstanding 49,830,393 shares of par value $.001
        Common Stock, of which approximately 43,540,393 shares were held by
        non-affiliates.
  Transitional
        Small Business Disclosure Format (check one):    oYesxNo
 
 
 CAUTIONARY
        STATEMENT REGARDING FORWARD LOOKING INFORMATION
 
 This
        report includes forward-looking statements within the meaning of Section
        27A of
        the Securities Act of 1933 and Section 21E of the Securities Exchange Act
        of
        1934. These statements involve risks and uncertainties and our actual results
        could differ significantly from those discussed herein. These include statements
        about our expectations, beliefs, intentions or strategies for the future,
        which
        we indicate by words or phrases such as "anticipate," "expect," "intend,"
        "plan," "will," "believe," "estimate" and similar language, including those
        set
        forth in the discussion under "Description of Business," including the "Risk
        Factors" described in that section, and "Management's Discussion and Analysis
        or
        Plan of Operation" as well as those discussed elsewhere in this Form 10-KSB.
        We
        base our forward-looking statements on information currently available to
        us,
        and we believe that the assumptions and expectations reflected in such
        forward-looking statements are reasonable, and we assume no obligation to
        update
        them. Statements contained in this Form 10-KSB that are not historical facts
        are
        forward-looking statements that are subject to the "safe harbor" created
        by the
        Private Securities Litigation Reform Act of 1995.
 
 
  
  TABLE
        OF CONTENTS
 PART
                  IItem 1
              
              Description
                  of
                  Business
              
              3Item 2
              
              Description
                  of
                  Property
              
              10Item 3
              
              Legal
                  Proceedings
              
              10Item 4
              
              Submissions
                  of Matters to a Vote
                  of Security Holders
              
              10PART IIItem 5
              
              Market
                  for Common Equity, Related
                  Stockholder Matters And Small Business Issuer Purchases of Equity
                  Securities
              
              10Item 6
              
              Management’s
                  Discussion and
                  Analysis or Plan of Operation
              
              11Item 7
              
              Financial
                  Statements
              
              13Item 8
              
              Changes
                  in and Disagreements with
                  Accountants on Accounting and Financial Disclosure
              
              22Item 8A
              
              Controls
                  and
                  Procedures
              
              22PART IIIItem 9
              
              Directors,
                  Executive Officers,
                  Promoters and Control Persons; Compliance With Section 16(a) of
                  the
                  Exchange Act
              
              23Item 10
              
              Executive
                  Compensation
              
              24Item 11
              
              Security
                  Ownership of Certain
                  Beneficial Owners and Management
              
              25Item 12
              
              Certain
                  Relationships and Related
                  Transactions
              
              25Item 13
              
              Exhibits,
                  Lists and Reports on
                  Form 8-K
              
              26Item 14
              
              Principal
                  Accountant Fees and
                  Services
              
              27
 
 2
 Table
            of Contents
  INTRODUCTORY
        NOTE
 
 As
        described below, due to a lack of funds we became inactive in mid-2001 and
        were
        dormant for approximately six years. Now, in the first quarter of 2008, we
        have
        the funds to prepare and file all of our historical quarterly and annual
        reports. We caution the reader that although this filing is being made many
        years late, unless otherwise specified, all disclosures are being made as
        of the
        last date of the period covered by this report.
  PART
        I
  ITEM
        1. DESCRIPTION OF BUSINESS.
  General
  Worlds.com
        is a leading 3D entertainment portal which leverages our proprietary technology
        to offer visitors a network of virtual, multi-user environments which we
        call
        "worlds". These worlds are visually engaging online environments featuring
        animation, motion and content where people can come together and, by navigating
        through the website, shop, interact with others, attend events and be
        entertained. In support of this portal and our overall business strategy,
        we
        design and develop software, content and related technology for the creation
        of
        interactive, three-dimensional ("3D") Internet web sites. Using our technology,
        we create our own Internet sites, as well as sites available through third-party
        online service providers.
  Sites
        using our technology allow numerous simultaneous visitors to enter, navigate
        and
        share interactive "worlds". Our 3D Internet sites are designed to promote
        frequent, repeat and prolonged visitation by users by providing them with
        unique
        online communities featuring dynamic graphics, highly useful and entertaining
        information content, and interactive capabilities. We believe that our sites
        are
        highly attractive to advertisers because they offer access to
        demographic-specific user bases comprised of people that visit the site
        frequently and stay for relatively long periods of time.
 
 Recent
        developments
 
 Worlds
        terminated all full time employees in June 2001 and ceased SEC reporting
        as a
        result of the internet market meltdown and an aborted financing the company
        had
        planned for September 2001. The company has continued to maintain its service
        since daily operations ceased as well as continued software development on
        an as
        needed basis and under contract licenses.
 
 While
        the
        company has kept the service up there have been thousands of customer created
        worlds and Avatars developed using Worlds tools and hosted on the members'
        PCs.
  Our
        Opportunity
  A
        growing
        number of people access the Internet as a part of their daily routine. They
        are
        embracing the Internet as a point of access for communications, entertainment
        and shopping. The emergence of broadband delivery capabilities through cable
        modems, such as that provided by Time Warner Cable's Road Runner to its
        residential customers, and other technologies will, we believe, promote even
        greater growth in the use of the Internet and the bandwidth-intensive
        applications that can be delivered across it.
  Existing
        technological barriers typically prevent the delivery of high-quality 3D
        graphics and motion imagery. As a result, most Internet sites are entirely
        two-dimensional with limited graphic and interactive capabilities. Typically,
        in
        order for sites to provide users with high-quality 3D graphics on the Internet,
        such users must have very powerful computers and both the user and site provider
        must have access to high-capacity communications channels for the movement
        of
        the large amount of data that must be delivered to provide 3D motion. Our
        technology, however, circumvents these limitations by delivering a large
        portion
        of the necessary software and data through off-line channels, suchas CDs and CD-ROMs, with only the interactivity
        information being
        transmitted online. This allows almost any home computer with a traditional
        modem to enjoy our interactive 3D sites. We believe that sites that provide
        users with exciting 3D interactivity via the Internet, a sense of community
        and
        attractive online purchasing opportunities will garner user bases that have
        the
        characteristics that appeal to users, sponsors and advertisers.
  Our
        Technology
  We
        use
        our proprietary technology to produce three-dimensional portals and web sites
        for Worlds.com and third parties. We believe that our core technology delivers
        a
        considerably faster frame rate for user experiences and, in some cases, a
        meaningful productivity increase in art production and integration over its
        previous generation production tools. Our technology permits the development
        of
        virtual worlds which have broad applications. These applications include
        but are
        not limited to:
  o
        a
        virtual meeting place (such as a fan club);
  o
        a 3D
        e-commerce store (where merchandise can be viewed in 3D and purchased online);
        and
  o
        a
        virtual classroom (where content can be viewed via video streaming and then
        discussed in real time).
  Our
        core
        technology has substantial elements written in Sun Microsystem's programming
        language, Java, including WorldsBrowser and WorldsShaper, so we expect that
        it
        can be made portable across Windows and UNIX Platforms because of Java's
        platform independence.
  3
 Table
            of Contents
  Our
        core
        technology includes:
  o
              WorldsShaper:
                  WorldsShaper is the visual authoring component of our platform.
                  It allows
                  for quick assembly of pieces to create multi-user, shared state,
                  virtual
                  worlds. The WorldsShaper is an advanced compositing 3D building
                  tool that
                  integrates pre-existing or custom content, such as 3D models, textures
                  or
                  images created in Adobe's Photoshop, or midi or wave sound files,
                  with
                  architectural geometry and interactive behaviors and actions written
                  in
                  Java. The architectural building blocks for creating 3D worlds,
                  the
                  flexibility and power of integrating professional modeling and
                  imaging
                  tools, and the extensibility via Java make the WorldsShaper a tool
                  well-suited for rapid creation of 3D
                  environments.
  o
              WorldsServer:
                  WorldsServer is the scalable software that we use to control and
                  operate
                  our on-line virtual communities. WorldsServer manages the registration
                  and
                  authentication of users, the locations of users within the 3D environment,
                  the physical structure of the 3D environment, all information regarding
                  objects that are "shared" by the participants and any of the interactions
                  between the users such as text chat. This platform also integrates
                  an HTTP
                  server for the delivery of other content such as audio and video
                  streaming
                  and secure e-commerce applications.
  o
              WorldsBrowser:
                  WorldsBrowser is used to access the 3D environments. The browser
                  is
                  optimized for speed, delivering relatively fast frame rates per
                  second in
                  highly textured virtual 3D worlds.
  o
              WorldsPlayer:
                  The WorldsPlayer allows users to view and experience our multi-user,
                  interactive technology. Any world created with the WorldsShaper
                  will be
                  viewable and navigable with the WorldsPlayer. The WorldsPlayer
                  has a high
                  frame rate for fast, quality graphics, an easy-to-use graphic user
                  interface, 2D web browser integration, automatic upgrade capability
                  over
                  the internet and a complete communication tool set including text
                  chat,
                  voice-to-voice chat, e-mail and
                  animation.
  o
              Worlds
                  Gamma Libraries: The Worlds Gamma Libraries are composed of sample
                  worlds,
                  textures, models, avatars, actions, sensors, sounds, motion sequences,
                  and
                  other behaviors.
  Worlds
        Ultimate 3D Chat
  We
        operate a proprietary online 3D Internet chat site known as Worlds Ultimate
        3D
        Chat, an interactive site employing our 3D technology. This site is targeted
        toward the music industry and fans. Our 3D technology enhances users' chat
        experiences by allowing users to see a representation of each other in the
        form
        of highly textured characters, known as avatars, and to explore a 3D environment
        together. Users have the option to create avatars or choose from pre-defined
        figures in our library. Users communicate with each other through text chat,
        as
        well as voice-to-voice chat and can move through the many virtual "worlds"
        of
        the 3D environment.
  The
        user
        moves his or her avatar through these worlds using a mouse or keyboard arrow
        keys and can:
  o
        engage
        other avatars in one-on-one text-based or real voice-to-voice
        discussions;
  o
        enter
        theme-based chat rooms featuring group discussions on numerous music styles,
        specific recording artists and other topics;
  o
        experience interactive advertising and promotions;
  o
        access
        information on various recording artists, concert schedules and other
        music-related and nonmusic-related information;
  o
        view
        new music videos by leading recording artists;
  o
        listen
        to selections from newly released CDs by numerous recording
        artists;
  o
        purchase music and recording artist-related merchandise online; and
  o
        design
        their own unique avatar as a VIP subscriber.
  We
        believe that the user base to the Worlds Ultimate 3D Chat site will develop
        into
        a valuable asset. Worlds Ultimate 3D Chat also contains an e-commerce component,
        which we believe is the first commercial real 3D virtual store online, selling
        music merchandise of various major recording artists.
  In
        order
        to increase the number of potential subscribers to our 3D music sites, we
        offer
        a modified demo version of our Worlds Ultimate 3D Chat product as a free
        download. By reducing the price barrier, we hope to generate new members
        to our
        Chat service. The proliferation of Worlds Ultimate 3D Chat may also increase
        corporate brand identity that could translate into valuable consumer data
        and
        related advertising potential.
  We
        believe that there is an opportunity to further exploit the Worlds Ultimate
        3D
        Chat product in modified form. We are now exploring the modification of Worlds
        Ultimate 3D Chat as a corporate Intranet chat and information service for
        corporate clients. The modified application of Worlds Ultimate 3D Chat, if
        successfully modified and then marketed, could provide us with an ongoing
        revenue stream based on the licensing fees for our server technology, as
        well as
        a per employee annual subscription fees.
  Our
        Strategy
  Our
        goal
        is to become a leading provider of interactive 3D Internet sites where
        entertainment content, interactive chat and e-commerce opportunities converge
        to
        provide communities for users and advertisers. Keys to achieving our goal
        are:
  §
              Producing
                  interactive multimedia music-related 3D sites. We believe that
                  music
                  readily lends itself to exploitation through web sites utilizing
                  our
                  technology. Music is a universal theme that appeals to all people
                  and
                  accordingly, music-based sites, such as Worlds Ultimate 3D Chat,
                  have the
                  capability of drawing a wide range of users. We also believe that
                  the
                  highly graphic, interactive nature of sites using our technology
                  appeals
                  to users drawn to music-based sites, differentiates such sites
                  from other
                  non-3D music-based sites and thereby encourages repeat visitation.
                  Because
                  our technology allows for the creation of multiple worlds accessible
                  from
                  a web site, it allows such sites to segregate users of different
                  tastes
                  and demographics. For example, the various worlds of Worlds Ultimate
                  3D
                  Chat is expected to focus on specific categories of music
                  including:
  o
              alternative;
 o
              jazz;
 o
              rock;
 o
              pop;
 o
              country;
                  and
 o
              hip-hop.
  §
              Creating
                  effective offline distribution partnerships with recording artists
                  and
                  their record companies. We seek to enter into alliances with recording
                  artists and their record companies by which we gain access to the
                  excess
                  capacity on their music CDs to distribute our Worlds Ultimate 3D
                  Chat and
                  other software. CDs utilizing such excess capacity in this or a
                  similar
                  manner are commonly referred to as CD+ or enhanced CDs. We believe
                  that
                  the distribution of music on these types of CDs is an attractive
                  alternative to recording artists and their record companies as
                  it creates
                  opportunities for them to expand the sale of their music through
                  differentiation of their CDs, creates a new channel of distribution
                  for
                  the sale of products related to the artists, and aids in the promotion
                  of
                  the artists in general.
  §
              Creating
                  Brand Identity for Worlds.com. Public awareness of our site and
                  products
                  is critical to our success. We seek to build this awareness by
                  entering
                  into co-branding arrangements with other high-profile Internet
                  companies
                  and music companies. We plan to market Worlds Ultimate 3D Chat
                  and our
                  other products through online and other efforts. Ultimately, we
                  seek to
                  build a reputation as a leader in 3D technology and content for
                  the
                  Internet. Our success in promoting our brand also will depend on
                  our
                  success in providing high-quality products and services and a high-level
                  of customer satisfaction.
  §
              Creating
                  Other Services Using Our Interactive 3D Technology. In addition
                  to Worlds
                  Ultimate 3D Chat, we seek to create other marketable products and
                  services
                  based on our technology. We have created 3D sites and/or related
                  3D
                  content for other enterprises, including British Telecom and Road
                  Runner.
  §
              Pursuing
                  Alliances and Cross Promotional Opportunities. Our strategy for
                  expanding
                  brand recognition through online advertising depends to some extent
                  on our
                  relationships with our distribution and content partners. We have
                  entered
                  into strategic alliances with several leading enterprises and regularly
                  seek additional opportunities to provide our 3D Internet technology
                  and
                  content to other companies for their use in connection with the
                  marketing
                  and delivery of their own products and services.
  4
 Table
            of Contents
  Representative
        alliances and customers
  We
        have
        established strategic relationships and/or provided 3D content related services
        to the following entities, among others:
  Time
        Warner Cable's Road Runner
  In
        1999,
        we entered into an agreement with Road Runner to create Road Runner/Worlds.com,
        a co-branded area on the Road Runner service. In March 2001, we renewed this
        agreement. Road Runner is a high-speed online service owned by Time Warner
        Cable. Our agreement with Road Runner permits all Road Runner subscribers
        to
        participate in an entirely new, interactive online experience. The co-branded
        area we created highlights the latest technology in the Road Runner music
        channel. In March 2001, Road Runner launched a one-month advertising campaign
        on
        all Time Warner Cable affiliate cable stations in the United States to promote
        AerosmithWorld by Worlds.com and Aerosmith's new CD.
  Aerosmith
  In
        January 2001, we entered into a revenue sharing agreement with Aerosmith
        to
        create and operate an official 3D Aerosmith environment entitled "Aerosmith
        World" and to redesign Aerosmith's official website, which currently resides
        at
        www.Aerosmith.com. We plan to begin to offer memberships to "Aerosmith
        interactive", which gives subscribers access to advance ticket sales and
        exclusive merchandise and discounts. "Aerosmith World" is currently available
        for download from www.Worlds.com.
  British
        Telecommunications
  In
        June
        2000, we entered into an agreement with British Telecommunications plc pursuant
        to which we are to provide co-branded 3D web sites featuring our interactive
        worlds to users of British Telecommunications' Internet service. We will
        share
        with British Telecommunications revenues derived from VIP subscription and
        e-commerce activities generated through these sites aswell as
        advertising revenues. In February 2001, as part of this Agreement, British
        Telecommunications launched its first 3D virtual reality Internet site,
        developed by Worlds.com.
  Competition
  The
        markets in which we currently operate and those we intend to enter are
        characterized by intense competition and an increasing number of new market
        entrants which have developed or are developing competitive products. We
        will
        face competition from numerous sources, including prospective customers which
        may develop and market their own competitive products and services, software
        companies, and online and Internet service providers. We believe that
        competition will be based primarily on ease of use, price and features,
        including communications capabilities and content.
  In
        addition, certain companies have developed or may be expected to develop
        technologies or products in related market segments which could compete with
        certain technologies or products we have or are developing. We expect that
        such
        companies, as well as other companies including established and newly formed
        companies, may attempt to develop products that will be in direct competition
        with ours. Many of our competitors have advantages over us, including:
  o
        longer
        operating histories and greater financial, technical, marketing and other
        resources;
  o
        a wider
        range of services and financial products;
  o
        greater
        name recognition and larger customer bases;
  o
        more
        extensive promotional activities; and
  o
        cooperative relationships among themselves and with third parties to enhance
        services and products.
  Many
        of
        our competitors in this market have adopted VRML and VRML 2.0 scene description
        language as their file format and have limited their expertise and scope
        to only
        one of the above categories. VRML is an early industry attempt to provide
        standard protocols for 3D Internet experiences. Currently, there are many
        companies collaborating to establish standardization of the Virtual Reality
        Modeling Language for 3D usage on the Internet, the adoption of which may
        require changes to our technology. If we fail to recognize or address the
        need
        for new service or product introductions our business and financial condition
        could be materially adversely affected. Competitors may develop superior
        technology or determine as a group to adopt standards with which our technology
        is not compatible.
  Many
        companies now compete with us in one way or another and new ones may emerge
        in
        the future. The competition may be through entry into the same markets, or
        through technology that either obviates our advantages or lowers the barrier
        to
        entry in one of our markets. The markets in which we compete are characterized
        by rapid changes in technology and customer requirements, frequent new service
        and product introductions and evolving industry standards which could result
        in
        product obsolescence or short product life cycles. Accordingly, our ability
        to
        compete will be dependent upon our ability to develop and successfully introduce
        new products into the marketplace in a timely manner and to continually enhance
        and improve our technology to meet the increasingly sophisticated and varied
        needs of our users and prospective users.
  Intellectual
        Property
  U.S.
        Patents: Worlds has been granted U.S patent 6,219,045 for multi-server
        technology for 3D applications, which is Worlds' core technology.  We
        are now looking into the implications and breadth of the patent in order
        to
        maximize its benefits to Worlds.  The description of the patent is as
        follows:
 
 "The
        present invention provides a highly scalable architecture for a three
        dimensional, multi-user, interactive virtual world system.  In a
        preferred embodiment a plurality of users interact in the three-dimensional,
        computer-generated graphical space where each user executes a client process
        to
        view a virtual world from the perspective of that user.  The virtual
        world shows Avatars representing the other users who are neighbors of the
        user
        viewing the virtual world.  In order that the view can be updated to
        reflect the motion of the remote user's Avatar, motion information is
        transmitted to a central server process that provides position updates to
        client
        processes for neighbors of the user at that client process.  The
        client process also uses an environment database to determine which background
        objects to render as well as to limit the number of displayable Avatars to
        a
        maximum number of Avatars displayable by that client."
 
 Trademark:
        Worldsplayer - The WorldsPlayer is especially designed to allow users to
        view
        and experience the multi-user, interactive Worlds Gamma technology. Any world
        created with the WorldsShaper will be viewable and navigable with
        WorldsPlayer.  Utilizing the WorldsPlayer, a user assumes a persona
        (via a digital actor, or Avatars), and can then move, view, chat, play, express
        one's self via gestures and animations, voice chat, send email, join discussion
        groups, listen to music, shop at Worlds 3D stores, and watch videos, all
        in the
        company of users from around the world, within the 3D
        environment.  The WorldsPlayer boasts high frame rate for fast, high
        quality graphics, an easy to use graphic user interface, seamless 2D Web
        browser
        integration, auto-upgrade capability over the Internet, and a complete
        communication tool set including chat, voice-to-voice chat, email and animation.
        The WorldsPlayer offers users the unique and creative experience of customizing
        their Avatars, while maintaining the ability to animate and activate their
        Avatars.
  We
        have a
        patent and a trademark and we intend to enter into confidentiality agreements
        with key employees and consultants to protect our IP and general
        know-how.
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            of Contents
  Employees
  As
        of
        December 31, 2001, we had 0 full time employees.Our
        president, Thomas Kidrin, devotes such of his time as necessary to keep our
        servers maintained and operating for the continued use of our
        members.
  Corporate
        History
  We
        were
        formed as a result of the contemporaneous mergers on December 3, 1997 of
        Worlds
        Inc., a Delaware corporation formed on April 26, 1994 with and into Worlds
        Acquisition Corp., a Delaware corporation formed on April 8, 1997 and of
        Worlds
        Acquisition Corp. with and into Academic Computer Systems, Inc., a New Jersey
        corporation formed on May 20, 1968 (the "Mergers"). Academic Computer Systems
        changed its name to Worlds Inc. after the Mergers. In December 1999, we changed
        our name from Worlds Inc. to Worlds.com Inc. in order to better reflect our
        business as a consumer Internet web site that offers virtual "worlds" in
        which
        consumers interact, conduct e-commerce and receive entertainment.
  RISK
        FACTORS
  Our
        business is subject to numerous risks, including but not limited to those
        set
        forth below. Our operations and performance could also be subject to risks
        that
        do not exist as of the date of this report but emerge hereafter as well as
        risks
        that we do not currently deem material.
  Risks
        related to our operations
  Our
        auditors have expressed doubt about our ability to continue as a going concern.
        If we do not generate substantial revenue from our new relationships and
        are
        also unable to obtain capital from other resources, we will significantly
        curtail our operations or halt them entirely.
  Our
        capital requirements for the development and commercialization of our
        technology, creation of our 3D sites and our general operations have been
        and
        will continue to be significant. Historically, we have been dependent on
        financings to fund our development and working capital needs. As of December
        31,
        2001, we had only nominal cash and cash equivalents. We believe that our
        existing capital resources, together with the minimal cash revenue generated
        by
        our revenue sharing agreements with Aerosmith, British Telecom, Time Warner
        Cable and certain private label agreements, will be sufficient to allow us
        to
        survive in 2002, albeit with drastically reduced operations. However, we
        have
        experienced a default by a material existing customer, e-New Media, on its
        obligations to us. Our relationship with another existing client, FreeServe,
        has
        been significantly reduced. This relationship had previously provided us
        with
        material revenues. We therefore do not expect to generate significant revenues
        from our prior relationships with e-New Media and Freeserve in the future.
        Accordingly, if we do not develop any new projects, we would have to continue
        to
        severely diminish our operations or halt them entirely. The opinion of our
        auditors contains an explanatory paragraph regarding our ability to continue
        as
        a going concern.
  We
        have experienced relatively large losses during our development and, without
        significant increases in the market penetration of our services and improvements
        to our operating margins, we will not achieve profitability.
  Since
        inception, we have incurred significant net losses as set forth in the financial
        information included elsewhere in this report. We anticipate that we will
        continue to incur significant losses for at least the short-term. We will
        not
        achieve profitable operations until we successfully attract and retain a
        significant number of advertisers to and users of our 3D sites and customers
        for
        our other services and generate revenues from these sources that are sufficient
        to offset the substantial up-front expenditures and operating costs associated
        with developing and commercializing our services. We may never be able to
        accomplish these objectives.
  It
        will be difficult for you to evaluate us based on our past performance because
        we are a relatively new company with a limited operating history.
  We
        have
        been engaged in the commercial sale of our 3D Internet-based services for
        a
        relatively short period of time and, accordingly, have only limited financial
        results on which you can evaluate our company and operations. We are subject
        to,
        and have not been successful in addressing, the risks typically encountered
        by
        new enterprises and companies operating in the rapidly evolving Internet
        marketplace, including those risks relating to:
  o
        the
        failure to develop brand name recognition and reputation;
  o
        the
        failure to achieve market acceptance of our services;
  o
        a slow
        down in general consumer acceptance of the Internet as a vehicle for commerce;
        and
  o
        an
        inability to grow and adapt our business and technology to evolving consumer
        demand.
  We
        may not be able to successfully compete in our markets, which are characterized
        by intense competition and the presence of large competitors and rapidly
        changing technology.
  Given
        our
        relatively limited resources, we have not been able to effectively compete
        in
        our target markets. These markets are characterized by intense competition,
        rapidly changing technology and increasing numbers of new market entrants
        who
        have developed or are developing potentially competitive products and services,
        often resulting in product obsolescence or short product life cycles. Our
        competitors include other enterprises utilizing 3D-based technology for online
        entertainment and marketing purposes, online and Internet service providers,
        online shopping malls, online direct music retailers, online music and book
        sites and traditional music retailers. Most of our competitors have
        significantly greater financial and operating resources compared to Worlds.com
        Our ability to compete will be dependent on our ability to enhance and upgrade
        our technology platform in a timely manner and to effectively offer our target
        customers attractive and exciting 3D content and services, all of which require
        the expenditure of funds that we do not have. In addition, the very companies
        with which we do business, such as the larger Internet service providers
        and
        record labels, may determine to create and distribute their own 3D Internet
        sites.
  We
        may not be able to develop and maintain marketing relationships with other
        Internet companies.
  Our
        strategy for expanding brand recognition through online advertising depends
        to
        some extent on our relationship with other Internet companies. We regularly
        seek
        to enter into marketing agreements with these companies that will permit
        us to
        advertise our products and services on their web pages. There can be no
        assurance that we will be able to negotiate these agreement on favorable
        terms
        or at all. Additionally, other e-commerce and music-related sites whichadvertise on popular web sites may have
        exclusive advertising
        relationships with such sites or may otherwise object to our attempts to
        enter
        into marketing agreements or relationships with such sites. If we cannot
        secure
        or maintain these marketing agreements on favorable terms, our business
        prospects could be substantially harmed. For example, we recently modified
        our
        relationship with Freeserve such that while we will continue to receive valuable
        brand exposure working together with Freeserve, we will not provide certain
        services that have historically generated significant revenues for
        us.
  6
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            of Contents
  Our
        limited resources may restrict our ability to manage any growth we may
        experience.
  Growth
        of
        our business may place a significant strain on our management systems and
        resources and may require us to implement new operating and financial systems,
        procedures and controls. Our failure to manage our growth and expansion could
        adversely affect our business, results of operations and financial condition.
        Moreover, our present technology backbone may not be adequate to accommodate
        rapid growth in user demand. Our inability to add additional hardware and
        software to upgrade our existing technology or network infrastructure to
        accommodate increased traffic may cause decreased levels of customer service
        and
        satisfaction. Failure to implement new systems effectively or within a
        reasonable period of time could adversely affect our business, results of
        operations and financial condition.
  In
        addition to our own technology, we use the technology of others in the creation
        of our products.
  Although
        our proprietary technology is the foundation of our products, we also use
        the
        technology of other companies in the creation and delivery of our products.
        Accordingly, any delay or termination by any of these third-party providers
        in
        the provision of their technologies to us because our failure or perceived
        inability to pay such vendors or otherwise could cause a disruption in the
        commercial distribution of our own products. Further, any material increases
        in
        the prices these providers charge us for use of their technologies could
        force
        us to increase the prices we charge for our own products or possibly make
        the
        creation and distribution of our products no longer economically feasible
        or
        desirable. We cannot assure you that any of these companies will continue
        to
        provide their technology to us in an efficient, timely and cost-effective
        manner. An interruption in or termination in our access to any necessary
        third
        party technologies, and our subsequent inability to make alternative
        arrangements in a timely manner, if at all, would have a material adverse
        effect
        on our business and financial condition.
  We
        are dependent, in part, on the sale of our services to foreign customers,
        and
        accordingly, are subject to the risks of doing business
        internationally.
  We
        seek
        to market and provide our service both in the United States and internationally.
        Servicing our foreign clients and marketing our services abroad requires
        the
        dedication of significant management and financial resources, which we currently
        do not have. Our international operations are, and will be, subject to a
        variety
        of risks associated with conducting business internationally, many of which
        are
        beyond our control. Operating internationally subjects us to risks relating
        to
        the following areas:
  o
        expenses associated with customizing products for foreign
        countries;
  o
        political and economic instabilities;
  o
        potentially adverse tax consequences and regulatory requirements;
  o
        uncertainty of product acceptance by different cultures;
  o
        dependence on local partners who may not be able to meet the needs of a growing
        international market;
  o
        greater
        difficulty in accounts receivable collection and longer collection
        periods;
  o
        difficulties and costs of staffing and managing foreign operations;
  o
        unexpected changes in regulatory requirements related to the Internet;
        and
  o
        limited
        or unfavorable intellectual property protection.
  The
        market may not readily accept our products.
  Demand
        and market acceptance for new products, such as our 3D chat, are subject
        to a
        high level of uncertainty. The successful introduction of any new product
        requires a focused, efficient strategy to create awareness of and desire
        for the
        products. For example, in order to achieve market acceptance for our Worlds
        3D
        chat sites, we will need to educate the members of the music industry, such
        as
        record companies, record labels and recording artists, about the marketing
        benefits this product could provide them. Similarly, we will have to make
        music
        buyers and Internet consumers aware of this product's existence, draw users
        to
        the site and compel them to return to the site for repeat
        visitations.
  Our
        marketing strategy may be unsuccessful and is subject to change as a result
        of a
        number of factors, including changes in market conditions (including the
        emergence of market segments other than music which in our judgment can be
        readily exploited through the use of our technology), the nature of possible
        license and distribution arrangements and strategic alliances which may become
        available to us in the future and general economic, regulatory and competitive
        factors. There can be no assurance that our strategy will result in successful
        product commercialization or that our efforts will result in initial or
        continued market acceptance for our proposed products.
  If
        we are unable to protect our intellectual property rights, competitors may
        be
        able to use our technology or trademarks, which could weaken our competitive
        position.
  In
        addition to our patents, we rely on a combination of copyright, trademark
        and
        trade secret laws and restrictions on disclosure to protect our intellectual
        property rights. We also enter into confidentiality or license agreements
        with
        our employees, consultants and customers, and control access to and distribution
        of our software, documentation and other proprietary information. Despite
        our
        efforts to protect our proprietary rights, unauthorized parties may attempt
        to
        copy or otherwise obtain and use our products or technology, particularly
        in
        foreign countries where the laws may not protect our proprietary rights as
        fully
        as in the United States. Although we have never been involved in any
        intellectual property litigation, we could become a party to litigation in
        the
        future to protect our intellectual property or as a result of alleged
        infringement of others' intellectual property. These claims and any resulting
        lawsuits could subject us to significant liability for damages and invalidation
        of our proprietary rights.
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  We
        are subject to the risks associated with fluctuations in the sales of
        prerecorded music and related products.
  The
        recorded music industry has experienced an overall slowdown during the late
        1990s relative to the early 1990s, a trend which is expected to continue.
        During
        the mid-1990s, several of the country's largest record store chains and many
        independent music shops either declared bankruptcy or went out of business
        as
        sales of prerecorded music experienced this slowdown. Industry analysts suggest
        several causes for this trend, including a glut of products on the market.
        In
        addition, each recording is an individual artistic work, and its commercial
        success is primarily determined by consumer taste, which is unpredictable
        and
        constantly changing. Generally, in the record industry, prerecorded music
        is
        shipped to wholesalers and/or retailers on a returnable basis. Accordingly,
        there can be no assurance as to the financial success of any particular release,
        the timing of such success or the popularity of any particular artist. There
        can
        be no assurance that any of the prerecorded music producers, artists or
        distributors that may use our technology or our sites will be able to generate
        any significant revenue through such use or, if they do, that such revenue
        will
        be sufficient to recoup costs.
  If
        we lose any of our key personnel or fail to hire and retain other talented
        employees, our operations could be harmed.
  Our
        success is dependent, in part, on the personal efforts of Thomas Kidrin,
        our
        chief executive officer. We do not currently have an employment agreement
        with
        Mr. Kidrin, although, we maintain "key-man" insurance on his life in the
        amount
        of $1,000,000. The loss of Mr. Kidrin's services could have a material adverse
        effect on our business and prospects. Our success is also dependent upon
        our
        ability to hire and retain additional qualified management, marketing,
        technical, financial, and other personnel. Competition for qualified personnel
        is intense and we may not be able to hire or retain additional qualified
        personnel. Any inability to attract and retain qualified managementand other personnel would have a material
        adverse effect on our
        business and operations.
  In
        order to be successful, we must be able to enhance our existing technology
        and
        products and develop and introduce new products and services to respond to
        changing market demand.
  The
        markets in which we operate are characterized by frequently changing customer
        demand and the introduction of new technologies. In order to be successful,
        we
        must be able to enhance our existing technology and products and develop
        and
        introduce new products and services to respond to changing market demand.
        The
        development and enhancement of services and products entails significant
        risks,
        including:
  o
        the
        inability to effectively adapt new technologies to our business;
  o
        the
        failure to conform our services and products to evolving industry
        standards;
  o
        the
        inability to develop, introduce and market service and product enhancements
        or
        new services and products on a timely basis; and
  o
        the
        nonacceptance by the market of such new service and products.
  We
        currently do not have the resources to enhance our technology or to develop
        new
        products.
  Our
        future results depend on continued evolution of the Internet.
  Our
        future results depend on continued growth in the use of the Internet for
        information, publication, distribution and commerce. Our growth is also
        dependent on increasing availability to residential consumers of broadband
        Internet access which will allow such persons to access higher-capacity content
        through the Internet. Our business could suffer if Internet usage and broadband
        availability does not continue to grow and evolve.
  In
        addition, changes in network infrastructure, transmission and content delivery
        methods and underlying software platforms, and the emergence of new Internet
        access, such as television set-top boxes, could dramatically change the
        structure and competitive dynamic of the market for Internet realtime 3D
        products. We may not be able to adopt our technology and services for use
        in
        connection with other emerging technologies.
  The
        recent downturn in stock prices of Internet companies may continue.
  Stock
        prices of many Internet companies have fallen drastically over the past several
        months. With this fall, many investors have grown reluctant to invest in
        Internet companies until this downturn reverses itself. Other investors have
        lost confidence in the Internet as a money-making medium and have removed
        their
        investments in Internet companies. If investors do not regain confidence
        in the
        Internet and this downturn does not change, more and more people may become
        dissatisfied with Internet companies and choose to invest in other more stable
        areas of commerce.
  We
        may not be able to economically comply with any new government regulation
        that
        may be adopted with respect to the Internet.
  New
        Internet legislation or regulation, or the application of existing laws and
        regulations to the Internet and e-commerce could add additional costs and
        risks
        to doing business on the Internet. We are subject to regulations applicable
        to
        businesses generally and laws or regulations directly applicable to
        communications over the Internet and access to e-commerce. Although there
        are
        currently few laws and regulations directly applicable to e-commerce, it
        is
        possible that a number of laws and regulations may be adopted with respect
        to
        the Internet, covering issues such as user privacy, pricing, content,
        copyrights, distribution, antitrust, taxation and characteristics and quality
        of
        products and services.
  8
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            of Contents
  Legislation
        regarding privacy of personal information about users may affect our
        communities.
  We
        are
        subject to and must comply with data protection legislation which restricts
        our
        ability to collect and exploit users' personal data. Our business is
        particularly dependent on the existing and future data protection laws in
        Europe, the United States and in each specific country where we operate.
        European data protections legislation is drafted in very broad terms, and
        there
        are few sources of guidance as to its interpretation. It is difficult to
        foresee
        the extent to which its enforcement by relevant authorities will restrict
        our
        operations. We believe that a rigid interpretation of data protection
        legislation could hinder our ability to conduct our business as planned.
        Our
        failure to comply with applicable law could subject us to severe legal sanctions
        which could have a material adverse effect on our business and results of
        operations. We maintain a privacy policy which is to not disclose individually
        identifiable information about any user of our products or services to a
        third
        party without the user's consent. Despite this policy, however, if third
        persons
        were able to penetrate our network security or otherwise misappropriate users'
        personal information, we could be subject to liability claims.
  We
        face potential liability for the content delivered over our sites.
  While
        we
        intend to acquire all licenses and other rights necessary to conduct our
        business without violating any copyrights, there can be no assurance that
        we
        will be able to do so. Due to the nature of our business, we could become
        involved in litigation regarding the music, video and other content transmitted
        over our sites which could force us to incur significant legal defense costs,
        could result in substantial damage awards against us and could otherwise
        damage
        our brand name and reputation.
  In
        addition, because music materials may be downloaded from our sites and may
        be
        subsequently distributed to others, claims could be made against us for
        "pirating" and copyright or trademark infringement. Claims could also be
        made
        against us if material deemed inappropriate for viewing by children is accessed
        or accessible through our sites. While we carry insurance policies, our
        insurance may not cover these types of claims or may not be otherwise adequateto cover liability that may be imposed.
        Any partially or
        completely uninsured claim against us, if successful and of sufficient
        magnitude, would have a material adverse effect on us.
  Risks
        related to our common stock
  Possible
        issuances of our capital stock would cause dilution to our existing
        shareholders.
  While
        we
        currently have approximately 33,830,393 shares of common stock outstanding,
        we
        are authorized to issue up to 65,000,000 shares of common stock. Therefore,
        we
        will be able to issue a substantial number of additional shares without
        obtaining shareholder approval. In the event we elect to issue additional
        shares
        of common stock in connection with any financing, acquisition or otherwise,
        current shareholders could find their holdings substantially diluted, which
        means they will own a smaller percentage of our company.
  Certain
        shareholders control a substantial portion of our outstanding common
        stock.
  Our
        executive officers, directors and principal shareholders own a significant
        portion of the outstanding shares of our common stock. Additionally, Steven
        Chrust, our former chairman of the board, may be issued an additional 6,913,958
        shares of our common stock and an aggregate of 2,163,911 additional shares
        may
        be issued to various other officers, directors and employees of ours upon
        conversion of the notes and exercise of the warrants purchased in our private
        placement in January 2001. Accordingly, these persons, acting together, will
        be
        able to influence the election of our directors and thereby influence or
        direct
        our policies.
  No
        dividends have been paid on our common stock.
  To
        date,
        we have not paid any cash dividends on our common stock and we do not expect
        to
        declare or pay dividends on the common stock in the foreseeable future. In
        addition, the payment of cash dividends may be limited or prohibited by the
        terms of any future loan agreements.
  We
        are subject to "penny stock" regulations which may adversely impact the
        liquidity and price of our common stock.
  Our
        common stock is deemed a "penny stock." Penny stocks generally are equity
        securities with a price of less than $5.00 (other than securities registered
        on
        certain national securities exchanges or quoted on the Nasdaq system). The
        penny
        stock rules require a broker-dealer, prior to a transaction in a penny stock
        not
        otherwise exempt from the rules, to deliver a standardized risk disclosure
        document that provides information on penny stocks and the nature and level
        of
        risks in the penny stock market. The broker-dealer also must provide the
        customer with current bid and offer quotations for the penny stock, the
        compensation of the broker-dealer and its salesperson in the transaction,
        and if
        the broker-dealer is the sole market-maker, the broker-dealer must disclose
        this
        fact and the broker-dealer's presumed control over the market, and monthly
        account statements showing the market value of each penny stock held in the
        customer's account. In addition, broker-dealers who sell such securities
        to
        persons other than established customers and accredited investors (generally,
        those persons with assets in excess of $1,000,000 or annual income exceeding
        $200,000 or $300,000 together with their spouse), the broker-dealer must
        make a
        special written determination that the penny stock is a suitable investment
        for
        the purchaser and receive the purchaser's written agreement to the
        transaction.
  These
        requirements could reduce the level of trading activity, if any, in the
        secondary market for our common stock. As a result of the foregoing, our
        shareholders may find it more difficult to sell their shares.
  The
        exercise or conversion of outstanding options and warrants into common stock
        will dilute the percentage ownership of our other shareholders. The sale
        of such
        common stock or other common stock in the open market could adversely affect
        the
        market price of our common stock.
  There
        are
        outstanding options and warrants to purchase an aggregate of approximately
        6,904,000 shares of our common stock and more options may be granted in the
        future under our employee benefit plans. In addition, if the full amount
        of the
        notes sold by us in our January 2001 private placement are converted pursuant
        to
        the terms of the notes, we will be required to issue an additional 17,964,644
        shares of common stock. Substantially all of the shares of common stock issuable
        upon conversion or exercise of these securities are or are expected to be
        registered for resale under the Securities Act. The exercise or conversion
        of
        outstanding stock options, warrants or other convertible securities will
        dilute
        the percentage ownership of our other shareholders. In addition, the majority
        of
        our currently outstanding shares of common stock have been registered for
        sale
        under the Securities Act, are eligible for sale underan
        exemption from the registration requirements or are subject to registration
        rights pursuant to which holders may require us to register such shares in
        the
        future. Sales or the expectation of sales of a substantial number of shares
        of
        our common stock in the public market, including shares of our common stock
        issuable upon exercise or conversion of our stock options or warrants, could
        adversely affect the prevailing market price of our common
        stock.
  9
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  ITEM
        2. DESCRIPTION OF PROPERTIES.
 
 We
        do not
        own any property nor do we have any contracts or options to acquire any property
        in the future. Presently, we are operating out of offices in our president's
        residence in 11 Royal Road, Brookline, Massachusetts 02445, where we occupy
        approximately 800 square feet.  This space is adequate for our present
        and our planned future operations. We pay no rent to our president for use
        of
        this space. In addition we have no written agreement or formal arrangement
        with
        our president pertaining to the use of this space. No other businesses operate
        from this office. We have no current plans to occupy other or additional
        office
        space.
  ITEM
        3. LEGAL PROCEEDINGS.
  In
        Cosmo
        Communications v. Worlds, Inc. (our predecessor) in the Superior Court Of
        New
        Jersey Law Division, Bergen County, the court rendered a decision in favor
        of
        the plaintiff, Cosmo Communications on February 13, 2001. The judgment amount
        entered on March 20, 2001, is approximately $205,000 of which $205,000 is
        accrued. The judgment related to a consulting agreement for raising capital.
        The
        court ruled that the terms of the contract are binding on successors of the
        company and that Worlds.com is a successor company. We have appealed the
        decision.
  ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  None.
  PART
        II
  ITEM
        5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
  Our
        common stock began trading on the OTC Bulletin Board on October 20, 1998
        under
        the symbol "WLDI." On February 11, 2000, in connection with the change in
        our
        name from Worlds Inc. to Worlds.com Inc., our symbol was changed to "WDDD".
        During 2001, our stock was no longer quoted on the OTC Bulletin Board and
        was
        quoted on the Pink Sheets. The following table sets forth, for the periods
        indicated, the high and low bids for our common stock as reported on the
        OTC
        Bulletin Board or the Pink Sheets (representing interdealer quotations, without
        retail mark-ups, mark-downs or commissions, and may not necessarily represent
        actual transactions):
  Year
                Ended December 31, 2001:
              
              High
              
              Low3/31/2001
              
              $
              0.53
              
              $
              0.066/30/2001
              
              $
              --
              (1)
              $
              --
              (1)9/30/2001
              
              $
              --
              (1)
              $
              --
              (1)12/31/2001
              
              $
              --
              (1)
              $
              --
              (1)Year
                Ended December 31, 2000:
              
              High
              
              Low3/31/2000
              
              $
              6.88
              
              $
              2.256/30/2000
              
              $
              6.38
              
              $
              1.139/30/2000
              
              $
              2.13
              
              $
              0.6912/31/2000
              
              $
              0.75
              
              $
              0.05
  (1) 
        We are unable to obtain information for these periods, but believe the price
        hovered around $0.01 with very modest trading.
  Holders
  As
        of
        December 31, 2001, we had 595 shareholders of record, and as of March 4,
        2008,
        we had 610 shareholders of record of our common stock.
  Dividends
  We
        have
        never paid a dividend on our common stock and do not anticipate paying any
        dividends in the near future.
  Recent
        Sales of Unregistered Securities
  In
        January 2001, we consummated a private placement of units, each unit consisting
        of a $50,000 principal amount 6% convertible promissory note and a warrant
        to
        purchase 50,000 shares of our common stock. We sold 37.6 units at a per-unit
        price of $50,000 for aggregate proceeds of $1,880,000, of which $1,345,000
        was
        paid in cash and $535,000 was paid by converting certain of our outstanding
        debt
        and other obligations. If the full amount of notes and warrants sold by us
        in
        the private placement are converted and exercised pursuant to their respective
        terms, we would be required to issue an additional 19,844,644 shares of our
        common stock.
  Steven
        G.
        Chrust, our former chairman of the board of directors, purchased 13.1 units
        in
        the private placement, of which $255,000 was invested in cash and $400,000
        was
        invested through the conversion of existing outstanding obligations of
        Worlds.com owed to Mr. Chrust, including $250,000 pursuant to the terms of
        a
        convertible negotiable promissory note evidencing Mr. Chrust's prior loan
        to us
        on November 8, 2000 ("Chrust Note"). Pursuant to the Chrust Note, we and
        Mr.
        Chrust were required to convert all of the unpaid principal amount then due
        into
        securities being sold in our next offering grossing net proceeds of at least
        $500,000. In addition, Mr. Chrust agreed to forfeit warrants to purchase
        375,000
        shares of the our common stock which were issued to him in connection with
        the
        Chrust Note. Other officers, directors and employees of Worlds.com ("Insiders")
        purchased an additional 4.4 units, of which $205,000 was invested in cash.
        Of
        the 19,844,644 shares of common stock issuable upon conversion of the notes
        and
        exercise of the warrants, 6,913,958 shares would be issued to Mr. Chrust
        and an
        aggregate of 2,163,911 would be issued to the Insiders.
  10
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  ITEM
        6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF
        OPERATIONS.
 
 Forward
        Looking Statements
 
 When
        used
        in this form 10-KSB and in future filings by the Company with the Commission,
        The words or phrases such as "anticipate," "believe," "could," "estimate,"
        "expect," "intend," "may," "plan," "predict," "project," "will" or similar
        expressions are intended to identify “forward-looking statements”
within  the meaning of the Private Securities Litigation Reform Act of
        1995.  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 earnings
        and those presently anticipated or projected. The Company has no obligation
        to
        publicly release the result of any revisions which may be made to any
        forward-looking statements to reflect anticipated or unanticipated events
        or
        circumstances occurring after the date of such statements.
 
 These
        forward-looking statements involve known and unknown risks, uncertainties
        and
        other factors that may cause actual results to be materially different. These
        factors include, but are not limited to, changes that may occur to general
        economic and business conditions; changes in current pricing levels that
        we can
        charge for our services or which we pay to our suppliers and business partners;
        changes in political, social and economic conditions in the jurisdictions
        in
        which we operate; changes to regulations that pertain to our operations;
        changes
        in technology that render our technology relatively inferior, obsolete or
        more
        expensive compared to others; foreign currency fluctuations; changes in the
        business prospects of our business partners and customers; increased
        competition, including from our business partners; delays in the delivery
        of
        broadband capacity to the homes and offices of persons who use our services;
        general disruptions to Internet service; and the loss of customer faith in
        the
        Internet as a means of commerce.
 
 The
        following discussion should be read in conjunction with the financial statements
        and related notes which are included under Item 7.
 
 We
        do not
        undertake to update our forward-looking statements or risk factors to reflect
        future events or circumstances.
 
 Overview
 
 General
 
 Worlds.com
        was a leading 3D entertainment portal which leveraged our proprietary technology
        to offer visitors a network of virtual, multi-user environments which we
        call
        "worlds". These worlds are visually engaging online environments featuring
        animation, motion and content where people can come together and, by navigating
        through the website, shop, interact with others, attend events and be
        entertained.
 
 Sites
        using our technology allow numerous simultaneous visitors to enter, navigate
        and
        share interactive "worlds". Our 3D Internet sites are designed to promote
        frequent, repeat and prolonged visitation by users by providing them with
        unique
        online communities featuring dynamic graphics, highly useful and entertaining
        information content, and interactive capabilities. We believe that our sites
        are
        highly attractive to advertisers because they offer access to
        demographic-specific user bases comprised of people that visit the site
        frequently and stay for relatively long periods of time.
 
 Starting
        in mid-2001 we were not able to generate enough revenue to sustain operations
        and other sources of capital were not available. We have had to significantly
        curtail our operations and at times halt them all together.
  Revenues
 
 We
        generated very little revenue during the year as we had to significantly
        curtail
        operations since mid-2001.  The revenue that was generated was
        generated in the following manner:
 
 o
              the
                  production of 3D promotion sites for third
                  parties;
 o
              VIP
                  subscriptions to our Worlds Ultimate 3-D Chat
                  service;
 o
              development,
                  licensing and operation of 3D chat;
                  and/or
 o
              entertainment
                  sites for third parties;
 
 Expenses
 
 We
        classify our expenses into two broad groups:
 
 o
              cost
                  of revenues; and
 o
              selling,
                  general and administration.
 
 During
        the year our operations gradually petered out until they became minimal during
        the latter half of the year.
 
 Liquidity
        and Capital Resources
 
 We
        have
        had to severely diminish our operations in 2001 due to a lack of
        liquidity.  We will continue to operate in this manner until we find
        an additional source of capital. We have no current arrangements with respect
        to, or sources of, additional financing and there can be no assurance that
        any
        such financing would become available.  We may need to completely halt
        all operations.
 
 
 RESULTS
        OF OPERATIONS
 
 Our
        net
        revenues for each of the fiscal years ended December 31, 2001 and 2000 were
        $1,461,690 and $1,408,518, respectively.  We entered into a content
        supply agreement to provide customized websites using our 3D technology.
        Under
        the terms of the agreement we received $500,000 upon signing the agreement
        in
        1999, $633,342 during 2000 and $55,547 in 2001. The payments were being
        amortized over the life of the website or as earned based on the agreement.
        In
        March 2001 we learned that the websites under the agreement were being
        terminated. As a result of this termination, these non-refundable payments
        have
        been recognized as revenue in the amount of $834,722 in the period ending
        March
        31, 2001.  Revenue for the twelve months ended December 31, 2001
        without this revenue is $626,968.
 
 Management
        believes that this decrease was due to the deteriorating internet market,
        which
        led our customers to stop their internet expansions plans which included
        our
        worlds.  This resulted in no significant revenue which created a
        liquidity problem.  The business is running in a severely diminished
        mode and may cease to operate due to this lack of liquidity.
 
 11
 Table
            of Contents
  Fiscal
        year ended December 31, 2001 compared to fiscal year ended December 31,
        2000
 
 Revenue
        increased by $53,172, to $1,461,690 for the fiscal year ended December 31,
        2001
        from $1,408,518 in the prior year.  As noted above $834,723 of the
        increase is due to a customer terminating their agreement with us resulting
        in
        revenue from non-refundable payments.  Without this revenue from the
        terminated contract revenue from operations would have decreased by $781,550
        or
        55%.  Due to the deteriorating internet market, our customers have
        stopped their internet expansions plans which included our
        worlds.   The business is running in a severely diminished mode
        and may have to cease all operations.  We expect minimal operating
        results until such time that the market for internet related products rebounds
        and we can raise additional capital to provide the resources required to
        generate sales.
 
 Our
        cost
        of revenues during the twelve months ended December 31, 2001 and 2000 are
        primarily comprised of (1) cost of goods sold and (2) selling general and
        administrative expenses.  Cost of sales on a consolidated basis
        decreased $501,328, or 66%, to $256,229 for the twelve months ended December
        31,
        2001, from $757,557 in the twelve months ended December 31, 2000. The
        primary reason for this decrease was due to our customers canceling their
        contracts forcing us to severely cut back on operations in 2001.
 
 Selling
        general and administrative expenses was $3,333,164 for the fiscal year ended
        December 31, 2001.  For the fiscal year ended December 31, 2000
        selling general and administrative expenses was $9,506,606 for a reduction
        of
        $6,173,442 or 65%.  Reduction in expenses is due to very limited
        marketing and advertising in 2001 in contrast to the major marketing campaign
        we
        ran in 2000 and because of the collapse of "dot coms" and its impact on
        companies operating in the internet market we had to severely cut back on
        all
        expenses during the year and at times had to halt operations.
 
 Other
        expenses include interest expense of $902,156 directly attributable to the
        notes
        payable, offering expenses of $208,880 relating to the round of financing
        in the
        first quarter and a write down on the disposal of inventory of $52,727 due
        to
        the cancellation of contracts in the twelve months ended December 31,
        2001.  Interest expense in the twelve months ended December 31, 2000
        was $149,237.  Other income includes interest income of $6,061 for the
        twelve months ended December 31, 2001 compared to $84,973 for the twelve
        months
        ended December 31, 2000.
 
 As
        a
        result of the foregoing we incurred a net loss of $3,285,405 for the fiscal
        year
        ended December 31, 2001, compared to a loss of $8,919,909 in the fiscal year
        ended December 31, 2001.
 
 Liquidity
        and Capital Resources
 
 Our
        financial and liquidity position remained weak as exhibited by our cash,
        cash
        equivalents, short-term marketable securities and marketable equity securities
        of $5,888 at December 31, 2001.  Cash, cash equivalents,
        short-term marketable securities and equity securities was $38,101 at December
        31, 2000.  This decrease of $32,213 was the net result of cash used in
        operating activities.  The cash flows used in investing activities
        were $90,404 due primarily to the addition to software development costs.
        The
        cash flows from financing activities were $1,250,000 attributable to proceeds
        from sale of convertible notes. As explained above, our significantly decreased
        loss is not the result of major cost savings or operating efficiencies, but
        rather is directly attributable to our significantly reduced
        operations.
 
 Historically,
        our primary cash requirements have been used to fund the cost of operations,
        development of our products and patent protection, with additional funds
        having
        been used in promotion and advertising and in connection with the exploration
        of
        new business lines.
 
 We
        have
        had to severely diminish our operations due to a lack of
        liquidity.  We will attempt to continue to operate in this manner
        until we find an additional source of capital. We have no current arrangements
        with respect to, or sources of, additional financing and there can be no
        assurance that any such financing would become available.  We may need
        to completely halt all operations.
  12
 Table
            of Contents
  ITEM
        7. FINANCIAL STATEMENTS.
  Bongiovanni
&
        Associates, PA
 Certified
        Public
        Accountants
  CONTENTSREPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              14BALANCE
                  SHEET
              17STATEMENTS
                  OF OPERATIONS
              18STATEMENTS
                  OF CASH FLOWS
              19STATEMENT
                  OF STOCKHOLDERS’ DEFICIT
              20NOTES
                  TO FINANCIAL STATEMENTS
              21-22
  
 13
 Table
            of Contents
 REPORT
          OF
          INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
 
 Board
          of
          Directors
 Worlds.com
          Inc.
 
 We
          have
          audited the accompanying balance sheet of Worlds.com Inc. (the "Company")
          as of
          December 31, 2000, and the related statements of operations, stockholders'
          equity (deficit) and cash flows for the year ended December 31, 2000. These
          financial statements are the responsibility of the Company's management.
          Our
          responsibility is to express an opinion on these financial statements based
          on
          our audit.
 
 We
          conducted our audit in accordance with auditing standards generally accepted
          in
          the United States of America. Those standards require that we plan and
          perform
          the audit 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 audit provides a reasonable
          basis
          for our opinion.
 
 In
          our
          opinion, the financial statements referred to above present fairly, in
          all
          material respects, the financial position of Worlds.com Inc. at December
          31,
          2000, and the results of it operations and its cash flows for the year
          ended
          December 31, 2000, in conformity with accounting principles generally
          accepted
 in
          the
          United States of America.
 
 As
          more
          fully discussed in Note 2, the accompanying financial statements have been
          prepared assuming Worlds.com Inc. will continue as a going concern. The
          Company
          was in the development stage during 1999, has incurred significant losses
          since
          its inception, has had minimal revenues from operations, has an
 accumulated
          deficit, a working capital deficiency, a significant customer recently
          terminated its content supply agreement and the Company will require substantial
          additional funds for development and marketing of its products.
 
 These
          matters raise substantial doubt about its ability to continue as a going
          concern. The financial statements do not include any adjustments that might
          result from the outcome of this uncertainty.
 
 /s/
          Grant Thornton LLP
 GRANT
          THORNTON LLP
 
 
 New
          York,
          New York
 March
          30,
          2001
  14
  BONGIOVANNI
        & ASSOCIATES, PA
 
 REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
        the
        Board of Directors and
 Stockholders
        of Worlds.com, Inc.
 
 We
        have
        audited the accompanying balance sheet of Worlds.com, Inc. (the “Company”) as of
        December 31, 2001 and related statements of operations, stockholders’ deficit,
        and cash flows for the year ending December 31, 2001. These financial statements
        are the responsibility of the company’s management. Our responsibility is to
        express an opinion on these financial statements based on our
        audit.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Worlds.com, Inc. (a New Jersey
        corporation) as of December 31, 2001 and the results of its operations and
        its
        cash flows for year ended December 31, 2001 in conformity with accounting
        principles generally accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming the Company
        will
        continue as a going concern. The Company has suffered recurring operating
        losses, has an accumulated deficit, has had minimal revenues from operations,
        and has yet to generate an internal cash flow that raises substantial doubt
        about its ability to continue as a going concern. Management's plans in regard
        to these matters are described in Note 2. The financial statements do not
        include any adjustments that might result from the outcome of this
        uncertainty.
 
 /s/Bongiovanni
        & Associates, PA
 Bongiovanni
        & Associates, PA
 Cornelius,
        North Carolina
 January
        10, 2008
 
 15
 Table
            of Contents
  Worlds.com,
                  Inc.
                Balance
                  Sheets
                As
                  of
                  December 31, 2001Current
                AssetsCash
                and cash equivalents
              
              5,888Accounts
                recievablePrepaid
                ExpensesInventoryTotal
                Current Assets
              
              
              
              5,888Property,
                equipment software dev net ofaccumulated
                depreciation
              
              
              -TOTAL
                ASSETS
              
              
              
              5,888Current
                LiabilitiesAccounts
                payable
              
              
              1,145,796Accrued
                expenses
              
              
              679,414Deferred
                Revenue
              
              
              698,887Current
                maturities notes payable
              
              2,181,212Total
                Current Liabilities
              
              
              
              4,705,308Stockholders
                Equity (Deficit)Common
                stock
              
              
              33,824Additional
                Paid in Capital
              
              
              20,146,723Accumulated
                Deficit
              
              
              (24,879,967)Total
                stockholders deficit
              
              
              (4,699,420)Total
                Liabilities and stockholders deficit
              5,888The
                  accompanying notes are an integral part of these financial
                  statements.


16
 Table
              of Contents
 Words.com,
                  Inc.
                Statements
                  of Operations
                For
                  the
                  years ended December 31, 2001 and 20002001
              
              
              2000RevenuesRevenue
              
              
              626,968
              
              
              
              1,408,518Revenue
                from terminated
                contracts
              
              
              834,722
              
              
              
              -Total
              
              
              
              1,461,690
              
              
              
              1,408,518Cost
                  and
                  ExpensesCost
                of Revenue
              
              
              256,229
              
              
              
              829,554Selling
                General &
                Admin
              
              
              3,333,163
              
              
              
              9,434,609Operating
                loss
              
              
              (2,127,702
              )
              
              
              (8,855,645
              )Other
                  Income
                  ExpenseInterest
                Income
              
              6,061
              
              
              
              84,973Interest
                Expense
              
              
              902,156
              
              
              
              149,237Offering
                Expense
              
              
              208,880
              
              
              
              -Loss
                on disposal
              
              
              52,727
              
              
              
              -Net
                  Loss
              
              
              
              (3,285,405
              )
              
              
              (8,919,909
              )The
                  accompanying notes are an
                  integral part of these financial
                  statements.
  17
 Table
            of Contents
  Words.com,
                  Inc
                Statements
                  of Cash Flows
                For
                  the
                  years ended December 31, 2001 and 20002001
              
              
              2000Cash
                flows from operating
                activitiesNet
                Income/(loss)
              
              
              (3,285,405
              )
              
              
              (8,919,909
              )Adjustments
                to reconcile
                net loss to net cash usedin
                operating
                activitiesDepreciation
                and
                amortization
              
              
              1,381,826
              
              
              
              1,484,519Accretion
                of deferred
                revenue
              
              
              (774,639
              )
              
              
              (437,184
              )Inventory
                and intangible asset
                valuationallowance
              
              
              -
              
              
              
              459,866Bad
                debts
                allowance
              
              
              -
              
              
              
              60,000Consulting
                expense related to
                theissuance
                of stock
                options
              
              
              165,000
              
              
              
              197,695Interest
                expense on beneficial conversionfeature
                in private
                placement
              
              
              746,381
              
              
              
              -Issuance
                of shares for
                inventory
              
              
              -
              
              
              
              68,000Placement
                fee
                and bonus expense paidwith
                convertible
                notes
              
              
              95,000
              
              
              
              -Changes
                in operating assets and
                liabilitiesAccounts
                receivable
              
              
              205,346
              
              
              
              (88,131
              )Prepaid
                expenses and other current
                assets
              
              
              290,238
              
              
              
              (176,942
              )Inventories
              
              
              136,705
              
              
              
              (15,194
              )Other
                assets
              
              
              -
              
              
              
              (66,014
              )accounts
                payable and accrued
                expenses
              
              
              (154,648
              )
              
              
              1,457,673Deferred
                revenue
              
              
              -
              
              
              
              778,760Net
                cash used in
                operating activities
              
              
              (1,194,197
              )
              
              
              (5,196,861
              )Cash
                flows from investing
                activitiesAcquisition
                of property and
                equipment
              
              
              -
              
              
              
              (112,155
              )Addition
                to software development
                costs
              
              
              (90,404
              )
              
              
              (568,521
              )Net
                cash used in investing
                activities
              
              
              (90,404
              )
              
              
              (680,676
              )Cash
                flows from financing
                activitiesProceeds
                from sale of convertible
                notes
              
              
              1,250,000
              
              
              
              -Proceeds
                from sale of
                common stock inprivate
                offering
                memorandium
              
              
              -
              
              
              
              3,708,958Proceeds
                from
                exercise of options-
              
              
              
              135,500Proceeds
                from note
                payable
              
              
              -
              
              
              
              250,000Net
                Cash provided
                from financing activities
              
              
              1,250,000
              
              
              
              4,094,458Net
                increase(decrease) in
                cash
              
              
              (34,601
              )
              
              
              (1,783,079
              )Cash
                beginning of
                period
              
              
              40,489
              
              
              
              1,821,180Cash
                end of
                period
              
              
              5,888
              
              
              
              38,101Supplemental
                disclosure of cash
                flow information:Cash
                paid during the year
                forInterest
              
              
              -
              
              
              
              -Income
                taxes
              
              
              -
              
              
              
              -The
                  accompanying notes are an
                  integral part of these financial statements.




18




Worlds.com,
                    Inc.
                    Statement
                      of
                      Stockholders' Equity
                      Period
                        from
                        January 1, 2000 to December 31, 2001TotalAdditional
                
                stockholders'Common
                    stock
                Common
                    stock
                Paid-in
                Accumulated
                equityShares
                Amount
                capital
                Deficit
                (deficit)Balances,
                    January 1,
                    2000
                17,738,531
                $         17,738
                $    13,634,725
                $
                    (12,674,652)
                $         977,811Exercise
                    of stock
                    options
                215,000
                215
                135,285
                
                135,500Sale
                    of shares in private
                    placement, net
                976,597
                977
                3,242,981
                
                3,243,958Issuance
                    of stock options for
                    consulting and advertising
                
                
                138,231
                
                138,231Sale
                    of shares in private
                    placement, net
                142,049
                142
                464,858
                
                465,000Issuance
                    of shares for
                    inventory
                32,000
                32
                67,968
                
                68,000Adjustment
                    to capitalize software
                    for options
                
                
                (200,000)
                
                (200,000)Issuance
                    of shares for content
                    supply agreement
                100,000
                100
                143,650
                
                143,750Issuance
                    of stock options for
                    consulting services
                
                
                34,464
                
                34,464Issuance
                    of stock options for
                    consulting services
                
                
                25,000
                
                25,000Net
                    loss for the year ended
                    December 31, 2001
                
                
                
                (8,919,909)
                (8,919,909)Balances,
                    December 31,
                    2000
                19,204,177
                $         19,204
                $    17,687,162
                $
                    (21,594,561)
                $      (3,888,195)Issuance
                    of warrants in private
                    placement(January
                    2001)
                
                
                206,800
                
                206,800Beneficial
                    conversion feature
                    relatingto
                    issuance of convertible debt andwarrants
                    in private placement (January 2001)
                
                
                572,381
                
                572,381Issuance
                    of shares for convertible
                    notes(January
                    and February 2001)
                14,620,164
                14,620
                1,515,380
                
                1,530,000Issuance
                    of options for
                    consultingservices
                    (February 2001)
                
                
                165,000
                
                165,000Net
                    loss for the year ended
                    December 31, 2001
                
                
                
                (3,285,405)
                (3,285,405)Balances,
                    December 31,
                    2001
                33,824,341
                $         33,824
                $    20,146,723
                $
                    (24,879,966)
                $      (4,699,419)The
                    accompanying notes are an
                    integral part of these financial
                    statements.


19
 Table
              of Contents
 Worlds.com
        Inc.
 NOTES
        TO
        FINANCIAL STATEMENTS
 Year
        Ended December 31, 2001
  NOTE
        1 –
DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
 
 Description
        of Business
 
 Worlds.com
        Inc. (the "Company") designs and develops software content and related
        technologies for the creation of interactive, three-dimensional ("3D") Internet
        sites on the World Wide Web. Using in-house technology the Company creates
        its
        own Internet sites, as well as sites available through third party on-line
        service providers.
 
 Basis
        of
        Presentation
 
 The
        accompanying financial statements have been prepared in conformity with
        accounting principles generally accepted in the United States of America
        ("US
        GAAP"), which contemplates continuation of the Company as a going concern.
        The
        Company has always been considered a developmental stage business, has incurred
        significant losses since its inception and has had minimal revenues from
        operations.  The Company will require substantial additional funds for
        development and marketing of its products. There can be no assurance that
        the
        Company will be able to obtain the substantial additional capital resources
        necessary to pursue its business plan or that any assumptions relating to
        its
        business plan will prove to be accurate. The Company has not been able to
        generate sufficient revenue or obtain additional financing which has had
        a
        material adverse effect on the Company, including requiring the Company to
        severely diminish operations and at times halting them entirely. These factors
        raise substantial doubt about the Company's ability to continue as a going
        concern.  The Company has been operating at a significantly reduced
        capacity with no full time employees performing primarily consulting services
        and licensing software using consultants to perform any work that may be
        required.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with US GAAP requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosures of contingent assets and liabilities
        at
        the date of the financial statements and the reported amounts of revenues
        and
        expenses during the reporting period. Actual results could differ from these
        estimates.
 
 Cash
        and
        Cash Equivalents
 
 Cash
        and
        cash equivalents are comprised of highly liquid money market instruments,
        which
        have original maturities of three months or less at the time of
        purchase.
  Income
        Recognition
 
 The
        Company has the following sources of revenue: (1) consulting/licensing revenue
        from the performance of development work performed on behalf of the Company
        or
        from the sale of certain software to third parties; (2) VIP subscriptions
        to our
        Worlds Ultimate 3-D Chat service. Deferred revenue represents cash payments
        received in advance to be recorded as licensing revenue as earned.
 Income
        Taxes
 
 The
        Company uses the liability method of accounting for income taxes in accordance
        with SFAS No. 109, "Accounting for Income Taxes." Deferred income tax assets
        and
        liabilities are recognized based on the temporary differences between the
        financial statement and income tax bases of assets, liabilities and net
        operating loss carry forwards using enacted tax rates. Valuation allowances
        are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized.
  Commitments
        and Contingencies
 
 During
        2000 the Company was involved in a lawsuit relating to unpaid consulting
        services. On March 20, 2001 a judgment against the Company was rendered for
        approximately $205,000.  As of December 31, 2001 the Company recorded
        a reserve of $205,000 for this lawsuit, which is included in accrued expenses
        in
        the accompanying balance sheet.
  Impairment
        of Long Lived Assets
 
 The
        Company reviews the carrying value of long-lived assets to determine if
        circumstances exist indicating whether there has been any impairment of the
        carrying value of property and equipment or whether the depreciation periods
        should be modified.  Long-lived assets are reviewed for impairment
        whenever events or changes in business circumstances indicate that the carrying
        value of the assets may not be fully recoverable.  The Company as of
        the date of the financial statements has no long lived assets.
 
 20
 Table
            of Contents
  Worlds.com
        Inc.
 NOTES
        TO
        FINANCIAL STATEMENTS
 Year
        Ended December 31, 2001
  NOTE
        2 -
        GOING CONCERN
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. Since its inception, the Company has had
        minimal revenues from operations. There can be no assurance that the Company
        will be able to obtain the substantial additional capital resources necessary
        to
        pursue its business plan or that any assumptions relating to its business
        plan
        will prove to be accurate. The Company is pursuing sources of additional
        financing and there can be no assurance that any such financing will be
        available to the Company on commercially reasonable terms, or at all. Any
        inability to obtain additional financing will have a material adverse effect
        on
        the Company, including possibly requiring the Company to significantly curtail
        or cease operations.
 
 These
        factors raise substantial doubt about the ability of the Company to continue
        as
        a going concern. The financial statements do not include any adjustments
        that
        might result from the outcome of this uncertainty.
 
 NOTE
        3 –
DEFERRED REVENUE
 
 Deferred
        revenue represents advance payments for the license, the design and development
        of the software, content and related technology for the creation of an
        interactive, three-dimensional ("3D") entertainment portal on the
        internet.
 
 NOTE
        4 -
        REVENUE FROM TERMINATED CONTRACT
 
 The
        Company entered into a content supply agreement to provide customized websites
        using the Company's 3D technology. Under the terms of the agreement the Company
        received $500,000 upon signing the agreement in 1999, $633,342 during 2000
        and
        $55,547 in 2001. The payments were being amortized over the life of the website
        or as earned based on the agreement. In March 2001 the Company learned that
        the
        websites under the agreement were being terminated. As a result of this
        termination, these non-refundable payments have been recognized as revenue
        in
        the amount of $834,722 in the period ending December 31, 2001.
 
 NOTE
        5 -
        NOTES PAYABLE
 
 Short-term
        debt at December 31, 2001 consists of the following:
 
 The
        Company has promissory notes payable due to four shareholders. The principal
        amounts are, $124,230, $635,642, $631,950 and $350,000 with interest accruing
        at
        8% per annum, 10% per annum 5% per annum, and 6% per annum respectively.
        The
        principal amounts plus all accrued interest are past due.
 
 As
        part
        of a debt refinancing in 2000, $631,950 of debt was renegotiated to deferred
        revenue representing future services to be provided by the Company.
 
 21
 Table
            of Contents
  ITEM
        8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE
 
 On
        September 5, 2007 we signed an engagement letter with Bongiovanni &
Associates, P.A. to become our independent accountant to audit our financial
        statements.  Inasmuch as we have not filed any annual or quarterly
        reports since the first quarter of 2001, the engagement contemplates the
        filing
        of all unfiled quarterly and annual reports since such date.  Prior to
        such engagement, we have not consulted our new auditors on any substantive
        issue
        with respect to our financial statements.  The last time our
        financial statements were audited was for our fiscal year ended December
        31,
        2000.  Our independent auditor at that time was Grant Thornton LLP. We
        did not have any disputes with Grant Thornton LLP over accounting principles
        or
        practices, financial statement disclosure or auditing scope or
        procedure.  Grant Thornton LLP has not provided any services to us for
        more than six years.
  Item 8A.
        Controls and Procedures.
 
 We
        maintain disclosure controls and
        procedures designed to ensure that information required to be disclosed in
        reports filed under the Securities Exchange Act of 1934 (“Exchange Act”) is
        recorded, processed, summarized and reported within the specified time periods.
        Our Chief Executive Officer and our Principal Accounting and Financial Officer
        (collectively, the “Certifying Officers”) are responsible for maintaining our
        disclosure controls and procedures. The controls and procedures established
        by
        us are designed to provide reasonable assurance that information required
        to be
        disclosed by the issuer in the reports that it files or submits under the
        Exchange Act is recorded, processed, summarized and reported within the time
        periods specified in the Commission’s rules and forms.
  During
        the first quarter of 2008, the
        Certifying Officers evaluated the effectiveness of our disclosure controls
        and
        procedures. Based on the evaluation, the Certifying Officers concluded that
        our
        disclosure controls and procedures were effective to provide reasonable
        assurance that information required to be disclosed by us in the reports
        that we
        file or submit under the Exchange Act is recorded, processed, summarized
        and
        reported, within the time periods specified in the applicable rules and forms,
        and that it is accumulated and communicated to our management, including
        the
        Certifying Officers, as appropriate to allow timely decisions regarding required
        disclosure.
  The
        Certifying Officers have also
        concluded, based on our evaluation of our controls and procedures that as
        of
        December 31, 2001, our internal controls over financial reporting are effective
        and provide a reasonable assurance of achieving their objective.  This
        conclusion is based upon the fact that we are currently able to prepare this
        Report based upon records that that had been gathered and stored over the
        intervening years.  The fact that we have not timely filed any Reports
        for many years is due to a lack of financial resources and not our controls
        and
        procedures.
  The
        Certifying Officers have also
        concluded that there was no change in our internal controls over financial
        reporting identified in connection with the evaluation that occurred during
        our
        fourth fiscal quarter that has materially affected, or is reasonably likely
        to
        materially affect, our internal control over financial reporting.
  22
 Table
            of Contents
  PART
        III
  ITEM
        9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
  The
        following table sets forth the name, age and position of our sole director
        and
        executive officers. Our director is elected annually and serves until the
        next
        annual meeting of stockholders.
  Name
              Age
              PositionThomas
                  Kidrin
              49
              President,
                  Chief Executive Officer, Secretary, Treasurer, DirectorChristopher
                  J. Ryan
              47
              Vice
                  President- Finance, Principal accounting and finance
                  officer
  Thomas
        Kidrin has been president, chief executive officer, secretary and treasurer
        since December 1997. Mr. Kidrin was also president and a director of Worlds
        Acquisition Corp. from April 1997 to December 1997. He has been the chairman
        and
        president of Datastream Corporation, a designer and developer of interactive
        products and services, since 1993. Since October 1999, Mr. Kidrin has also
        served as a director of EMT Corporation, which is engaged in the development
        and
        marketing of an interactive web-browser with user customized features focused
        on
        affinity online marketing. From December 1991 to June 1996, Mr. Kidrin was
        a
        founder, director, and President of UC Television Network Corp., a company
        engaged in the design and manufacture of interactive entertainment/advertising
        networks in the college market under the brand name College Television Network,
        the largest private network on college campuses in the United States. Mr.
        Kidrin
        is a graduate of the New School of Social Research.
  Christopher
        J. Ryan has been Vice President- Finance since May 2000 and principal accounting
        and finance officer since August 2000. From August 1991 through April 2000,
        Mr.
        Ryan held a variety of financial management positions at Reuters America,
        an
        information services company. Mr. Ryan is a certified public accountant.
        He is a
        graduate of Montclair State College in New Jersey and received an M.B.A.
        degree
        from Fordham University in New York.
 
 Family
        Relationships.
  None.
 
 Legal
        Proceedings.
 
 No
        officer, director, or persons nominated for such positions and no promoter
        or
        significant employee has been involved in legal proceedings that would be
        material to an evaluation of our management.
 
 Audit
        Committee
 
 We
        do not
        have a separately designated standing audit committee. Pursuant to Section
        3(a)(58)(B) of the Exchange Act, the entire Board of Directors acts as an
        audit
        committee for the purpose of overseeing the accounting and financial reporting
        processes, and audits of our financial statements. The Commission recently
        adopted new regulations relating to audit committee composition and functions,
        including disclosure requirements relating to the presence of an "audit
        committee financial expert" serving on its audit committee. In connection
        with
        these new requirements, our Board of Directors examined the Commission's
        definition of "audit committee financial expert" and concluded that we do
        not
        currently have a person that qualifies as such an expert. We currently have
        only
        minimal operations, and we are not in a position at this time to attract,
        retain
        and compensate additional directors in order to acquire a director who qualifies
        as an "audit committee financial expert", but we intend to retain an additional
        director who will qualify as such an expert, as soon as reasonably practicable.
        While our current director does not meet the qualifications of an "audit
        committee financial expert", by virtue of his past employment experience,
        he has
        considerable knowledge of financial statements, finance, and accounting,
        and has
        significant employment experience involving financial oversight
        responsibilities. Accordingly, we believe that our current director capably
        fulfills the duties and responsibilities of an audit committee in the absence
        of
        such an expert.
 
 Code
        of
        Ethics
 
 We
        have
        adopted a code of ethic (the "Code of Ethics") that applies to our principal
        chief executive officer, principal financial officer, principal accounting
        officer or controller, or persons performing similar functions A draft of
        the
        Code of Ethics is filed herewith as Exhibit 14.1 hereto. The Code of Ethics
        is
        being designed with the intent to deter wrongdoing, and to promote the
        following:
 
 *
              Honest
                  and ethical conduct, including the ethical handling of actual or
                  apparent
                  conflicts of interest between personal and professional
                  relationships
 *
              Full,
                  fair, accurate, timely and understandable disclosure in reports
                  and
                  documents that a small business issuer files with, or submits to,
                  the
                  Commission and in other public communications made by the small
                  business
                  issuer
 *
              Compliance
                  with applicable governmental laws, rules and
                  regulations
 *
              The
                  prompt internal reporting of violations of the code to an appropriate
                  person or persons identified in the
                  code
 *
              Accountability
                  for adherence to the code
  23
 Table
            of Contents
 
 Section
        16(a) Beneficial Ownership Reporting Compliance
  Under
        Section 16(a) of the Exchange Act, all executive officers, directors, and
        each
        person who is the beneficial owner of more than 10% of the common stock of
        a
        company that files reports pursuant to Section 12 of the Exchange Act, are
        required to report the ownership of such common stock, options, and stock
        appreciation rights (other than certain cash-only rights) and any changes
        in
        that ownership with the Commission. Specific due dates for these reports
        have
        been established, and we are required to report, in this Form 10-KSB, any
        failure to comply therewith during the fiscal year ended December 2001. We
        believe that all of these filing requirements were satisfied by its executive
        officers, directors and by the beneficial owners of more than 10% of our
        common
        stock. In making this statement, we have relied solely on copies of any
        reporting forms received by us, and upon any written representations received
        from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial
        Ownership) was required to be filed under applicable rules of the
        Commission.
  ITEM
        10. EXECUTIVE COMPENSATION.
  The
        following table sets forth the compensation paid by us during the fiscal
        periods
        ending December 31, 1999, 2000 and 2001, to our chief executive officer and
        to
        our other most highly compensated executive officers whose compensation exceeded
        $100,000 for those fiscal periods.
  SUMMARY
                  COMPENSATION TABLE (1)(2)Name
                  and principal position
                (a)
              Year
                (b)
              
              Salary
                  ($)
                (c)
              
              
              Bonus
                  ($)
                (d)
              
              
              Stock
                  Awards ($)
                (e)
              
              
              Option
                  Awards ($)
                (f)
              
              
              Securities
                  Underlying Options ($)
                (g)
              
              
              All
                  Other Compensation ($)
                (i)
              
              
              Total
                  ($)
                (j)Thomas
                  Kidrin
                President
                  and Chief Executive Officer
              2001
              
              
              40,000
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              40,0002000
              
              
              175,000
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              270,000
              (3)
              
              
              0
              
              
              
              445,0001999
              
              
              176,000
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              176,000
  We
        have
        not entered into any other employment agreements with our employees, Officers
        or
        Directors. We have no standard arrangements to compensate our directors for
        their services to us.
  (1)
        The
        above compensation does not include other personal benefits, the total value
        of
        which do not exceed the lesser of $50,000 or 10% of such person's or persons'
        cash compensation.
  (2)
        Pursuant to the regulations promulgated by the SEC, the table omits columns
        reserved for types of compensation not applicable to us.
  (3)
        Represents options to purchase 125,000, 25,000, 25,000 and 95,000 shares
        of our
        common stock at $5.68, $6.00, $9.00 and $2.00 per share,
        respectively.
  Employment
        Agreements
  We
        currently do not have a written employment agreement with Thomas Kidrin,
        our
        president, chief executive officer, and principal accounting and financial
        officer.
  We
        do not
        have a written employment agreement with Steven Chrust, our former chairman
        of
        the board. However, we have entered into a three-year financial advisory
        and
        consulting agreement, dated March 23, 1999, with SGC Advisory Services, Inc.,
        of
        which Mr. Chrust is the president and sole shareholder. The agreement provides
        for an annual fee of $120,000. In the event that we raise $5 million in cash
        from investors and the market value of our issued and outstanding common
        stock
        is at least $100 million, the annual fee will be raised to $300,000. At the
        time
        of execution of the agreement, SGC was granted immediately exercisable warrants
        to purchase 1,000,000 shares of our common stock at $5.00 per
        share.
  1997
        Stock Option Plan and Other Options
  The
        1997
        incentive and non-qualified stock option plan, as amended, has been adopted
        by
        the board and the shareholders as an incentive for, and to encourage share
        ownership by our directors, officers and other key employees and consultants
        and
        management of possible future acquired companies. The 1997 plan was amended
        at
        our annual meeting of shareholders in December 1999 to increase the number
        of
        shares of common stock available under the plan from 1,000,000 to 3,000,000.
        The
        plan also allows for the granting of stock appreciation rights in tandem
        with,
        or independently of, stock options. Independent (stand-alone) grants of stock
        appreciation rights are not counted against the plan's limit. The purpose
        of the
        1997 plan is to make both incentive stock options within the meaning of Section
        422A of the Internal Revenue Code of 1986, as amended, and non-qualified
        options
        and stock appreciation rights available to our officers, directors and other
        key
        employees and consultants in order to give these individuals a greater personal
        interest in our success and, in the case of employees, an added incentive
        to
        continue and advance in their employment.
  The
        board
        designates who receives grants under the 1997 plan and determines the number
        of
        options and stock appreciation rights, as the case may be, to be granted.
        The
        price payable for the shares of common stock underlying each option will
        be
        fixed by the board at the time of the grant. In the case of incentive stock
        options, however, the exercise price must not be less than 100% of the fair
        market value of common stock at the time the option is granted. The board
        of
        directors also determines the term and vesting schedule of all options and
        stock
        appreciation rights granted, provided that no option may be exercisable later
        than ten years after the date of grant.
  Within
        the fiscal year covered by this annual report, no options were
        granted.
  24
 Table
            of Contents
  ITEM
        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
  The
        following table sets forth as of March 4, 2008, certain information with
        respect
        to the beneficial ownership of Common Stock by (i) each Director, nominee
        and
        executive officer of us; (i) each person who owns beneficially more than
        5% of
        the common stock; and (iii) all Directors, nominees and executive officers
        as a
        group. The percentage of shares beneficially owned is based on there having
        been
        49,830,393 shares of Common Stock outstanding as of March 4, 2008.
 
 OFFICERS,
        DIRECTORS AND BENEFICIAL OWNERS, AS OF MARCH 4, 2008
 
 Name
                  & Address of Beneficial Owner(1)
              Amount
                  & Nature of Beneficial Owner
              %
                  of Class(2)Thomas
                  Kidrin
                11
                  Royal Road, Brookline, MA  02445
              6,290,000
              12.62%All
                  directors and executive officers as a group (one person)
              6,290,000
              12.62%
 
 (1)  Unless
        stated otherwise, the business address for each person named is Worlds.com,
        Inc.
 
 (2)  Calculated
        pursuant to Rule 13d-3(d) (1) of the Securities Exchange Act of 1934. Under
        Rule
        13d-3(d), shares not outstanding which are subject to options, warrants,
        rights
        or conversion privileges exercisable within 60 days are deemed outstanding
        for
        the purpose of calculating the number and percentage owned by a person, but
        not
        deemed outstanding for the purpose of calculating the percentage owned by
        each
        other person listed. We believe that each individual or entity named has
        sole
        investment and voting power with respect to the shares of common stock indicated
        as beneficially owned by them (subject to community property laws where
        applicable) and except where otherwise noted.
  ITEM
        12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
  We
        have
        entered into a Financial Advisory and Consulting Agreement, dated March 23,
        1999, with SGC Advisory Services, Inc., of which Mr. Chrust, our former
        chairman, is the president and sole shareholder. The agreement continues
        through
        March 2002 and provides for an initial annual fee of $120,000. The annual
        fee
        increased to $300,000 in March 2000. In addition, we granted warrants to
        SGC to
        purchase 1,000,000 shares of our common stock at $.50 per share. The warrants
        are exercisable through April 13, 2006. In connection with the engagement
        of
        SGC, Messrs. Kidrin, Greenberg and Scharf agreed (i) to contribute to us
        for
        cancellation 300,000, 881,250 and 318,750 shares of our common stock,
        respectively, and (ii) during the term of the consulting agreement, to vote
        any
        shares of our common stock owned by them for the election of Mr. Chrust as
        a
        director.
  In
        June
        and August 1999, we consummated two tranches of a private placement, selling
        an
        aggregate of 59 units. Each unit cost $60,000 and consisted of 15,000 shares
        of
        common stock and warrants to purchase 7,500 shares of common stock at an
        exercise price of $5.00 per share. Mr. Chrust purchased two units in this
        private placement.
  In
        January 2001, we consummated a private placement of units, each unit consisting
        of a $50,000 principal amount 6% convertible promissory note and a warrant
        to
        purchase 50,000 shares of our common stock. We sold 37.6 units at a per-unit
        price of $50,000 for aggregate proceeds of $1,880,000, of which $1,345,000
        was
        paid in cash and $535,000 was paid by converting certain of our outstanding
        debt
        and other obligations. The notes are our unsecured obligations and are due
        on
        July 2, 2002, subject to certain mandatory prepayments. The conversion price
        of
        the notes and exercise price of the warrants is $0.10465, representing 115%
        of
        the average last sale price of a share of common stock as reported by the
        OTC
        Bulletin Board for the five consecutive trading days immediately prior January
        2, 2001, the date of the initial closing of the private placement. Steven
        Chrust, our chairman at that time, purchased 13.1 units in the private
        placement, of which $255,000 was invested in cash and $400,000 was invested
        through the conversion of existing outstanding obligations we owed to Mr.
        Chrust, including $250,000 pursuant to the terms of a convertible negotiable
        promissory note evidencing Mr. Chrust's prior loan to us on November 8, 2000.
        Pursuant to the terms of this note, the unpaid principal amount then due
        on the
        note was required to be converted into securities being in our next offering
        grossing net proceeds of at least $500,000. In addition, Mr. Chrust agreed
        to
        forfeit warrants to purchase 375,000 shares of our common stock which were
        issued to him in connection with the note. Various other officers, directors
        and
        employees purchased an additional 4.1 units, all of which was invested in
        cash.
  25
 Table
            of Contents
  PART
        IV
  Item 13.
        Exhibits.
  (a)
              Financial
                  Statements
 
 1.
        The
        following financial statements of Worlds.com, Inc. are included in Part II,
        Item
        7:
 
 Independent
        Auditors’ Report..........................................................    15
 Balance
        Sheet-December 31, 2001...................................................16
 Statements
        of Operations - for years ended December 31, 2001 and 2000......17
 Statements
        of Cash Flows - for years ended December 31, 2001 and 2000.....18
 Statements
        of Stockholders’ Equity - for years ended
 December
        31, 2001 and 2000..........................................................19
 Notes
        to
        Financial Statements..........................................................20-21
  2.
        Exhibits
 
 3.1           
        Certificate of Incorporation (a)
 3.1.1         Certificate
        of Amendment of the Certificate of Incorporation (b)
 3.2           
        By-Laws - Restated as Amended (c)
 4.1           
        1997 Incentive and Non-Qualified Stock Option Plan, as amended (d)
 4.2           
        Form of Note issued in 2001 Private Placement (e)
 4.3           
        Form of Warrant issued in 2001 Private Placement (e)
 10.1          Consulting
        Agreement between the Registrant and SGC Advisory, Inc. (b)
 14.1.         Code
        of Ethics **
 31.1.         Rule
        13a-14(a)/15d-14(a) Certifications of Chief Executive Officer **
 31.2.         Rule
        13a-14(a)/15d-14(a) Certifications of Chief
        Financial  Officer **
 32.1.         Section
        1350 Certifications of Chief Executive Officer
        **
 32.2.         Section
        1350 Certifications of Chief Financial Officer
        **
  (a)
              Filed
                  previously as an exhibit to Registrant's Registration Statement
                  No.
                  2-31876, and incorporated herein by
                  reference.
  (b)
              Filed
                  previously as an exhibit to Registrant's Annual Report on Form
                  10-KSB
                  filed on March 30, 2000, and incorporated herein by
                  reference.
  (c)
              Filed
                  previously as an exhibit to Registrant's Post-Effective Amendment
                  No. 3 to
                  Registration Statement on Form SB-2 (File No. 333-10838), and incorporated
                  herein by reference.
  (d)
              Filed
                  previously as an exhibit to Registrant's Registration Statement
                  on Form
                  S-8 (File No. 333-89937), and incorporated herein by
                  reference.
  (e)
              Filed
                  previously as an exhibit to Registrant's Current Report on Form
                  8-K filed
                  on January 19, 2001, and incorporated herein by
                  reference.
  **
        Filed
        herewith
 
 (b)
              Reports
                  on Form 8-K
  None.
  26
 Table
            of Contents
  Item 14.
        Principal Accountant Fees and Services.
 
 Fees
        Billed For Audit and Non-Audit Services
 
 The
        following table represents the aggregate fees billed for professional audit
        services rendered to the independent auditor, Grant Thornton LLP, ("Thornton")
        for our audit of the annual financial statements for the year ended December
        31,
        2000. We have changed our independent auditor to Bongiovanni & Associates,
        P.A. (“Bongiovanni”) for our audit of the annual financial statements for the
        year ended December 31, 2001. Bongiovanni was retained as our auditor in
        2007.
        Audit fees and other fees of auditors are listed as follows:
  Year
                    Ended December
                    31
                
                2001
                
                2001
                
                2000Bongiovanni
                
                Thornton
                
                ThorntonAudit
                    Fees (1)
                
                $
                12,200
                (3)
                $
                82,196
                (2)
                $
                72,393
                
                
                (2)Audit-Related
                    Fees (4)
                
                
                --
                
                
                --
                
                
                --Tax
                    Fees (5)
                
                
                --
                
                
                --
                
                
                --All
                    Other Fees (6)
                
                
                --
                
                
                --
                
                
                --Total
                    Accounting Fees and Services
                
                $
                12,200
                
                $
                82,196
                
                $
                72,393
  (1)
              Audit
                  Fees. These are
                  fees for professional services for the audit of our annual financial
                  statements, and for the review of the financial statements included
                  in our
                  filings on Form 10-QSB, and for services that are normally provided
                  in
                  connection with statutory and regulatory filings or
                  engagements.
 (2)
              The
                  amounts shown for Thornton in 2000 relate to services in connection
                  with
                  consents and assistance with and review of documents filed with
                  the
                  Securities and Exchange Commission.
 (3)
              The
                  amounts shown for Bongiovanni in 2001 relate to (i) the audit of
                  our
                  annual financial statements for the fiscal year ended December
                  31, 2001,
                  and (ii) the review of the financial statements included in our
                  filings on
                  Form 10-QSB for the first, second and third quarters of
                  2001.
 (4)
              Audit-Related
                  Fees.
                  These are fees for the assurance and related services reasonably
                  related
                  to the performance of the audit or the review of our financial
                  statements.
 (5)
              Tax
                  Fees. These are
                  fees for professional services with respect to tax compliance,
                  tax advice,
                  and tax planning.
 (6)
              All
                  Other Fees. These
                  are fees for permissible work that does not fall within any of
                  the other
                  fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
                  Fees.
 
 Pre-Approval
        Policy For Audit and Non-Audit Services
 
 We
        do not
        have a standing audit committee, and the full Board performs all functions
        of an
        audit committee, including the pre-approval of all audit and non-audit services
        before we engage an accountant. All of the services rendered to us by
        Bongiovanni & Associates, P.A. were pre-approved by our Board of
        Directors.
 
 We
        are
        presently working with our legal counsel to establish formal pre-approval
        policies and procedures for future engagements of our accountants. The new
        policies and procedures will be detailed as to the particular service, will
        require that the Board or an audit committee thereof be informed of each
        service, and will prohibit the delegation of pre-approval responsibilities
        to
        management. It is currently anticipated that our new policy will provide
        (i) for
        an annual pre-approval, by the Board or audit committee, of all audit,
        audit-related and non-audit services proposed to be rendered by the independent
        auditor for the fiscal year, as specifically described in the auditor's
        engagement letter, and (ii) that additional engagements of the auditor, which
        were not approved in the annual pre-approval process, and engagements that
        are
        anticipated to exceed previously approved thresholds, will be presented on
        a
        case-by-case basis, by the President or Principal Accounting Officer, for
        pre-approval by the Board or audit committee, before management engages the
        auditors for any such purposes. The new policy and procedures may authorize
        the
        Board or audit committee to delegate, to one or more of its members, the
        authority to pre-approve certain permitted services, provided that the estimated
        fee for any such service does not exceed a specified dollar amount (to be
        determined). All pre-approvals shall be contingent on a finding, by the Board,
        audit committee, or delegate, as the case may be, that the provision of the
        proposed services is compatible with the maintenance of the auditor's
        independence in the conduct of its auditing functions. In no event shall
        any
        non-audit related service be approved that would result in the independent
        auditor no longer being considered independent under the applicable rules
        and
        regulations of the Securities and Exchange Commission.
 
 (a)
        On
        December 31, 2001, our Chief Executive Officer and Principal Financial Officer
        made an evaluation of our disclosure controls and procedures. In our opinion,
        the disclosure controls and procedures are adequate because the systems of
        controls and procedures are designed to assure, among other items, that 1)
        recorded transactions are valid; 2) valid transactions are recorded; and
        3)
        transactions are recorded in the proper period in a timely manner to produce
        financial statements which present fairly the financial condition, results
        of
        operations and cash flows for the respective periods being presented. Moreover,
        the evaluation did not reveal any significant deficiencies or material
        weaknesses in our disclosure controls and procedures.
 
 (b)
        There
        have been no significant changes in our internal controls or in other factors
        that could significantly affect these controls since the last
        evaluation.
  27
  SIGNATURES
  In
        accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
        the
        Registrant caused this Report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
   Dated:
        March 4,
        2008                                                                           
WORLDS.COM, INC.
  (Registrant)
 
 By:     
                  /s/ Thomas
                  Kidrin
                Name: Thomas
                  Kidrin
                Title:   President
                  and Chief Executive Officer
  In
        accordance with the Securities Exchange Act of 1934, this Report has been
        signed
        below by the following persons on behalf of the Registrant and in the capacities
        and on the dates indicated.
  Signatures                                     
                  Title                                                                      Date
                
                
                /s/
                  Thomas
                  Kidrin                           President,
                  Chief Executive
                  Officer                          March
                  4, 2008
                Thomas
                  Kidrin                                
                  and Director
                
                
                
                /s/
                  Christopher J.
                  Ryan                     Vice
                  President - Finance
                  and                                  March
                  4, 2008
                Christopher
                  J.
                  Ryan                         Principal
                  Accounting and
                Financial
                  Officer
                
                
                /s/
                  Bernard
                  Stolar                            Director                                                                 March
                  4, 2008
                Bernard
                  Stolar
                
                
                
                /s/
                  Jay
                  Coleman                               Director                                                                March
                  4, 2008
                Jay
                  Coleman
                
                
                
                /s/
                  Robert
                  Fireman                          Director                                                                March
                  4, 2008
                Robert
                  Fireman