U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


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


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



                      For the Quarter Ended March 31, 1997

                         Commission file number 0-25624

                                LOTTOWORLD, INC.
             (Exact name of registrant as specified in its charter)


               Florida                                       65-0399794

        (State of Incorporation)                      (IRS Employer ID No.)

          2150 Goodlette Road
               Suite 200
              Naples, FL                                      34102
  (Address of principal executive offices)                  (Zip Code)


                                 (941) 643-1677
                               (Telephone Number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days.


                      YES   X      NO        
                           ---         ---

Common stock,  par value $.001 per share;  7,299,401  shares  outstanding  as of
April 30, 1997






<PAGE>



                               LOTTOWORLD, INC.

                               TABLE OF CONTENTS


PART I      Financial Information                                       Page No.
  Item 1.      Financial Statements
               Condensed Consolidated Balance Sheets                        3
               Condensed Consolidated Statements of Operations              4
               Condensed Consolidated Statements of Common Shareholders'
                  Equity (Deficit)                                          5
               Condensed Consolidated Statements of Cash Flows              6
               Notes to Condensed Consolidated Financial Statement          7

  Item 2.      Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                    8


PART II     Other Information

  Item 6.      Exhibits and Reports on Form 8-K                             9


SIGNATURES                                                                 10



























                                        2


<PAGE>
                                 LOTTOWORLD, INC
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                             MARCH 31,     DECEMBER 31,
                                                               1997           1996
                                                           (Unaudited)
                                                          ------------    ------------
<S>                                                       <C>             <C>   
ASSETS

Current Assets
   Cash and cash equivalents                              $     18,633    $    137,752
   Accounts receivable, net                                    287,644         324,297
   Prepaid expenses                                            279,281         549,664
                                                          ------------    ------------
                                                               585,558       1,011,713

Restricted Cash, redeemable convertible preferred stock      1,000,020       1,000,020
Accounts receivable, officers                                   58,375          58,375
Furniture, Fixtures and Equipment, net                         328,128         338,729
Other Assets                                                    26,820          26,820
                                                          ------------    ------------
                                                          $  1,998,901    $  2,435,657
                                                          ============    ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
   Current maturities of long-term debt                   $     16,667    $     16,667
   Accounts payable                                            771,701         757,789
   Accrued expenses                                            192,211          45,724
   Deferred revenue                                            332,313         366,372
   Dividends payable                                            25,000          25,000
                                                          ------------    ------------
                                                             1,337,892       1,211,552
                                                          ------------    ------------
Long-Term Debt, less current maturities                        504,213           8,383
                                                          ------------    ------------
Redeemable convertible preferred stock                       1,000,020       1,000,020
                                                          ------------    ------------
Common Shareholders' Equity
   Common stock                                                  6,599           6,165
   Additional paid-in capital                               12,766,436      12,491,870
   Accumulated deficit                                     (13,582,185)    (12,248,259)
   Less treasury stock                                         (34,074)        (34,074)
                                                          ------------    ------------
                                                              (843,224)        215,702
                                                          ------------    ------------
                                                          $  1,998,901    $  2,435,657
                                                          ============    ============

</TABLE>











                                       -3-

<PAGE>

                                LOTTOWORLD, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED MARCH 31
                                                           1997           1996
                                                       -----------    -----------
<S>                                                    <C>            <C>        
Sales revenue                                          $   261,237    $   246,266
                                                       -----------    -----------

Operating expenses:
   Production, distribution and editorial                  584,463        410,551
   Circulation                                             119,616        265,734
   Advertising, promotion and business development         129,864        133,508
   Selling, general and administrative                     746,787        317,869
                                                       -----------    -----------
                                                         1,580,730      1,127,662
                                                       -----------    -----------

Operating (loss)                                        (1,319,493)      (881,396)
                                                       -----------    -----------

Other income (expense):
   Interest income                                          11,171         25,442
   Interest expense                                           (604)        (1,019)
                                                       -----------    -----------
                                                            10,567         24,423
                                                       -----------    -----------

Net (loss)                                             ($1,308,926)   ($  856,973)
                                                       ===========    ===========

Net (loss) per common share                            ($     0.20)   ($     0.26)
                                                       ===========    ===========

Weighted average number of common shares outstanding     6,393,343      3,357,689
                                                       ===========    ===========
</TABLE>




















                                       -4-

<PAGE>
                                LOTTOWORLD, INC.
                    STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                       Common      Additional                   Common                     Total
                                            Common      Stock       Paid-in     Accumulated      Stock      Treasury   Shareholders'
                                            Stock    Subscribed     Capital     (Deficit)    Subscriptions   Stock         Equity
                                            -----    ----------     -------     ---------    -------------   -----         ------
<S>                                        <C>      <C>          <C>           <C>           <C>                        <C>        
Balance, December 31, 1995                 $3,106   $ 1,316,230  $ 7,933,759   ($ 7,789,523) ($  866,250)      --       $   597,322

   Common stock issued (3,058,831 shares)   3,059      (449,980)   4,558,111           --           --          --        4,111,190
   Common stock subscriptions expired        --        (866,250)        --             --        866,250        --             --
  Treasury shares purchased (11,500 shares)  --            --           --             --           --       (34,074)       (34,074)
   Dividend distributions                    --            --           --         (100,002)        --          --         (100,002)
   Net loss                                  --            --           --       (4,358,734)        --          --       (4,358,734)
                                           ------   -----------  -----------   ------------  -----------   ---------    -----------
Balance, December 31, 1996                  6,165          --     12,491,870    (12,248,259)        --       (34,074)       215,702

  Common stock issued (434,188 shares)        434          --        274,566           --           --          --          275,000
   Dividend distribution                     --            --           --          (25,000)        --          --          (25,000)
   Net loss                                  --            --           --       (1,308,926)        --          --       (1,308,926)
                                           ------   -----------  -----------   ------------  -----------   ---------    -----------
Balance , March 31, 1997                   $6,599          --    $12,766,436   ($13,582,185)        --     ($ 34,074)   ($  843,224)
                                           ======   ===========  ===========   ============  ===========   =========    ===========

</TABLE>






























































                                       -5-

<PAGE>

                                LOTTOWORLD, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                   (Unaudited)

                                                     THREE MONTHS ENDED MARCH 31
                                                         1997           1996
                                                     -----------    -----------


   Net cash (used in) operating activities           ($  361,750)   ($1,522,807)
                                                     -----------    -----------

Cash Flows (Used In) Investing Activities
   (Purchase) disposal of furniture and equipment         (3,199)   ($   21,099)
                                                     -----------    -----------

Cash Flows From Financing Activities
   Issuance on long-term notes payable                    (4,170)   ($    4,167)
   Issuance of common stock                              275,000      1,607,498
   Purchase of treasury stock                               --          (10,860)
   Dividends paid                                        (25,000)          --
                                                     -----------    -----------
                                                         245,830      1,592,471
                                                     -----------    -----------

   Net increase in cash                                 (119,119)        48,565

Cash

   Beginning                                             137,752      1,318,983
                                                     -----------    -----------
   Ending                                            $    18,633    $ 1,367,548
                                                     ===========    ===========






















                                       -6-

<PAGE>








                               LOTTOWORLD, INC.


             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)   The  unaudited  financial  statements  and the  related  notes  have  been
      prepared  pursuant  to the rules and  regulations  of the  Securities  and
      Exchange  Commission.   Accordingly,   certain  information  and  footnote
      disclosures   normally  included  in  financial   statements  prepared  in
      accordance with generally accepted accounting principles have been omitted
      pursuant  to  such  rules  and  regulations.  The  accompanying  financial
      statements  and  related  notes  should  be read in  conjunction  with the
      audited financial  statements of the Company,  and notes thereto,  for the
      year ended December 31, 1996.

      The  information  furnished  reflects,  in the opinion of management,  all
      adjustments, consisting of normal recurring accruals, necessary for a fair
      presentation of the results of the interim periods presented.

(2)   The net (loss) per common share  amounts are  computed  using the weighted
      average number of common shares outstanding during the periods.
























                                      7


<PAGE>



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


Results of Operations:
----------------------

      For the three  months  ended  March 31,  1997 and 1996,  the  Company  had
operating  revenues of $261,000 and $246,000;  operating  expenses of $1,581,000
and  $1,128,000;  operating  losses of $1,319,000 and $ $881,000;  net losses of
$$1,309,000  and $857,000;  and losses per share of $.20 and $.26  respectively.
Included in the losses are $450,000 attributable to the start-up of the New York
Lottery Players Monthly and $250,000 attributable to investor relations

      Production,   distribution  and  editorial  expenses  rose  $174,000  from
$411,000  in 1996 to $585,000 in 1997,  or 43%.  $85,000 of the net  increase is
linked to the printing of the New York Lottery  Players  Monthly,  which did not
begin  publication  until October 1996 ($188,000) and the reduction of the print
order of LottoWorld  magazine,  whose printing  expense deceased  $103,000.  The
balance of the increase is attributable to increased editorial personnel.

      Selling,  general and  administrative  expenses  increased  $429,000  from
$318,000  to  $747,000,  or 75%. In  addition  to the  increase of $250,000  for
investor relations: (i) $65,000 was expended for financing costs associated with
$500,000 of a convertible  note payable on demand which was obtained in February
1997;  (ii)  overall  salaries  increased  by $30,000;  (iii) taxes and benefits
increased $19,000 attributable to more employees being eligible for full payment
of their medical insurance due to longevity of service; iv) legal and accounting
expenses  increased  $24,000 as a result of additional  Securities  and Exchange
reporting   requirements  and  for  Time  Distribution  Services;  and  (v)  the
remaining  $41,000  is  attributable  to increased costs of a larger company.


Liquidity and Capital Resources
-------------------------------


      The Company had a net  decrease in its cash  position of $119,000  for the
three  months  ended March 31,  1997.  This was net of  $275,000  of  additional
capital raised through the issuance of common stock.

      The Company does not have sufficient  capital to operate its business past
May 1997 unless the Company raises additional capital.

      The Company is currently  negotiating  with several sources for the needed
capital and while the Company is confident it will raise the necessary  capital,
there can be no assurance the Company will be successful.



                                      8

<PAGE>






               RECENT DEVELOPMENTS WITH THE NASDAQ STOCK MARKET


              On April 18, 1997,  the Company  received a letter from The Nasdaq
Stock Market, Inc.  ("Nasdaq")  informing the Company that based upon its Annual
Report on Form  10-KSB for the year  ended  December  31,  1996,  the  Company's
capital and surplus was less than $1,000,000 and that Nasdaq required  companies
listed on The Nasdaq  SmallCap  Market must  maintain  capital and surplus of at
least $1,000,000 for continued  listing.  Nasdaq went on to say "in light of the
circumstances,  the  Company's  shares of common  stock are subject to delisting
effective  with the close of  business  on May 2, 1997  unless the  Company  can
provide three (3) copies of an SEC-filed  report,  which  demonstrates  that the
Company currently meets all The Nasdaq SmallCap Market listing criteria."

              On a Current  Report on Form 8-K and 8-K/A,  dated April 22, 1997,
the  Company  reported  that  based  upon  its  March  31,  1997  balance  sheet
(unaudited) and a pro-forma balance sheet as of the same date, including (I) the
conversion  of  $250,000  of  the  Company's  Series  A  Redeemable  Convertible
Preferred Stock; (ii) the issuance of $500,000 of shares of the Company's common
stock in exchange for an investment in Sound Money  Investor's  Inc.;  and (iii)
the payment,  by common stock,  for $101,000 of printing  services,  thereby the
Company reported capital and surplus of $1,031,467.

              On May 6, 1997,  Nasdaq wrote the Company,  "Although  the Company
reported  capital and surplus of  $1,031,467  ...,  the  Company  only  achieved
minimal  compliance.."  and the  Company's  common  stock will be delisted  from
Nasdaq effective with the close of business May 13, 1997.

              The Company is entitled to a review of the delisting determination
by  Nasdaq's  staff and has asked  for an  appeal  of the  determination  at the
earliest time available. Nasdaq has set June 12, 1997 as the date of the review.
Until the review and appeal  process is completed,  the  Company's  common stock
will continue to be listed on The Nasdaq SmallCap Market.

              The Company is currently negotiating with several sources  for the
needed  capital  and  while the Company is confident it will raise the necessary
capital, there can be no assurance the Company will be successful.

      PART II.    Other Information


Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibit 11. Computation of net (loss) per share of
                              Common Stock - not required

            (b)               The  Registrant did not file a Form 8-K during the
                              quarter ended March 31, 1997.



                                      9

<PAGE>



                                  SIGNATURES



      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                          LOTTOWORLD, INC.

DATED:  May 21, 1997                          S/ Stuart Dubow
                                          -------------------
                                          Stuart Dubow
                                          Chief Financial Officer





DATED: May 21, 1997                          S/ Stuart Dubow
                                          ------------------
                                          Stuart Dubow
                                          Chief Financial Officer

























                                       10