U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

     X     Quarterly report under Section 13 or 15(d) of the Securities Exchange
     -
           Act  of  1934  for  the  quarterly  period  ended  June  30,  2002
                                                            -----------------

     ___   Transition report pursuant to Section 13 or 15(d) of the Securities
           Exchange  Act  of  1934

           For  the  transition  period  from                to

                         Commission  File  number  0-28058
                                                 ---------


                             VILLAGEWORLD.COM, INC.
                             ----------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)



          New  York                                       11-3137508
          ---------                                       ----------
     (State or Other Jurisdiction                     (IRS  Employer
         of  Incorporation)                        Identification  No.)



                  620 Johnson Avenue, Bohemia, New York  11716
                  --------------------------------------------
                    (Address of Principal Executive Offices)


                                 (631) 218-0700
                                 --------------
                 (Issuer's Telephone Number Including Area Code)

                                 Not  Applicable
             ---------------------------------------------------------
    (Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                     Report)


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. Yes  X    No
                                                                       ---   ---

State  the  number of shares outstanding of each of the issuer's class of common
equity,  as  of  the latest practicable date: At August 15, 2002, the issuer had
outstanding  23,644,986  shares  of  Common  Stock,  par  value $.001 per share.
(Assuming  the  conversion  of  all  outstanding  Class  B  Preferred  Stock the
outstanding  common  stock  at  August  15,  2002  would  increase to 93,769,962
shares).

Transitional  Small  Business  Disclosure  Format  (Check  one):  Yes[  ]  No[X]


                                        1
<PAGE>
                             VILLAGEWORLD.COM, INC.
                    INDEX TO QUARTERLY REPORT ON FORM 10-QSB
                FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
                           Quarter Ended June 30, 2002

                              ITEMS IN FORM 10-QSB


<TABLE>
<CAPTION>

<S>                                    <C>                                                  <C>
                                                                                           Page
                                                                                           ----

Part I. . . . . . . . . . . . . . . .  Financial Information                                  3

Item 1. . . . . . . . . . . . . . . .  Financial Statements                                   3

Item 2. . . . . . . . . . . . . . . .  Management's Discussion and Analysis of Financial
                                       Condition and Results of Operations                   11

Part II . . . . . . . . . . . . . . .  Other Information                                     16

Item 1. . . . . . . . . . . . . . . .  Legal Proceedings                                     16

Item 2. . . . . . . . . . . . . . . .  Changes in Securities                                 16

Item 3. . . . . . . . . . . . . . . .  Defaults Upon Senior Securities                      N/A

Item 4. . . . . . . . . . . . . . . .  Submission of Matters to a Vote of Security Holders   17

Item 5. . . . . . . . . . . . . . . .  Other Information                                    N/A

Item 6. . . . . . . . . . . . . . . .  Exhibits and Reports on Form 8-K                      17

Signatures. . . . . . . . . . . . . .                                                        18


</TABLE>



                                        2
<PAGE>
<TABLE>
<CAPTION>

                             VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                    CONSOLIDATED BALANCE SHEET





                                                         June 30, 2002    December 31, 2001
                                                        ---------------  -------------------
<S>                                                     <C>              <C>
ASSETS
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . .  $      175,375   $           91,064
Accounts receivable, net of allowance for
 uncollectibles. . . . . . . . . . . . . . . . . . . .         362,907              403,569
Inventory. . . . . . . . . . . . . . . . . . . . . . .          24,949               25,066
Prepaid expenses and other current assets. . . . . . .          43,139               90,147
                                                        ---------------  -------------------
  Total Current Assets . . . . . . . . . . . . . . . .         606,370              609,846


Fixed assets, net of accumulated depreciation. . . . .         191,912              227,504
Goodwill . . . . . . . . . . . . . . . . . . . . . . .       1,780,443            1,780,443
Other assets . . . . . . . . . . . . . . . . . . . . .          21,454               21,507
                                                        ---------------  -------------------
  TOTAL. . . . . . . . . . . . . . . . . . . . . . . .  $    2,600,179   $        2,639,300
                                                        ===============  ===================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank. . . . . . . . . . . . . . . . . .  $      192,718   $          192,718
Accounts payable and accrued expenses. . . . . . . . .         652,461              841,856
Commissions payable. . . . . . . . . . . . . . . . . .         198,267              183,188
Exchange payable                                               148,185                    -
Deferred income. . . . . . . . . . . . . . . . . . . .          60,207              218,676
Loans payable, related parties . . . . . . . . . . . .         964,355              957,091
                                                        ---------------  -------------------
  Total Current Liabilities. . . . . . . . . . . . . .       2,216,193            2,393,529

Accrued cumulative preferred stock dividends . . . . .         131,663              107,320
                                                        ---------------  -------------------
  Total Liabilities. . . . . . . . . . . . . . . . . .       2,347,856            2,500,849
                                                        ---------------  -------------------

Stockholders'  Equity:
Convertible Class B preferred stock; $.001 par value;
 1,000,000 shares authorized; 508,152 shares
 issued and outstanding. . . . . . . . . . . . . . . .             508                  508
Convertible Class C preferred stock; $.001 par value,
  non-voting; redeemable at $125; 25,000 shares
 authorized;  8,777 and 11,900 shares
 outstanding, respectively . . . . . . . . . . . . . .               9                    9
Common stock; $.001 par value; 200,000,000 shares
 authorized; 23,710,265 and 23,481,030 shares issued,
 respectively. . . . . . . . . . . . . . . . . . . . .          23,710               23,481
Additional paid in capital . . . . . . . . . . . . . .       5,986,495            5,947,786
Accumulated deficit. . . . . . . . . . . . . . . . . .      (5,690,855)          (5,765,189)
Stock subscription receivable. . . . . . . . . . . . .          (2,920)              (3,520)
Treasury stock (65,279 shares at cost) . . . . . . . .         (64,624)             (64,624)
                                                        ---------------  -------------------
  Total stockholders' equity . . . . . . . . . . . . .         252,323              138,451
                                                        ---------------  -------------------

  TOTAL. . . . . . . . . . . . . . . . . . . . . . . .  $    2,600,179   $        2,639,300
                                                        ===============  ===================
                                                                     -                    -
</TABLE>



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

                                        3
<PAGE>
<TABLE>
<CAPTION>

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


                                                      Three Months Ended                      Six Months Ended
<S>                                            <C>                  <C>                 <C>             <C>
                                               June 30, 2002        June 30, 2001       June 30, 2002   June 30, 2001
                                               -------------------  ------------------  --------------  ---------------

REVENUES:
Subscription services . . . . . . . . . . . .  $           909,862  $         457,375   $    1,487,403  $      978,759
Installation, maintenance and consulting. . .              404,692            140,486          795,024         249,362
Hardware sales. . . . . . . . . . . . . . . .               97,163            169,415          212,981         766,087
Other revenues. . . . . . . . . . . . . . . .                   25              5,281            1,246          42,720
                                               -------------------  ------------------  --------------  ---------------
  Total revenues. . . . . . . . . . . . . . .            1,411,742            772,557        2,496,654       2,036,928
                                               -------------------  ------------------  --------------  ---------------

COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . . .              912,070            566,647        1,527,862       1,492,458
Selling, general and administrative . . . . .              413,576            482,838          812,313       1,050,210
Amortization of goodwill  . . . . . .                            -             59,348                -         118,696
Interest expense. . . . . . . . . . . . . . .               25,414             28,933           55,573          54,880
                                               -------------------  ------------------  --------------  ---------------
  Total costs and expenses. . . . . . . . . .            1,351,060          1,137,766        2,395,748       2,716,244
                                               -------------------  ------------------  --------------  ---------------

Pre-tax income (loss) . . . . . . . . . . . .               60,682           (365,209)         100,906        (679,316)

Benefit from  income taxes. . . . . . . . . .                2,000                  -                -               -
                                               -------------------  ------------------  --------------  ---------------

Net income (loss) . . . . . . . . . . . . . .               62,682           (365,209)         100,906        (679,316)

Preferred stock dividends paid in-kind
 and accrued. . . . . . . . . . . . . . . . .               13,166             16,770           26,572          34,257
                                               -------------------  ------------------  --------------  ---------------

Net income (loss) applicable to
 common stockholders. . . . . . . . . . . . .  $            49,516  $        (381,979)  $       74,334  $     (713,573)
                                               ===================  ==================  ==============  ===============

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

Weighted average common shares
 outstanding, giving effect to the
 conversion to common stock
 of all Class B Preferred Stock outstanding:
 Basic. . . . . . . . . . . . . . . . . . . .           93,722,709         90,526,824       93,640,303      90,207,563
                                               ===================  ==================  ==============  ===============
 Diluted. . . . . . . . . . . . . . . . . . .           93,725,805         90,526,824       93,644,217      90,207,563
                                               ===================  ==================  ==============  ===============

Pro-forma amounts assuming retroactive
 application of Statement of Financial
 Accounting Standards No. 142:
Net income (loss) . . . . . . . . . . . . . .  $            62,682  $        (305,861)  $      100,906  $     (560,620)
                                               ===================  ==================  ==============  ===============
Net income (loss) applicable to
 common stockholders. . . . . . . . . . . . .  $            49,516  $        (322,631)  $       74,334  $     (594,877)
                                               ===================  ==================  ==============  ===============
Basic and diluted net income (loss)
 per common share . . . . . . . . . . . . . .  $                 -  $               -   $            -  $        (0.01)
                                               ===================  ==================  ==============  ===============

</TABLE>






       The accompanying notes are an integral part of the financial statements.
                                        4
<PAGE>

<TABLE>
<CAPTION>

                                      VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                      For the Six Months Ended June 30, 2002


                                                Class B                         Class C
                                             Preferred Stock                Preferred Stock         Common Stock
                                             ----------------               ----------------        ------------
                                         Shares            Amount          Shares     Amount     Shares      Amount
                                    ----------------  ----------------  ------------  -------  ----------   -------
<S>                                 <C>               <C>               <C>           <C>      <C>         <C>
Balance, January 1, 2002 . . . . .          508,152   $      508           8,943      $   9    23,481,030    $23,481

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

Issuance of shares for services. .                                                                100,000        100

Exercise of nominal stock options

Accrued  cumulative dividends
 on preferred stock

Capital contribution imputed
 for interest expense
Net income . . . . . . . . . . . .                -           -                -          -             -          -
                                    ---------------   ----------------  ------------  -------  ----------    -------

Balance,June 30, 2002. . . . . . .          508,152   $     508            8,777      $   9    23,710,265    $23,710
                                    ===============   ================   ==========   =======  ==========    =======

</TABLE>



<TABLE>
<CAPTION>



                                     Additional                      Stock                                    Total
                                      Paid-In      Accumulated    Subscription         Treasury Stock     Stockholders'
                                                                                      ----------------   --------------
                                      Capital        Deficit       Receivable         Shares      Amount         Equity
                                    ------------  -------------  --------------       -------    -------       --------
<S>                                 <C>           <C>            <C>             <C>               <C>              <C>
Balance, January 1, 2002 . . . . .  $ 5,947,786   $ (5,765,189)  $    (3,520)      (65,279)    $  (64,624)   $ 138,451

Conversion of preferred shares
 (first quarter) . . . . . . . . .        2,100           (240)                                                  2,229

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

Exercise of nominal stock options.                                       600                                       600

Accrued  cumulative dividends
 on preferred stock. . . . . . . .                     (26,332)                                                (26,332)

Capital contribution imputed
 for interest expense. . . . . . .       20,709                                                                 20,709

Net income . . . . . . . . . . . .            -        100,906             -             -              -      100,906
                                    ------------  -------------  ------------    ----------    -----------     --------

Balance,June 30, 2002. . . . . . .  $ 5,986,495   $ (5,690,855)  $    (2,920)      (65,279)    $  (64,624)   $ 252,323
                                    ============  =============  ============     =========    ===========   ==========

</TABLE>




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

                                        5
<PAGE>

<TABLE>
<CAPTION>

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



                                                                  Six Months Ended June 30,
                                                                       2002             2001
                                                                   ---------          -------
<S>                                                      <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . . . . . . . . . .            $    100,906       $(679,316)
                                                                   -------------      ----------
                                                                              -               -
Adjustments to reconcile to net cash provided
 (required) by operating activities:
  Depreciation and amortization . . . . . . . . . . . .                  35,632         157,221
  Stock issued for compensation . . . . . . . . . . . .                   8,600          10,000
  Interest expense accrued and imputed on
   related party loans. . . . . . . . . . . . . . . . .                  35,557          22,671
  Decrease (increase) in:
      Accounts receivable . . . . . . . . . . . . . . .                  40,662         112,661
      Inventory . . . . . . . . . . . . . . . . . . . .                     117          13,093
      Prepaid expenses and other current assets . . . .                  54,408          26,237
  Increase (decrease) in:
      Accounts payable and accrued expenses . . . . . .                (189,935)         66,092
      Commissions payable . . . . . . . . . . . . . . .                  15,079         (65,459)
      Exchange payable                                                  148,185               -
      Deferred income . . . . . . . . . . . . . . . . .                (158,469)              -
      Current liabilities attributable to discontinued
       operations . . . . . . . . . . . . . . . . . . .                       -          18,875
                                                                   -------------      ----------
  Total adjustments . . . . . . . . . . . . . . . . . .                  (9,624)        361,391
                                                                  --------------      ----------
Net cash provided (required) by operating activities. .                  91,282        (317,925)
                                                                   -------------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease in other assets . . . . . . . . .                                 13             380
                                                                   -------------      ----------
Net cash required by provided activities. . . . . . . .                      13             380
                                                                   -------------      ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Note payable proceeds (repayments), net . . . . . . .                                  67,718
  Exercise of stock options . . . . . . . . . . . . . .                     600               -
  Related party loan proceeds (repayments). . . . . . .                  (7,584)        117,144
                                                                   -------------      ----------
Net cash provided (required) by financing activities. .                  (6,984)        184,862
                                                         -----------------------      ----------
 NET INCREASE (DECREASE) IN CASH. . . . . . . . .. .                     84,311        (132,683)
Cash, beginning of period . . . . . . . . . . . . . . .                  91,064         271,032
                                                         -----------------------      ----------
Cash, end of period . . . . . . . . . . . . . . . . . .            $    175,375       $ 138,349
                                                                   =============      ==========
                                                                              -               -

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest . . . . . . . . . . . . . . . . . . .  $                    20,016       $  28,072
    Income taxes                                                              -               -

Supplemental  disclosures  of  non-cash  investing
     and  financing  activities:
  Common stock issued for prepaid services/
   executive compensation. . . . . . . . . . . . .                        7,400          10,000
  Cumulative $6 Class C preferred stock dividend
   accrued/paid in-kind. . . . . . . . . . . . . .                       26,572          34,257

</TABLE>





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

                                        6
<PAGE>

                     VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements

 (Note  1)     The  Company  and  Basis  of  Presentation
               ------------------------------------------

VillageWorld.Com,  Inc.,   provides  community-oriented  Internet  access  under
private  labels  and  installs,  maintains and services computer network systems
consisting of full hardware and proprietary software solutions.  The Company has
two  principal  subsidiaries,  VillageNet,  Inc.  ("VillageNet") and Intelligent
Computer Solutions, Inc. ("ICS"). VillageNet provides Internet on-line services,
offering  its  subscribers  a  variety  of  services  including electronic mail,
software,  computing  support,  and  easy  access  of  the  Internet. VillageNet
provides  small  businesses,  school  districts  and  others  with fully managed
services  that  include Internet connections, remote dial access and Web hosting
services.  ICS  offers full service system integration, specializing in high-end
computer networking infrastructures, Internet solutions, and Local and Wide Area
Network installations. All intercompany balances and transactions are eliminated
in  consolidation.  The  Company  considers  itself  to  operate in one business
segment;  such  segment  comprises  one business reporting unit.  (See Note 11).

The  results  of  operations  for the three and six-month periods ended June 30,
2002  are  not  necessarily indicative of the results of operations for the full
year  ending December 31, 2002.  The accompanying financial statements should be
read in conjunction with the Company's consolidated financial statements for the
year  ended  December  31, 2001 appearing in the Company's Annual Report on Form
10-KSB.

The  information  herein  is  unaudited.  However, in the opinion of management,
such  information  reflects all adjustments (consisting only of normal recurring
adjustments)  necessary  to  make  the  financial  statements   not  misleading.
Additionally, in accordance with applicable standards for interim reporting, the
accompanying  financial  statements do not include all disclosures in conformity
with  generally  accepted  accounting principles.  The Company's chief executive
officer  and  chief  financial  officer  have  certified  this  Form  10Q-SB  in
accordance  with  the  requirements  of Section 906 of the Sarbanes-Oxley Act of
2002.  (See  Exhibits  99.1  and  99.2  included  in  Item 6 of Part II hereof).

(Note  2)      Going  Concern:  International Networking Operations and Loss
                   ---------------------------------------------------------
               of  Major  Customer
               -------------------

The  accompanying condensed consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of  America applicable to a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company's losses from operations in fiscal 2001 and 2000 and related use of cash
for operating activities have resulted in an extremely tight cash position and a
deficit in working capital of $1,609,823 at June 30, 2002 and a current ratio at
such  date of 0.27 to 1.  Despite profitable operations in each of the first two
quarters  of  the  2002  fiscal  year,  the Company's current financial position
raises the question as to its ability to continue as a going concern.

In  October 2001 the Company announced the final approval by the U.S. Air Force
Of a multi-million  dollar contract  to implement  a local and wide area network
solution  for  the  Royal Saudi Air Force ("RSAF") awarded to a related company,
ATTI  International  Development,  Inc.  ("AID"), which sub-contracted a portion
thereof  to  the  Company  pursuant to a verbal agreement.  In December 2001 the
Company  began  work  on  its portion of the initial contract.  As of August 15,
2002,  the Company has completed its work on such contract for which it received
$600,000  and has almost completed work on a second verbally agreed-to contract,
for  which  it has received $240,000, with the remaining $60,000 related thereto
expected  to be received in late August 2002.  AID has advised the Company it is
hopeful of being awarded additional contracts on similar projects with the Saudi
Arabian  government,  which  would  likely  require  the  Company's  work  as  a
sub-contractor.  Presently two such projects are being pursued, for moderate and
medium  eight  figure amounts, respectively. It is not yet known what portion of
these  contracts,  if  eventually awarded to AID, would be sub-contracted to the
Company;  the  Company's  portion  of  the  first  completed  contract comprised
approximately  10%.   The  Company  is  also  independently  seeking  additional
contracts  directly  with  the  Saudi  government; at present there are two such
projects being pursued, ranging in value from moderate seven to low eight figure
amounts,  respectively.  There  is  no assurance that AID or the Company will be
awarded  any  of  these  projects.


                                        7
<PAGE>
(Note  2)      Going  Concern:  International Networking Operations and Loss
               -------------------------------------------------------------
               of  Major  Customer  -  (continued)
               -----------------------------------

The Company was profitable in both the first and second quarters of fiscal 2002;
however the Company must continue profitable operations.  Such future operations
will be negatively affected by the loss in June of 2002 of the Company's largest
customer  for  its  Internet  on-line  services,  which  customer  accounted for
$716,358, $1,086,175 and $1,312,371 of sales for the three and six-month periods
ended  June  30,  2002 and the year ended December 31, 2001, respectively.  Such
sales  constituted  approximately  50.7%, 43.5% and 33.6% of the Company's total
sales  for  such  periods.  The  gross  costs  historically associated with this
customer  were  approximately  85%.

The Company must also restructure its related party debt to insure its long-term
viability.  Management is hopeful it  will  be  successful  in restructuring its
related  party  debt,  in  connection  with  any  additional overseas networking
projects  being awarded, either to AID, or directly to the Company, as discussed
in  the second preceding paragraph, and that the high-profit networking revenues
therefrom  will  largely  offset the loss of the Internet customer.  However, no
assurances  regarding any of these matters can be given, including the continued
availability  of  related  party  loans.  As  of  August 14, 2002, the Company's
related  party  debt  of  $964,355 is due on demand.  The condensed consolidated
financial  statements  do not include any adjustments that might result from the
Company's  inability  to  continue  as  a  going  concern.  (See  Note  6 to the
condensed  consolidated  financial  statements).

(Note  3)          Allowance  for  Doubtful  Accounts
                   ----------------------------------

The  Company  historically  has  had  little  incidence  of  uncollectible trade
receivables.  However  during  the  second  quarter  of fiscal 2002, the Company
provided  an  additional allowance for doubtful accounts of $10,000 with respect
to  one  Internet service customer in the Boston area.  This reserve constituted
approximately 42% of such customer's account receivable balance at June 30, 2002
and increased the Company's total allowance for doubtful accounts to $15,000.

(Note  4)          Bank  Loan
                   ----------

At  June  30,  2002,  the  Company's  bank debt, pursuant to its $200,000 credit
facility,  was $192,718, payable upon demand.  If no demand for payment is made,
the  outstanding  borrowings  are due May 31, 2003, the present maturity date of
the  credit  facility.

(Note  5)          Exchange  Payable
                   -----------------

VillageNet  and  several  of its school district subscribers of Internet hosting
and  related  services  participate  in  a  federally funded program designed to
expand  and  facilitate  those  school districts' access to Internet technology.
Participating  school  districts  receive a discount on those services purchased
from  the  Company, which discount is administered by a governmental contracting
agency and routed through the Company.  At June 30, 2002, $148,185 applicable to
one  school district is reported as exchange payable on the accompanying balance
sheet.  Payment thereof to such school district was made in early July.

(Note  6)          Loans  Payable,  Related  Parties
                   ---------------------------------

The Company repaid $7,584 of its related party indebtedness during the first six
months of 2002, exclusive of current accruals for interest thereon.  At June 30,
2002,  $964,355,  including accrued interest, is outstanding, repayment of which
is  presently  due  on  demand.

(Note  7)          Conversion  of  Preferred  Stock
                   --------------------------------

On  March  21,  2002,  165.75  shares  of Class C Preferred Stock, together with
$2,229 of accrued dividends, were converted into 129,235 shares of common stock.
In  accordance  with the terms of the preferred stock issue, such conversion was
made  at  a  discount  of 25% from the average of the closing bid prices for the
Company's  common  stock  during  the  five  trading  days prior to the holder's
election  to  convert.  After  such  conversions,  8777.59  shares  of  Class  C
Preferred  Stock  remain  outstanding.



                                        8
<PAGE>

(Note  7)          Conversion  of  Preferred  Stock  -  (continued)
                   ------------------------------------------------

The  terms  of  the  preferred  stock issue further provide that on December 28,
2002,  any  Class  C Preferred Stock, which has not yet been converted, shall be
automatically  converted,  without  any action on the part of the holder, to the
number  of  shares of the Company's common stock as such holder would receive if
he had elected to convert his Class C Preferred stock on that date.

(Note  8)          Issuance  of  Common  Stock
                   ---------------------------

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

On  May  14, 2002, as consented to by the Board of Directors, the Company issued
100,000  common  shares  in  satisfaction  of $16,000 of certain consulting fees
applicable  to  the  current  fiscal  year.  The  shares  were  issued under the
Company's  1998 Performance Equity Plan and exhausted the availability of shares
or option grants under such Plan. (See Notes 9B and 9C).

(Note  9)          Stock  Option  Plans
                   --------------------

    (A)     1996  Performance  Equity  Plan:

Pursuant  to  the  Company's 1996 Performance Equity Plan, on March 31st of each
year  during  the  term of such Plan, assuming there are enough shares available
for  grant  thereunder,  each person who is a director of the Company is awarded
options  to  purchase  2,000  shares  of  common  stock at the fair market value
thereof, which options are immediately exercisable as of the date of grant for a
term of ten years.  On April 1, 2002, the five directors of the Company received
this  automatic  grant  of  options  at  an  exercise  price of $0.26 per share.
However,  due  to  the  availability of only 8,232 shares remaining for issuance
under  the 1996 Plan, options to purchase 1,646 and 1,647 shares were granted to
three  and two directors, respectively. This grant exhausted the availability of
options  under  the  1996  Plan.  (See  Note  9C).

    (B)     1998  Performance  Equity  Plan:

The  Company's  1998  Performance Equity Plan provided for the issuance of up to
400,000   shares  of  common   stock  to  employees,  officers,   directors  and
consultants.  The  awards were to consist of incentive and nonqualified options,
stock  appreciation  rights,  restricted,  deferred  stock  and  other   awards,
including  outright  grants  as  described in such Plan.  The Board of Directors
determined  terms  and vesting periods.  On May 14, 2002, as consented to by the
Board  of  Directors,  the  Company issued 100,000 common shares under the Plan,
exhausting  the availability of any further grants thereunder.  (See Notes 8 and
9C).

    (C)          2002  Award  and  Incentive  Plan:

In  April  2002,  the Board of Directors determined it was in the Company's best
interests  to  adopt  the 2002 Stock Award and Incentive Plan (the "2002 Plan"),
with  the approval of shareholders.  The 2002 Plan provides for a broad range of
awards,  including  incentive and non-qualified options, restricted and deferred
stock,  performance  awards, stock appreciation rights and other types of equity
awards.  A  total  of  2,000,000  of  shares  of  Common  Stock are reserved and
available  for  grant  under  the  2002 Plan.  The 2002 Plan carries forward the
automatic  annual  grant  of  2000 options to each director provided by the 1996
Plan.  The  Company's  shareholders  ratified  the 2002 Plan in June 2002.  (See
Part  II,  Item  4).

(Note  10)     Litigation
               ----------

In  April 2002, ICS was named as the defendant in a breach of contract complaint
brought  by  a  customer  who had ordered computer equipment pursuant to a fixed
bid.  The  complaint  specified  damages  of  $91,052 plus costs.  As advised by
special  litigation  counsel,  management  does not believe that any significant
loss  to  the  Company  will  result.  (See  Part  II,  Item  1).



                                        9
<PAGE>


(Note  11)     Adoption  of  SFAS  No.  142
               ----------------------------

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No.  142,  "Goodwill  and Other Intangible Assets," ("SFAS 142").  In
accordance with this pronouncement, goodwill is no longer periodically amortized
against operations, but is tested for impairment using a fair value methodology.
Upon  adoption, the carrying value of goodwill is required to be assigned to one
or  more business reporting units. The Company's operations are comprised within
one  such reporting unit. The new standard requires a two-step test to determine
the  impairment of the recorded value of goodwill; the first step determines the
existence  of  impairment  and  the  second  step  quantifies  the amount of any
impairment.  The  two  steps  must  be  completed  within six and twelve months,
respectively,  of  adoption.  If  the  first  step  indicates no impairment, the
second step is obviated.  The Company performed the first step during the second
quarter  of  fiscal 2002, using its market capitalization as the measure of fair
value; such test indicated no impairment of the Company's goodwill as of January
1,  2002.  SFAS  142 refers to the first time an entity performs such impairment
test  as  the  transitional impairment test.  The pronouncement also requires an
annual  impairment test for all years beginning with the year of adoption.  SFAS
142  provides  that  the  transitional  test may not be used as the first year's
annual  test  unless  the  entity specifies that all future annual tests will be
performed  at  the  beginning  of the year, that is, during the first quarter of
each  succeeding  year.  The  Company  has  determined  that it will perform all
future  annual  impairment tests as of the beginning of  each succeeding  fiscal
year.

The  following  table  reflects  reported  results  of operations for the second
quarter  and  first  six  months of fiscal 2002 as well as the adjustment of the
reported  net  loss  for  the  comparable periods of fiscal 2001 that would have
occurred  if  the new standard had been applied at the beginning of 2001.  Basic
and  diluted  loss  per  share  for  2001  would  not  have  been  affected.

<TABLE>
<CAPTION>




                                              Quarter  Ended June 30,              Six Months Ended June 30,
                                              ------------------------           ---------------------------
                                                 2002                 2001          2002                     2001
                                                -----                -----         -----                    -----
<S>                                   <C>                       <C>                <C>               <C>
    Reported net income (loss) . .          $   62,682       $   (365,209)      $   100,906          $   (679,316)
    Add back: Goodwill amortization.                 -             59,348                 -               118,696
                                      ----------------     ---------------     -------------        --------------
    Adjusted net income (loss) . . .        $   62,682       $   (305,861)      $   100,906          $   (560,620)
                                      ================       =============     =============         =============
</TABLE>


(Note  12)     Earnings  (Loss)  Per  Share
               ----------------------------

Basic  and diluted weighted average shares outstanding for each of the first and
second quarters of fiscal 2002 and for the current year-to-date six-month period
are  derived  as  follows.  There were no dilutive shares entering into the 2001
calculations.

<TABLE>
<CAPTION>


<S>                                                               <C>           <C>              <C>

                                                                   First           Second          Six Months
                                                                   Quarter         Quarter              Ended
                                                                   2002             2002          June 30, 2002
                                                                  --------         -------        -------------
Basic weighted average
 shares outstanding                                               93,556,522       93,722,709        93,640,303
Dilutive effect of outstanding common
 stock purchase options and warrants                                   4,587            3,096             3,914
                                                               -------------       -----------      -----------
Diluted weighted average
 shares outstanding                                               93,561,109       93,725,805        93,644,217
                                                                 ===========       ==========       ===========
</TABLE>


Previously  reported  dilutive  shares for the first quarter of fiscal 2002 were
understated by 4,127 shares.  Such understatement did not affect the calculation
of  earnings  per  share  for  that  quarter.

(Note  13)     Subsequent  Lease  Modification
               -------------------------------

In July 2002,  the Company extended the lease term for two of its suites through
June  30,  2005  at  an  annual  aggregate rental of $77,000, and gave notice of
termination,  effective  September 1, 2002 and without penalty, of the lease for
the  third  suite,  which  had  an  annual  rental  of  $33,600.



                                       10
<PAGE>
Item  2.     Management's  Discussion  and  Analysis  of Financial Condition and
             Results  of  Operations

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

Forward-Looking  Statements

     When used in this Form 10-QSB and in future filings by the Company with the
Securities  and Exchange Commission, the words or phrases "will likely result,",
"management  expects"   or   "the  Company  expects,"   " will  continue,"  " is
anticipated,"  "estimated"  or  similar  expressions  are  intended  to identify
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange  Act  of  1934,  as  amended.  Readers are cautioned not to place undue
reliance  on any such forward-looking statements, each of which speak only as of
the  date  made.  Such statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results and
those  presently  anticipated  or  projected.  The  Company has no obligation to
publicly  release  the  result  of  any  revisions,  which  may  be  made to any
forward-looking  statements  to  reflect  anticipated or unanticipated events or
circumstances  occurring  after  the  date  of  such  statements.

Recent  Accounting  Pronouncements:

     On  January  1,  2002,  the  Company   adopted  SFAS  No.  141,   "Business
Combinations"  and  SFAS  No. 142, "Goodwill and Other Intangible Assets."  As a
result,  the  Company stopped amortizing goodwill as a charge against operations
during  the  first  quarter  of  2002.  In  addition, the Company is required to
conduct  an  annual  review  of  goodwill  for potential impairment. The Company
completed  its  review  and  did  not have to record a charge to earnings for an
impairment  of  goodwill  as a result of the new standards.  (See Note 11 to the
Condensed  Consolidated  Financial  Statements).

     In  August  2001,  the Financial Accounting Standards Board issued SFAS No.
143  "Accounting for Asset Retirement Obligations" which addresses the financial
accounting  and  reporting  for  obligations  associated  with the retirement of
tangible long-lived assets and the associated assets' retirement costs.  The new
standard  will  be  effective  for years beginning January 1, 2003.  The Company
does  not  anticipate that this new standard will have any significant effect on
its  future  financial  condition  or  results  of  operations.

     Effective  January  1,  2002, the Company adopted SFAS No. 144, "Accounting
for  the  Impairment  or Disposal of Long-Lived Assets," which replaces SFAS No.
121,  "Accounting  for the Impairment of Long-Lived Assets and Long-Lived Assets
to  be  Disposed  Of."  SFAS  No.  144  provides updated guidance concerning the
recognition  and  measurement  of  an  impairment  loss  for  certain  types  of
long-lived  assets,  expands  the scope of a discontinued operation to include a
component  of  an  entity  and  eliminates  the  exemption to consolidation when
control  over  a subsidiary is likely to be temporary.  The adoption of this new
standard  did  not  have  a material impact on the Company's financial position,
results  of  operations  or  cash  flows.

     In  April  2002,  the  Financial Accounting Standards Board issued SFAS No.
145,  "Rescission  of  FASB  Statements  No.  4,  44,  and 64, Amendment of FASB
Statement  No. 13, and Technical Corrections."  This Statement rescinds SFAS No.
4,  "Reporting  Gains  and  Losses  from  Extinguishment  of Debt," SFAS No. 44,
"Accounting  for  Intangible Assets of Motor Carriers," and an amendment to SFAS
No.  4,  SFAS  No.  64,  "Extinguishments  of  Debt Made to Satisfy Sinking-Fund
Requirements."  SFAS  No.  145  also  amends  paragraph  14(a)  of  SFAS No. 13,
"Accounting  for  Leases,"  to eliminate an inconsistency between the accounting
for  sale-leaseback  transactions  and  certain  lease  modifications  that have
economic  effects  that are similar to sale-leaseback transactions.  The Company
does not believe the effects of this new standard will have a material effect on
its future financial condition or operations.

     On  July 30, 2002, the Financial Accounting Standards Board issued SFAS No.
146,  "Accounting  for  Costs Associated with Exit or Disposal Activities." SFAS
No.  146  requires companies to recognize costs associated with exit or disposal
activities  when they are incurred rather than at the date of a commitment to an
exit  or disposal plan.  Costs covered by SFAS No. 146 include lease termination
costs   and  certain  employee  severance  costs  that  are  associated  with  a
restructuring,  discontinued  operation, plant closing or other exit or disposal
activity.  This  statement is effective for exit or disposal activities that are
initiated  after  December  31,  2002.  Accordingly,  the Company will apply the
provisions of SFAS No. 146 prospectively to exit or disposal activities, if any,
initiated after December 31, 2002.





                                       11
<PAGE>




Results  of  Operations:

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001:

     For  the  three  months  ended  June  30,  2002,  total  revenues increased
$639,185,  or  82.7%,  to $1,411,742 from $772,557 one year ago, as subscription
revenues  nearly  doubled  and installation, maintenance and consulting revenues
almost  tripled,  while  hardware  and  other  sales  fell by a little less than
one-half.  As described below, a major portion of subscription revenues recorded
during  the  quarter  will  not  recur  as a result of the loss of the Company's
largest Internet services customer and the timing and amount of further overseas
networking revenues subsequent to August of this year is presently uncertain.

     Subscription  revenues  increased by $452,487, or 98.9%, to $909,862 in the
current  quarter  from  $457,375  one year ago.  The Company's largest customer,
Ultrastar,   accounted  for  $716,358,   or  78.7%  of  the  current   quarter's
subscription  revenues  and  50.7%  of  total  revenues in the quarter.  For the
corresponding  period  of  2001,  sales to Ultrastar were $294,220, or 64.3% and
38.1%  of  subscription  and  total  sales, respectively.  As disclosed in prior
filings  by  the  Company,  Ultrastar  had  previously advised VillageNet it was
considering  diversifying  its sources of Internet hosting and related services.
Effective  June 30, 2002, Ultrastar ceased to be a customer of the Company.  The
loss  of  this customer will be largely mitigated due to the high cost of sales,
approximately 85%, historically associated with subscription revenues.

     Installation,  maintenance  and  consulting  service  revenues increased by
$264,206, or 188.1%, to $404,692 in the 2002 quarter from $140,486 one year ago.
This increase was due entirely to the Company's sub-contracting work on the RSAF
Prince  Sultan  Air Force Base computer network upgrade project in Saudi Arabia,
pursuant  to  a  verbal  agreement.  Three  monthly contract-related payments of
$100,000  each  were received during the quarter, of which the third represented
the  first  of three payments related to a second verbal contract awarded to the
Company  by  AID  in  May  2002.  Such  second  contract encompassed payments of
$100,000  through  August 2002, all but $60,000 of which had been received as of
August 15, 2002, with the balance expected in the latter part of the month.

     Hardware  sales fell by $72,252 or 42.6%, to $97,163 in the current quarter
of  2002  from  $169,415  in  the  second  quarter  one year ago.  This decrease
continues  the  recent  trend  of  lower  hardware sales as the Company has been
focusing  on  higher  margin  consulting, installation and maintenance services.
Other revenues were insignificant during the current quarter, further reflecting
the  Company's  concentration  on  its  principal  operations.

     Cost  of  sales  was  $912,070, representing 64.6% of total revenue for the
three  months  ended  June 30, 2002, compared to $566,647, constituting 73.3% of
total  revenues  for  the  same  period  one  year  ago,  reflecting  the higher
proportion  this  year  of  total  revenues from networking operations.  Cost of
sales  of VillageNet was $767,233, or 84.3% of revenues for the current quarter,
compared  to  $433,053, comprising 94.7% of related revenues one year ago.  This
increase  in  margin  reflects  certain  economies of scale associated with high
subscription  revenues,  however  even  at  the historically high levels of such
revenues  in  the  current  quarter, the gross margin contribution only narrowly
exceeds  15%.  Cost  of  sales  of  ICS was $144,839 or 28.6% of hardware sales,
installation services and maintenance/consulting for the three months ended June
30,  2002,  compared to $133,594, or 42.7%, one year ago.  The large decrease in
these  costs as a percentage of sales for ICS reflects the significantly greater
mark-up  earned  by  the  Company on its much-increased labor-based maintenance,
installation  and  consulting  services.

     Total  gross  margin  increased  by $293,762, or 142.7%, to $499,672 in the
current  quarter  from  $205,910  one  year ago.  As a percentage of sales, this
measure  increased  by  8.7%  to  35.4%  from  26.7%.

     Selling, general and administrative expenses ("SG&A") were $413,576 for the
quarter  ended June 30, 2002, a decrease of $69,262, or 14.3%, from $482,838 one
year  ago.  Payroll and related benefits, which comprise the largest single item
in  this expense classification, led the decrease in this category as a whole by
declining $94,740, or 25.9% to $234,995 in 2002 from $329,935 in 2001.  Bad debt
expense  increased  by  $10,000  from  none  in  the prior year's period, as the
Company  reserved approximately 42% of one Internet services customer's accounts
receivable  balance.  Historically  the  Company has had very few bad debts; the
Company does not believe the possible losses associated with this one particular
customer reflect a trend, rather a situation specific to this one account.  As a
percentage  of sales, SG&A costs fell by 33.2% to 29.3% in the 2002 quarter from
62.5%  in 2001.  Of the total SG&A expenses in the current quarter, $140,058, or
15.4% of sales, was for VillageNet and $273,518, or 54.5% of sales, was for ICS,
compared  to $111,580 and $371,258, 24.4% and 119.8% of sales, respectively, one
year  ago.  For  both  VillageNet  and  ICS,  the  improvements  reflect various
economies  of  scale  related to the higher level of revenues during the current
quarter.



                                       12
<PAGE>
     The  Company adopted SFAS No. 142 effective January 1, 2002 and accordingly
ceased  amortization of goodwill.  For the 2001 quarter amortization of goodwill
was  $59,348, or 7.7% of sales.  The Company conducted the transitional goodwill
impairment  test  during  the second quarter of 2002. Such test, performed as of
January  1,  2002,  showed  no impairment of the carrying value of the Company's
goodwill.

     Interest  expense decreased by $3,519, or 12.2%, to $25,414 for the quarter
ended  June  30,  2002  from  $28,933  one  year  ago.  Included in this expense
category  are  certain  vendor  late  charges,  incurred  by  the  Company as an
unavoidable  consequence  of  its  tight  cash  position.  The  Company has been
working  closely  with its vendors to keep such late charges to a minimum.  Such
late  charges  decreased noticeably in the current quarter as positive operating
cash  flow  during the period allowed the Company to better manage its trade and
other   current   payables.   Also  contributing  to  savings  in  this  expense
classification  were  lower interest charges on the Company's bank debt, charged
at  2%  over  the bank's prime rate.  Interest is also incurred on the Company's
related  party  debt.  Although  a portion of such debt bears no or below market
interest  rates,  the Company imputes interest expense up to a fair market value
therefor,  7.5%  per  annum for the applicable periods.  Increase in accrued and
imputed  related party interest partially offset the savings in late charges and
bank  interest.

     Total  costs and expenses increased by $213,294, or 18.7%, to $1,351,060 in
the  current quarter from $1,137,766 one year ago, but decreased as a percentage
of  total  sales  by  51.6%  to  95.7%  this  period  from  147.3%  last  year.

     Pre-tax  income  for  the  quarter was $60,682, representing 4.3% of sales,
compared to a pre-tax loss of $365,209 constituting 47.3% of sales one year ago.
The 51.6 % improvement reflects the increase in gross profit of $293,762 and the
decrease  in the ratio of SG&A expenses to gross profit by 151.7% from 234.5% in
2001  to  82.8%  in  2002,  as well as the cessation of periodic amortization of
goodwill.  This  quarter  and the prior quarter of this fiscal year are the only
profitable  quarterly  periods  the  Company has recorded since the merger three
years  ago.

     The Company has revised its estimate of its expected effective tax rate for
2002  and  reversed  a  provision of $2,000 provided last quarter.  Such revised
estimate  arises  from  a previous change in the tax rules relating to corporate
alternative  minimum  taxable  income  in connection with the utilization of net
operating  tax  loss  carry-forwards. The Company had not considered the revised
rules when it previously estimated an effective tax rate of five percent for the
current  fiscal  year.  Based on its corrected analysis, the Company's effective
tax  rate  for 2002 will be zero irrespective of its results for the rest of the
year  given  its  tax  loss  carry-forward of approximately $3,100,000 as of the
beginning  of  fiscal  2002.

     Net  income for the 2002 quarter was $62,682 compared to a net loss for the
2001  quarter of $365,209 an improvement of $427,891.  Preferred stock dividends
totaled  $13,166 in the 2002 quarter and $16,770 in 2001.  Net income applicable
to  common  stockholders was accordingly $49,516 in the current quarter compared
to a net loss applicable to common stockholders of $381,979 in the corresponding
quarter  of  2001,  an  improvement of $431,495.  As equivalent weighted average
common  shares  outstanding exceeded 90,000,000 shares in both periods, earnings
(loss)  per  common  share  was less than $.01 in both the current and the prior
year quarters.

     On a pro-forma basis, giving retroactive effect to the adoption of SFAS No.
142  and the cessation of amortization of goodwill, pre-tax and net loss for the
2001  quarter  would  have  been  $305,861  and  net loss attributable to common
shareholders  for  such period would have been $322,631. Therefore the pro-forma
improvement  in  net  income/loss  and  net  income/loss  applicable  to  common
shareholders  for  the  current  periods  would have been $368,543 and $372,148,
respectively.  The  per  share  results  on such pro-forma basis would have been
unchanged.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

     The Company's total revenues increased $459,726, or 22.6% to $2,496,654 for
the  six months ended June 30, 2002 from $2,036,928 for the corresponding period
of  2001.   This  revenue  growth   was  principally  due  to  the  increase  in
VillageNet's  subscription  service revenue of $508,644, or 52.0%, to $1,487,403
for  the  current  six  months  from  $978,759  one  year ago.  This increase in
subscription  service  revenue  was primarily attributable to a single customer,
Ultrastar,  for  whom  the  Company  provided Private Label Internet hosting and
related  services  under  names they are contractually permitted to use, such as
David  Bowie,  Gaither  and  Hanson.  Ultrastar  terminated  their contract with
VillageNet  on  June  30,  2002  and  is  no longer a customer.  The Company had
disclosed  in  prior  periodic filings that Ultrastar had previously advised the
Company  it  was  considering  diversifying  its  source of Internet hosting and
related  services.   ICS's total revenues decreased slightly by $7,444, or 0.7%,
to  $1,008,005 for the current year-to-date period from $1,015,449 one year ago.
Of the total revenues for ICS, installation, maintenance and consulting revenues
more  than  tripled,  while  hardware  sales  fell  by  more   than  two-thirds.
Other  revenues  were insignificant in 2002; those from 2001 did not recur.



                                       13
<PAGE>

     Ultrastar accounted for $1,086,175 of subscription revenues for the current
six months compared to $593,325 for the comparable period of 2001. These amounts
comprised  73.0%  and  60.6%  of  subscription revenues during those periods and
43.5%  and  29.1% of total revenues.  For fiscal 2001, Ultrastar comprised 61.4%
and  33.6%  of  the Company's subscription and total revenues, respectively.  As
the  gross  profit  on  the  cancelled  services averages approximately 15%, the
overall  impact  on  the Company is expected to be manageable, particularly when
related  savings  in  administrative  support  are  considered, both in terms of
personnel  and  occupancy  cost; the Company has negotiated a termination option
for the leased suite that presently houses such support operations.

     Installation,  maintenance and consulting revenues increased by $545,662 or
218.8%  to  $795,024  in the current six months from $249,362 one year ago.  The
increase  reflects  six  monthly  $100,000  payments  received and earned on two
verbal RSAF sub-contracts, the second of which began in June and extends through
August  of  this  year.  The amount and timing of subsequent overseas networking
revenues  is  presently  uncertain.  (See  Results  of  Operations for the Three
Months  Ended  June  30,  2002 and 2001 and Note 2 to the Condensed Consolidated
Financial Statements).

     Hardware sales decreased by $553,106 or 72.2% for the six months ended June
30,  2002,  continuing  the trend of prior quarters and reflecting a slowdown in
capital  expenditures  by  the Company's domestic customers, consistent with the
economy   as  a  whole.   The  Company's  overseas  sub-contracting   operations
presently  do not include sales of hardware. Hardware sales have always been one
of the higher cost components of the Company's revenues and the Company does not
expect a significant change in this downward trend for domestic customers in the
foreseeable  future,  although the Company has seen recent indications of a slow
recovery  in  its  domestic networking business, which is principally with local
school  districts.  Certain  overseas  projects the Company is presently seeking
may include hardware sales in the future.

     Cost  of  sales was $1,527,862, representing 61.2% of total revenue for the
current six months, compared to $1,492,458, representing 73.3% of total revenues
for  the  year-to-date  period  one  year  ago.  Cost of sales of VillageNet was
$1,249,445 or 84.0% of related revenues, compared to $830,680, or 84.9% of sales
one  year  ago.  Cost  of sales of ICS was $278,417, or 27.6% of hardware sales,
installation  services  and maintenance/consulting for the six months ended June
30,  2002  compared  to  $661,778 or 65.2%, one year ago.  The large increase in
gross margin as a percentage of sales for ICS reflects the significantly greater
mark-up  earned  by the Company on its labor-based maintenance, installation and
consulting  services  compared  to  hardware sales and the relative mix of ICS's
revenues.

     Total  gross  margin  increased  by  $424,322, or 77.9%, to $968,792 in the
current  six  months from $544,470 one year ago.  As a percentage of sales, this
measure increased by 12.1%  to  38.8% from 26.7%.

     Selling, general and administrative expenses ("SG&A") were $812,313 for the
current  six  months,  a decrease of $237,897, or 22.7%, from $1,050,210 for the
year-to-date period one year ago.  This decrease was primarily attributable to a
decrease  in payroll and related benefits of $203,888, or $28.5%, to $480,878 in
2002  from  $684,166  in  2001.  Of  the total SG&A expenses for the current six
months,  $235,808  is attributable to VillageNet and $576,505 is attributable to
ICS compared to $287,515 and $762,695 for the corresponding period one year ago.
As  a  percentage of sales, total SG&A expenses were 32.5% and 51.6% for the six
months  ended  June  30,  2002  and  2001,  respectively.  For VillageNet, these
percentages were 15.9% this year and 29.4% last year and for ICS they were 57.2%
this year and 75.1% last year.

     Amortization  of  goodwill  was $118,696 for the 2001 six-month period.  In
accordance  with  SFAS No. 142, effective January 1, 2002, goodwill is no longer
systematically  amortized  to  operations,  but is subject to periodic tests for
impairment.  The  Company  conducted  the  required transitional impairment test
during  the second quarter of 2002.  Such test, performed as of January 1, 2002,
resulted in no impairment to the carrying value of the Company's goodwill.  (See
Note 11 to the Condensed Consolidated Financial Statements).

     Total  interest expense was relatively unchanged at $55,573 for the current
six  months  compared to $54,880 for the prior year.  Increases in related party
accrued  and  imputed  interest  were  almost  entirely  offset  by reduced bank
interest and vendor late charges.

     Total  costs and expenses decreased by $320,496, or 11.8%, to $2,395,748 in
the  current  six  months  from  $2,716,244  one  year  ago  and  decreased as a
percentage of total sales by 37.4% to 96.0% this period from 133.4% last year.


                                       14
<PAGE>
     Pre-tax  income  for   the  current   year-to-date  period  was   $100,906,
representing  4.0% of sales, compared to a pre-tax loss of $679,316 constituting
33.4%  of  sales  one year ago.  The 37.4 % improvement reflects the increase in
gross profit of $424,322 and the decrease in the ratio of SG&A expenses to gross
profit  by 109.1% from 192.9% in 2001 to 83.8% in 2002, as well as the cessation
of periodic amortization of goodwill.  The current fiscal year is the first time
the  Company  has  been  profitable  since  the merger occurred on July 1, 1999.

     As  a  result  of  recent  changes  in  the tax law applicable to corporate
minimum  taxable  income in connection with the utilization of net operating tax
loss  carry-forwards,  the  Company  estimates its effective tax rate for fiscal
2002  will  be zero, irrespective of its results for the rest of the year, given
its  tax  loss  carry-forward of approximately $3,100,000 as of the beginning of
fiscal 2002.

     Net  income  for the 2002 six months was $100,906 compared to a net loss in
the  prior  period  of  $679,316  an  improvement  of $780,222.  Preferred stock
dividends  were  $26,572  in  the  current period and $34,257 one year ago.  Net
income  applicable to common stockholders was accordingly $74,334 in the current
period  compared  to a net loss applicable to common stockholders of $713,573 in
the  corresponding  period  last year, an improvement of $787,907.  Earnings per
share  were  nil in the current period while the loss last year on an equivalent
per share basis was $.01.

     On a pro-forma basis, giving retroactive effect to the adoption of SFAS No.
142  and the cessation of amortization of goodwill, pre-tax and net loss for the
2001  six  months  would  have been $560,620 and net loss attributable to common
shareholders  for  such period would have been $594,877. Therefore the pro-forma
improvement  in  net  income/loss  and  net  income/loss  applicable  to  common
shareholders  for  the  current  periods  would have been $661,526 and $669,211,
respectively.  The  per  share  results  on such pro-forma basis would have been
unchanged.

Liquidity  and  Capital  Resources

     Cash and cash equivalents at June 30, 2002 increased by $84,311 to $175,375
from  $91,064  at December 31, 2001.  The increase in cash was in large part due
to the receipt in late May of $148,185 of funds disbursed to the Company as part
of a federally assisted program to enhance participating school districts access
to  Internet  technology.  Such  funds  which  constitute a discount on Internet
services  purchased from the Company by the school districts are administered by
a  government  contracting agency and are routed through the Company.  The above
amount was re-disbursed by the Company to the school district in early July.

     Accounts receivable decreased by  $40,662 to $362,907 at June 30, 2002 from
$403,569 at December 31, 2001.  The decrease reflects an overall faster turnover
of receivables as the sub-contract related payments from AID are received in the
month to which such billing applies.

     Inventory  decreased  by  $117 to $24,949 at June 30, 2002.  The relatively
small  balance  and  small  changes  in  this  account reflect the reductions in
hardware sales and the decreased activity in this area.

     Prepaid  expenses  and other current assets decreased by $47,008 to $43,139
at  June  30, 2002 from $90,147 at December 31, 2001, reflecting amortization of
prepaid insurance and other routine reductions in the accounts therein.

     Accounts  payable and accrued expenses decreased by $189,395 to $652,461 at
June  30,  2002  from  $841,856  at  December  31,  2001  as the Company applied
approximately  sixty-five  percent  of all available cash flow to reducing these
current payables during the six-month period.

     Commissions  payable,  related  to  the  Company's Internet hosting service
revenues,  increased  by  $15,079 to $198,267 at June 30, 2002 from  $183,188 at
December  31,  2001, reflecting the increases in the related revenues.  Deferred
income  decreased  by  $158,469  to  $60,207  at  June 30, 2002 from $218,676 at
December  31, 2001, principally attributable to the termination of the Ultrastar
contract.

     Notes  and loans payable increased by $7,264 to $1,157,073 at June 30, 2002
from $1,149,809 at December 31, 2001.  The increase reflects interest of $14,848
accrued  during  the  six months ended June 30, 2002 on loans payable to related
parties  less  repayments  thereon  of  $7,584.  Such  loans,  totaling $964,355
inclusive  of  accrued  interest  are  due  on demand. Notes payable to the bank
remained  unchanged  at  $192,718  at June 30, 2002.  Borrowings under the line,
which  may not exceed $200,000, are due on demand; if no demand is made, payment
of  the  outstanding  balance  is  due on the maturity date of the line, May 31,
2003, subject to further renewal at the bank's option.


                                       15
<PAGE>

     Operating activities provided cash of $91,282 for the six months ended June
30,  2002  compared  to  $317,925 required for the corresponding period one year
ago.  This  improvement reflects the current period income compared to the large
loss  one  year  ago,  less  the  effect  of the significant reductions in trade
liabilities as well as deferred income.

     For  the  2002 period, $13 was provided by investing activities compared to
$380 provided one year ago.

     Financing  activities  required  cash  of  $6,984  for  the  2002  period,
principally  for  related party debt repayments.  Bank loan proceeds and related
party loans provided $184,862, one year ago.

     At  June  30,  2002,  the  Company decreased its working capital deficit by
$173,860  to $1,609,823 from $1,783,683 at December 31, 2001.  The large working
capital  deficit  raises  the  question of the Company's continuation as a going
concern.  Included  in such working capital deficit is $964,355 of related party
debt,  presently  due on demand.  The Company is endeavoring to restructure this
debt, but cannot realistically do so until the present uncertainty regarding the
awarding  of future overseas networking contracts is  resolved.  Both AID, which
has  advised  the  Company  it would use it as a sub-contractor as it has in the
recent  past,  and  the  Company  are pursuing future projects, with the portion
applicable  to the Company, either indirectly or directly, ranging from moderate
seven  figure  to  low  eight  figure  amounts.  However  as neither AID nor the
Company  is  assured  of  being  awarded any subsequent contracts, the Company's
continuation as a going concern is seriously in question.  In July and August of
2002, the Company received $140,000 applicable to its second verbal sub-contract
with AID and the remaining balance of $60,000 is expected during the latter part
of  August.  Management  is  hopeful  it will be successful in restructuring the
Company's  related  party debt, securing additional overseas networking projects
and  continuing  the  profitable operations it has recorded in 2002, despite the
loss  of  Ultrastar,  but  no  assurances  can  be given in this regard.  At the
present  time,  there  are  no  funding  commitments  from any source beyond the
$60,000  remaining payment on the second verbal sub-contracting agreement.  (See
Note 2 to the Condensed Consolidated Financial Statements).






Part  II.          Other  Information

Item  1.          Legal  Proceedings

On  April  1,  2002,  ICS  was  named  as  the defendant in a breach of contract
complaint  brought  by  Metro-North  Commuter Railroad.  Metro-North had ordered
computer equipment pursuant to a fixed bid.  The complaint, presently pending in
New  York  County Supreme Court specifies damages of $91,052 plus costs, arising
from  ICS' alleged failure to deliver certain equipment at prices specified in a
fixed  bid.  ICS  alleges  that  the price quote it received on the equipment in
question from its supplier, who is not a party to the litigation at present, was
understated,  and as a result ICS should not be held responsible for any damages
suffered  by  the  plaintiff.  Neither  depositions nor a trial date have as yet
been  scheduled.  See Note 10 to the condensed consolidated financial statements
included in Part I hereof.

Item  2.          Changes  in  Securities

See Notes 7 and 8 to the condensed consolidated financial statements included in
Part I hereof.

The  Company  received  no  cash in the transactions described in Notes 7 and 8.
The  Company's issuances of common shares described therein were exempt from the
registration requirements of the Securities Act of 1933, as amended, pursuant to
the  provisions  of  Section  4(2)  thereof  as  transactions  by  an issuer not
involving any public offering.


                                       16
<PAGE>
Item  4.          Submission  of  Matters  to  a  Vote  of  Security  Holders

On  June  27,  2002,  the Company held its annual meeting of shareholders at the
offices  of its counsel, Feder, Kaszovitz, Isaacson, Weber, Skala, Bass & Rhine,
LLP,  750  Lexington  Avenue,  New  York, NY.  The purpose of the meeting was to
elect  five directors for the ensuing year, ratify the selection by the Board of
Directors  of  the  Company's  independent  auditor  for  the fiscal year ending
December  31,  2002  and  ratify  and approve the Company's 2002 Stock Award and
Incentive  Plan.  No matters other than those set forth below were voted upon at
the meeting.

The  five directors nominated by management and comprising the entire board were
elected.  There  was  no  solicitation  in  opposition  to the slate proposed by
management.  The  name of each director elected and the number of votes cast for
or withheld is set forth below:

Name of Director        Votes For       Votes Withheld          Total Votes Cast
------------------      -----------     ---------------         ----------------

Peter  J.  Keenan           84,739,277             131,744            84,871,021
David  A.  Levi             84,728,886             142,135            84,871,021
Hector  M.  Gavilla         84,730,028             140,993            84,871,021
Moshe  Schwartz             84,727,686             143,335            84,871,021
Dr.  Steven  Levi           84,728,686             142,335            84,871,021


The  selection  by  the  Board  of  Directors of Laurence Rothblatt & Co. as the
Company's  independent  auditor  for  the  year  ending  December  31,  2002 was
ratified.  A total of 84,871,021 votes were cast as follows:

     For:  84,770,278          Against:     96,799         Abstain:  3,944

The  adoption of the Company's 2002 Stock Award and Incentive Plan was ratified.
A  total  of  74,704,851 votes were cast, excluding 10,166,170 broker non-votes.
Votes were cast as follows:

     For:  73,487,130          Against:  1,209,333         Abstain:  8,388

Item  6.     Exhibits  and  Reports  on  Form  8-K

(a)               Exhibits:

               Exhibit  99:  1  Certification  by  Chief  Executive  Officer*

               Exhibit  99:  2  Certification  by  Chief  Financial  Officer*

               *Filed  herewith

(b)               Reports  on  Form  8-K:  None


                                       17
<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.



                                 VillageWorld.com,  Inc.
                                 -----------------------
                                     (Registrant)



Dated:        August  15,  2002                 By:       /s/  Peter  J.  Keenan
                                                          ----------------------
                                   Peter  J.  Keenan,  Chairman  of  the  Board,
                                   President  and  Principal  Executive  Officer



Dated:        August  15,  2002                 By:    /s/  Celia  I.  Schiffner
                                                     ---------------------------
                                              Celia  I.  Schiffner,  Treasurer
                                              and  Chief  Financial  Officer



                                       18
<PAGE>