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


</FILER>
<PERIOD>     09/30/2001



                     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  September  30,  2001
                                                            --------------------

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

           For  the  transition  period  from                to
                                             ----------------  ----------------

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


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



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



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


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



    (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 November 12, 2001, the issuer had
outstanding  22,515,391  shares  of  Common  Stock,  par  value $.001 per share.
(Assuming  the  conversion  of  all  outstanding  Class  B  Preferred  Stock the
outstanding  common  stock  at  November  12,  2001 would increase to 92,640,367
shares).

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




                                        1
<PAGE>

<TABLE>
<CAPTION>


                                           VILLAGEWORLD.COM,  INC.
                                INDEX  TO  QUARTERLY  REPORT  ON  FORM  10-QSB
                            FILED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION
                                   Quarter  Ended  September  30,  2001

                                           ITEMS  IN  FORM  10-QSB




<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                   12


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

Item 1. . . . . . . . . . . . . . . .  Legal Proceedings                                    N/A

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  N/A

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

Item 6. . . . . . . . . . . . . . . .  Exhibits and Reports on Form 8-K                      16


Signatures. . . . . . . . . . . . . .                                                        17
</TABLE>


                                        2
<PAGE>

<TABLE>
<CAPTION>

                             VILLAGEWORLD.COM, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEET



                                                        September 30, 2001    December 31, 2000
ASSETS
<S>                                                    <C>                   <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . .  $            91,062   $          271,032
Accounts receivable, net of allowance for
uncollectibles. . . . . . . . . . . . . . . . . . . .              765,855              408,032
Inventory . . . . . . . . . . . . . . . . . . . . . .               25,066               49,872
Prepaid expenses and other current assets . . . . . .              113,888               68,251
                                                       --------------------  -------------------
  Total Current Assets. . . . . . . . . . . . . . . .              995,871              797,187


Fixed assets, net of accumulated depreciation . . . .              246,196              303,373
Goodwill, net of accumulated amortization . . . . . .            1,839,791            2,017,835
Other assets. . . . . . . . . . . . . . . . . . . . .               14,632               15,295
                                                       --------------------  -------------------
  TOTAL . . . . . . . . . . . . . . . . . . . . . . .  $         3,096,490   $        3,133,690
                                                       ====================  ===================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank . . . . . . . . . . . . . . . . .  $           192,718   $          125,000
Accounts payable and accrued expenses . . . . . . . .            1,075,306              780,719
Deferred income . . . . . . . . . . . . . . . . . . .              308,010              200,404
Loans payable, related parties. . . . . . . . . . . .              928,878              580,258
Other current liabilities . . . . . . . . . . . . . .              249,560              182,406
                                                       --------------------  -------------------
  Total Current Liabilities . . . . . . . . . . . . .            2,754,472            1,868,787


Accrued cumulative preferred stock dividends. . . . .               98,334               71,400
                                                       --------------------  -------------------
  Total Liabilities . . . . . . . . . . . . . . . . .            2,852,806            1,940,187
                                                       --------------------  -------------------

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

Stockholders'  Equity:
Convertible Class B preferred stock; $.001 par
value; 1,000,000 shares authorized; 508,152
shares issued and outstanding . . . . . . . . . . . .                  508                  508
Convertible Class C preferred stock; $.001 par
value, non-voting; redeemable at $125; 25,000 shares
authorized; 9,365 and 11,900 shares outstanding,
respectively. . . . . . . . . . . . . . . . . . . . .                    9                   12
Common stock; $.001 par value; 200,000,000 shares
authorized; 22,298,669 and 19,520,236 shares issued,
respectively. . . . . . . . . . . . . . . . . . . . .               22,299               19,520
Additional paid in capital. . . . . . . . . . . . . .            5,895,992            5,823,339
Accumulated deficit . . . . . . . . . . . . . . . . .           (5,605,980)          (4,582,732)
Stock subscription receivable . . . . . . . . . . . .               (4,520)              (2,520)
Treasury stock (65,279 shares at cost). . . . . . . .              (64,624)             (64,624)
                                                       --------------------  -------------------
  Total stockholders' equity. . . . . . . . . . . . .              243,684            1,193,503
                                                       --------------------  -------------------

  TOTAL . . . . . . . . . . . . . . . . . . . . . . .  $         3,096,490   $        3,133,690
                                                       ====================  ===================

</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                           Nine Months Ended
                                    September 30, 2001    September 30, 2000    September 30, 2001    September 30, 2000
                                                              (Restated)                                  (Restated)
                                   --------------------  --------------------   ------------------    ------------------
<S>                                  <C>                   <C>                   <C>                   <C>
REVENUES:
Subscription services . . . . . . .   $       593,300   $           325,609   $         1,572,059   $           595,684
Hardware sales. . . . . . . . . . .           277,406               597,351             1,043,493             1,294,353
Maintenance and consulting. . . . .            72,552               102,086               226,153               260,656
Installation services . . . . . . .            36,513               127,217               132,274               233,703
Private label cd roms . . . . . . .                 -                46,377                     -               439,877
Other revenues. . . . . . . . . . .            16,294                    77                59,014                67,220
                                     -----------------  --------------------  --------------------  --------------------
  Total revenues. . . . . . . . . .           996,065             1,198,717             3,032,993             2,891,493
                                     -----------------  --------------------  --------------------  --------------------

COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . .           825,218             1,012,892             2,317,676             2,319,010
Selling, general and administrative           385,963               604,492             1,436,173             1,872,584
Amortization of excess of cost over
fair value of net assets acquired .            59,348                59,349               178,044               178,045
Interest expense. . . . . . . . . .            20,929                13,954                75,809                37,243
                                     -----------------  --------------------  --------------------  --------------------
  Total costs and expenses. . . . .         1,291,458             1,690,687             4,007,702             4,406,882
                                     -----------------  --------------------  --------------------  --------------------

Net loss. . . . . . . . . . . . . .          (295,393)             (491,970)             (974,709)           (1,515,389)

Preferred stock dividends paid
in-kind and accrued . . . . . . . .            14,282                17,276                48,539                53,550
                                     -----------------  --------------------  --------------------  --------------------

Net loss attributable to common
stockholders. . . . . . . . . . . .  $       (309,675)  $          (509,246)  $        (1,023,248)  $        (1,568,939)
                                     =================  ====================  ====================  ====================

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

Basic and diluted weighted average
common shares outstanding,
giving effect to the conversion
to common stock of all Class B
Preferred Stock outstanding . . . .        92,055,879            89,571,179            90,830,439            89,196,367
                                     =================  ====================  ====================  ====================

</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 Nine Months Ended September 30, 2001


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

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

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

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

Shares issued for executive
compensation . . . . . . . . .                                                                   200,000           200

Shares issued for services . .                                                                    75,000            75

Accrued  cumulative dividends
on preferred stock

Capital contribution imputed
for interest expense

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

Balance, September 30, 2001. .          508,152   $            508          9,365  $     9    22,298,669    $   22,299
                                ================  =================  ============  =======  ============  =============


</TABLE>


<TABLE>
<CAPTION>




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

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

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

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

Shares issued for executive
compensation . . . . . . . . .       20,800                      (2,000)                                        19,000

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

Accrued  cumulative dividends
on preferred stock . . . . . .                     (45,923)                                                    (45,923)

Capital contribution imputed
for interest expense . . . . .       25,324                                                                     25,324

Net loss . . . . . . . . . . .            -       (974,709)           -                -                -     (974,709)
                                ------------  -------------  -----------  ---------------  ---------------  -----------

Balance, September 30, 2001. .  $ 5,895,992   $ (5,605,980)  $   (4,520)         (65,279)  $     (64,624)   $  243,684
                                ============  =============  ===========  ===============  ===============  ===========



</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



                                                                           Nine Months Ended September 30,
                                                                           2001            2000 - (Restated)
                                                                      ------------------  ------------------
<S>                                                     <C>                                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . . .                $         (974,709)  $      (1,515,389)
                                                                      -------------------  ------------------

Adjustments to reconcile net loss to net cash
used by operating activities:
  Depreciation and amortization. . . . . . . . . . . .                           235,662             238,830
  Stock issued for compensation. . . . . . . . . . . .                            26,500             137,500
  Interest expense accrued and imputed on
  related party loans. . . . . . . . . . . . . . . . .                            36,800              32,118
  Gain on disposal of fixed assets, net. . . . . . . .                                 -              (6,500)
  Deferred  promotional cost . . . . . . . . . . . . .                                 -              27,265
  Decrease (increase) in:
      Accounts receivable. . . . . . . . . . . . . . .                          (357,823)           (366,946)
      Inventory. . . . . . . . . . . . . . . . . . . .                            24,806             (91,600)
      Prepaid expenses and other current assets. . . .                           (45,637)             (4,793)
  Increase (decrease) in:
      Accounts payable and accrued expenses. . . . . .                           294,587             820,471
      Deferred income. . . . . . . . . . . . . . . . .                           107,606             178,728
      Current liabilities attributable to discontinued
      operations . . . . . . . . . . . . . . . . . . .                                 -            (426,727)
      Other current liabilities. . . . . . . . . . . .                            67,154               5,608
                                                                      -------------------  ------------------
  Total adjustments. . . . . . . . . . . . . . . . . .                           389,655             543,954
                                                                      -------------------  ------------------
  Net cash used by operating activities. . . . . . . .                          (585,054)           (971,435)
                                                                      -------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of fixed assets . . . . . . . . . . . . . .                                 -             (65,092)
  Proceeds from sale of fixed assets . . . . . . . . .                                 -               6,500
  Increase in deposits . . . . . . . . . . . . . . . .                                 -              (3,058)
  Decrease in other assets . . . . . . . . . . . . . .                               222                   -
                                                                      -------------------  ------------------
Net cash provided (used) by investing activities . . .                               222             (61,650)
                                                                      -------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Note payable proceeds (repayments), net. . . . . . .                            67,718            (200,000)
  Proceeds from issuance of common stock . . . . . . .                                 -             496,875
  Proceeds of related party loans. . . . . . . . . . .                           337,144              75,000
                                                                      -------------------  ------------------
Net cash provided by financing activities. . . . . . .                           404,862             371,875
                                                                      -------------------  ------------------

NET DECREASE IN CASH . . . . . . . . . . . . . . . . .                          (179,970)           (661,210)
Cash, beginning of period. . . . . . . . . . . . . . .                           271,032             800,561
                                                                      -------------------  ------------------
Cash, end of period. . . . . . . . . . . . . . . . . .                $           91,062   $         139,351
                                                                      ===================  ==================


</TABLE>

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


                                        6
<PAGE>

<TABLE>
<CAPTION>

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



                                                                                  Nine Months Ended September 30,
                                                                                        2001          2000 - (Restated)
                                                                                -------------------  ------------------
<S>                                                                        <C>                               <C>
Supplemental disclosures of cash flow information:

  Cash paid during the period for:
    Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                 41,113  $           13,051
    Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         -               1,950

Supplemental disclosures of non-cash investing and financing activities:

  200,000 shares of common stock deemed issued for executive compensation                    19,000                   -

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

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

  150,000 shares of common stock issued for franchise settlement. . . . .                         -              15,000

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

  Cumulative $6 Class C preferred stock dividend accrued/paid in-kind . .                    48,539              53,550


</TABLE>


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




                                        7
<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  with  fully  managed services that include Internet
connections,  remote  dial  access  and  Web  hosting services.  ICS offers full
service  system  integration,   specializing  in  high-end  computer  networking
infrastructures,   Internet  solutions,   and  Local  and  Wide   Area   Network
installations  for  commercial,   industrial  and  military  applications.   All
intercompany  balances  and  transactions  are eliminated in consolidation.  The
Company considers itself to operate in one business segment.

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 results of operations for
the  three  and  nine-month periods ended September 30, 2001 are not necessarily
indicative  of  the  results of operations for the full year ending December 31,
2001.  The  accompanying financial statements should be read in conjunction with
the  Company's  financial  statements  for  the  year  ended  December  31, 2000
appearing in the Company's Annual Report on Form 10-KSB.

(Note  2)          Going  Concern
                   --------------

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  and  related  use  of  cash  for  operating
activities  have  resulted  in  an  extremely  tight  cash  position,  including
occasional  intra-period net bank overdrafts and a deficit in working capital of
$1,758,601  at  September  30,  2001. The Company's operating losses and current
financial  position  raise 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  the multi-year, multi-million dollar sub-contract to implement a
local  and  wide  area network solution for the Royal Saudi Air Force awarded to
the Company and its affiliate, ATTI International Development, Inc.  The Company
anticipates  receipt  of  sufficient  contract-related payments to alleviate its
current  cash  flow  shortfall.  However the Company must also attain profitable
operations  to  insure its long-term viability.  Management is confident it will
be successful in these endeavors, but no assurances can be given in this regard.
(See  Notes  4,  5  and 6 to the condensed consolidated financial statements and
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations).

(Note  3)          Restatements  and  Reclassifications
                   ------------------------------------

The  Company  retrospectively  reduced  the amount of goodwill recognized in its
1999  merger  with  Big City Bagels, Inc. by $461,250.  This restatement and the
related  reduction  in  amortization expense were reported in the Company's Form
10-KSB  for fiscal 2000.  The accompanying statement of operations for the three
and-nine  month  periods  ended September 30, 2000 have been restated to reflect
the reduction in amortization expense of $11,531 and $34,593 applicable thereto.
As  further  reported  on  Form  10-KSB,  the  Company  commenced recognition of
additional  interest  expense  (up  to  a  fair-market rate therefor) on certain
related  company loans in fiscal 2000.  The accompanying statement of operations
for  the  three  and nine-month periods ended September 30, 2000 has accordingly
been  restated  to  reflect  imputed  interest  expense  of $8,098 and  $24,192.







                                        8
<PAGE>

(Note  3)          Restatements  and  Reclassifications  -  (continued)
                   ------------------------------------

The  net  effect  of  these two adjustments for the three and nine-month periods
ended  September  30,  2000  was  to  decrease  net  loss by $3,433 and $10,401,
respectively.

(Note  4)          International  Expansion  of  Networking  Operations
                   ----------------------------------------------------

In  October  2001  the  Company announced that it had received a sub-contract to
implement  a  local and wide area network (LAN/WAN) solution for the Royal Saudi
Air  Force  (RSAF)  from its affiliated company, ATTI International Development,
Inc (AID). The initial contract is for the upgrade of Prince Sultan Air Base for
approximately  $7,000,000.  AID  has advised the Company that the portion of the
contract  to  be  jointly administered between them is approximately $4,000,000.
The  Company  will  provide engineering, network design, equipment installation,
implementation  and  overall  management  services for this joint project, which
will  constitute  a comprehensive upgrade and redevelopment of systems currently
used  by  the  RSAF.  These  services  are  expected  to  comprise approximately
$600,000  of  the joint project.  The parties are presently determining which of
them  will  be  responsible  for  the  contractual  purchase  of  the $3,400,000
equipment  portion  of  the  joint  project.  On October 23, 2001, this contract
received  the  requisite  approval  from  the  U.S.  Air  Force to proceed.  AID
estimates  that all LAN/WAN upgrades for the 14 locations throughout the kingdom
of  Saudi  Arabia  could  exceed  one  hundred million dollars over the next 3-4
years.  The  Company  believes  it  is  in the lead position to sub-contract the
design  and related implementation services for these additional projects.  (See
Notes  5  and  6  to  the   condensed  consolidated   financial  statements  and
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations).

(Note  5)          Bank  Loan
                   ----------

The  bank  has  extended  the  maturity date of the Company's bank borrowings to
November  30, 2001.  The facility presently provides for a $200,000 credit line,
of  which  $192,718  was  outstanding  at  September  30, 2001.  The Company has
requested  a  $100,000  increase  in  the  credit  line to $300,000 and a formal
extension  of  the  due  date  to  April  30,  2002, the anniversary date of the
facility.  The  Company  has advised the bank of the formal approval of the RSAF
contract  and is preparing operating projections reflecting the inclusion of the
project for the bank's review.

At  various  dates  during the months of May, June and July of 2001, balances at
two  of  the  checking  accounts  maintained  by  the  Company at this bank were
overdrawn,  although  such  overdrawn  balances did not exceed positive balances
maintained  by  the  Company  at other accounts at this bank.  During August and
September, overdrawn amounts did exceed positive balances by $6,785 and $58,709,
respectively.  All checking accounts had positive cash balances at September 30,
2001.  (See  Management's  Discussion  and  Analysis  of Financial Condition and
Results of Operations - Liquidity and Capital Resources).

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

The  Company  borrowed $337,144 from its affiliates during the nine months ended
September  30,  2001, of which $10,000, $107,144 and $220,000, respectively, was
advanced  in  the first, second and third quarter.  At September 30, 2001, loans
and advances payable to related parties total $928,878, all of which is current.
Of  the  total,  $220,000  is  due on demand and $708,878 is due August 1, 2002.

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

          (A)  First  Quarter  Conversions

On  January  10th, 22nd, 23rd, February 23rd, March 1st and 6th of 2001, a total
of  385.26  shares  of  Class  C Preferred Stock together with accrued preferred
dividends thereon were converted into 402,383 common shares.  In accordance with
the  terms of the preferred stock issue, such conversions were made at discounts
of 19% and then 21% from the average of the closing bid prices for the Company's
common  stock  during  the  five  trading days prior to the holder's election to
convert.    Effective  May  22,  2001,  the  discount  increased from 21% to its
maximum amount of 25%.




                                        9
<PAGE>

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

(B)  Second  Quarter  Conversions

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

(C)  Third  Quarter  Conversions

On  July 11th and August 1st, 7th and 14th and September 6th of 2001, a total of
369.75  shares  of  Class  C  Preferred  Stock  together  with accrued preferred
dividends thereon were converted into 393,936 common shares at a discount of 25%
from the average of the closing bid prices for the Company's common stock during
the  prior  five  trading  days.  After  these  conversions, 9,365.09 of Class C
shares remain outstanding.

(D)  Subsequent  Conversions

On  October  3rd,  4th,  5th,  12th,  24th  and  29th of 2001, a total of 421.75
additional  shares  of  Class  C Preferred were converted into 280,998 shares of
common stock.

(Note  8)          Common  Stock
                   -------------

On  March  1,  2001,  the  Company modified the terms of an existing conditional
grant of 100,000 common stock purchase options to one of its principal executive
officers.  Pursuant  to the modification, such previously granted options, which
were  contingent  on  the  Company's  stock  price  reaching  $4.00 per share by
December  31,  2001,  were  cancelled  and  100,000  unconditional  common stock
purchase  options  exercisable  at  $.01  per  share  for  a five-year term were
granted.  Due  to  the  options'  nominal exercise price, the Company recognized
compensation expense of $10,000, measured by the excess of the fair value of the
common  stock at the date of grant over the exercise price.  Also, in accordance
with Statement of Financial Accounting Standards No. 128, the 100,000 shares are
treated as outstanding when computing basic earnings per share.

The  officer  to  whom  these  options  were  granted, who also holds options to
purchase  another  100,000  common  shares,  also exercisable at $.01 per share,
resigned  from  the  Company  on  June  29, 2001, to pursue other opportunities,
although he will be available to consult with the Company on an as-needed basis.
Such  resignation  did  not  alter  or  modify  the  terms of the stock purchase
options;  the  200,000  shares  are  still  treated  as outstanding with a stock
subscription receivable for $2,000 reported as a contra account in stockholders'
equity.

An additional unrelated 152,000 common shares underlying an equivalent number of
options also exercisable at $.01 per share are similarly treated, with a related
subscription receivable of $1,520.

In  May  of 2001, the Company determined to satisfy $7,500 of accrued consulting
fees  and  $9,000  of  accrued  officer's  bonus by (i) the outright issuance of
75,000  common  shares  and (ii) the grant of stock purchase options to purchase
100,000  common  shares  at  an  exercise  price  of $.01 per share.  Management
determined  the  then  fair  value  of the Company's common stock to be $.10 per
share and subsequently recommended to the board of directors that both the share
issuance  and  the  option grant come from the Company's 1998 Performance Equity
Plan.  On  September  26,  2001, the Company's board of directors approved, from
the  1998  Performance  Equity  Plan,  both  the outright grant of 75,000 common
shares  and  the  option award to purchase 100,000 common shares, exercisable at
$.01  per  share, in payment of the $16,500 of accrued liabilities.  The average
closing  bid  price of the Company's common stock for the last five trading days
of  September was $.10 per share. These two grants exhausted the availability of
shares and/or options under the 1998 Plan.  Due to the options' nominal exercise
price,  the 100,000 shares underlying the options are also treated as issued and
outstanding  effective  September 26, 2001, with a stock subscription receivable
of $1,000 reported as a contra account in stockholders' equity.



                                       10
<PAGE>


(Note  9)          Common  Stock  Options
                   ----------------------

Pursuant  to  the  Company's 1996 Performance Equity Plan, on March 31st of each
calendar year during the term of the 1996 Plan, assuming there are enough shares
then available for grant under the 1996 Plan, each person who is then a director
of the Company is awarded stock options to purchase 2,000 shares of common stock
at  the  fair  market  value  thereof,  all  of  which  options  are immediately
exercisable  as of the date of grant and have a term of ten years. These are the
only  awards  which  may  be granted to a director of the Company under the 1996
Plan.  On  March  30, 2001, the directors of the Company received this automatic
grant of options to purchase an aggregate of 10,000 shares of common stock at an
exercise  price  of $0.10 per share.  At September 30, 2001, options to purchase
8,232 shares were available for future grant under the 1996 Plan.

The  Company's  1998  Performance Equity Plan provides for the issuance of up to
400,000   shares  of  common  stock  to  employees,   officers,   directors  and
consultants.  The  awards  may  consist of incentive stock options, nonqualified
options,  restricted  stock  awards,  deferred  stock awards, stock appreciation
rights  and  other  awards,  including  outright grants as described in the 1998
Plan.  The  board  of  directors  determines  terms  and  vesting  periods.   At
September  30,  2001,  there were 200,000 options actually outstanding, of which
100,000  are  exercisable at $1.00 per share and 100,000 are exercisable at $.01
per share.  In accordance with Financial Accounting Standard No. 128, the latter
options  are  treated  as  exercised,  due  to their nominal exercise price.  No
additional shares or options are available for grant under the 1998 Plan.

(Note  10)     Limited  Private  Placement  of  Common  Stock
               ----------------------------------------------

The  Company's  is  negotiating a limited private placement of its common stock,
which would be exempt from registration under Section 4(2) of The Securities Act
of  1933.  The  placement  would be for a sizable block of common shares, all of
which  would be subject to the resale restrictions imposed by Rule 144 under the
Act.  The  Company  anticipates  that the price per common share of this private
placement  would represent a significant discount from the average trading price
of  the  Company's common stock at the time negotiations began.   If consummated
the transaction is expected  to result in net capital proceeds to the Company of
not less than $50,000.

(Note  11)     Recent  Accounting  Pronouncements
               ----------------------------------

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





                                       11
<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. These risks and uncertainties now also
include those usually associated with international operations particularly when
they  represent  a new endeavor as well as potentially severe disruptions to the
Company's  new  RSAF networking project should the long-standing conflict in the
Middle  East  worsen as a result of the United States led war on terrorism.  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

     See  Note  11  to  the  condensed  consolidated  financial  statements.

Results  of  Operations

     Three  Months  Ended  September  30,  2001 Compared With Three Months Ended
     September  30,  2000

     Total  revenues  decreased  by $202,652, or 16.9%, to $996,065 in 2001 from
$1,198,717  one  year  ago. Continued growth in subscription service revenue was
outweighed  by  decreases  in   hardware   sales,   maintenance/consulting   and
installation services.  The Company's subscription services rose by $267,691, or
82.2%  to  $593,300  for  the  three months ended September 30, 2001 compared to
$325,609  for  the same period a year ago.  Subscription revenue comprised 59.6%
of total revenue during the quarter.  The increase was primarily attributable to
an  increase in the number of subscribers, dedicated users and partnerships with
several  community-based Internet services.  Hardware sales fell by $319,945, or
53.6%,  to  $277,406 from $597,351; combined revenues for maintenance/consulting
and  installation  services  decreased  by  $120,238, or 52.4%, to $109,065 from
$229,303.  There  were  no  private  label  cd  roms  sales  in the 2001 quarter
compared  to $46,377 for the three months ended September 30, 2000.  The Company
is  feeling  the effect of the slowdown in capital expenditures of its customers
and  the  economy  as a whole.  This general slowdown was greatly exacerbated by
the   tragic  events  of  September  11,  2001  as  orders  for  the   Company's
non-subscription  services  came  to  a virtual standstill. The Company has seen
recent indications of a slow recovery in its domestic networking business, which
is principally with local school districts.

The  Company  expects  to  commence work on and receive initial contract-related
payments  on  the  RSAF  network  upgrade project during the fourth quarter. The
network   equipment  selection  and  design,  installation,  implementation  and
management  services portion of the contract is expected to take eight to twelve
months.  Related  revenues  are estimated at $600,000, with an anticipated gross
profit of approximately one-third, subject to the uncertainties of new, overseas
operations undertaken in that conflicted area of the world.

In  October  2001  the  Company  announced  it  was  introducing  a  new peering
infrastructure  for  its  Internet  Service Provider customers designed to lower
costs  and  increase speed, security and reliability.  The Company received four
initial  orders  for  the  new product; due to the Company's present scarcity of
capital  resources,  significant  revenue  contribution  from the production and
marketing of this new product is not anticipated until fiscal  2002.





                                       12
<PAGE>


Results  of  Operations  -  (continued)

Cost  of  sales  was $825,218, representing 82.8% of total revenue for the three
months  ended  September 30, 2001, compared to $1,012,892, constituting 84.5% of
total  revenues for the three months ended September 30, 2000.  Cost of sales of
ICS  was  $243,385,  or  60.4%  of  hardware  sales,  installation  services and
maintenance/consulting  for  the three months ended September 30, 2001, compared
to  $633,456,  or  76.6%,  one  year  ago.  The  increase  in  gross margin as a
percentage  of  sales for ICS is a function of the significantly greater mark-up
earned  by  the  Company  on  labor-intensive  services  such  as   maintenance,
installation  and  consulting compared to hardware sales and the relative mix of
ICS's  revenues.  The  percentage of hardware sales to total revenue for ICS was
unusually  low  during  the  2001  quarter.   Management  anticipates  continued
fluctuation  in  the  mix  of  ICS's revenues and related cost of sales. Cost of
sales  of  VillageWorld was $581,833, or 98.1% of related revenues for the three
months  ended  September  30, 2001, compared to $379,436, or 102%, one year ago.
The  higher  percentage  for  the  2000  quarter  includes  private label cd rom
revenues  and  related costs of sales, none of which have been produced in 2001.

Selling,  general and administrative expenses (SG&A) were $385,963 for the three
months ended September 30, 2001, a decrease of $218,529, or 36.2%, from $604,492
for  the  three  months ended September 30, 2000.  Payroll and related benefits,
which comprise the largest single item in this expense classification, decreased
by  $71,675,  or 21.0%, to $270,447 in 2001 from $342,122 in 2000.  The decrease
was  due to a reorganization of the sales department and the closing in December
2000  of the California office. Of the total SG&A expenses in 2001, $311,609 was
for  ICS and $74,354 was for VillageWorld, as compared to $367,062 and $237,430,
respectively,  one  year  ago.  Marketing and newspaper advertising decreased by
99.9%  to  $220  for the three months ending September 30, 2001 from $58,202 for
the  three  months  ended  September  30,  2000.  This  decrease  represents the
cancelled  advertising  of  the  Company's  Internet franchising program.   As a
percentage  of  sales,  SG&A  expenses  were  38.7%  in  2001 and 50.4% in 2000.

     Amortization  of  goodwill,  after  the restatement applicable to 2000, was
$59,348  for  2001  and  $59,349  for  2000.   (See  Note  3  to  the  condensed
consolidated financial statements).

Interest  expense increased by $6,975, or 50.0%, to $20,929 for the three months
ended  September  30, 2001 from $13,954, as restated, for the three months ended
September  30,  2000.  (See  Note  3  to  the  condensed  consolidated financial
statements).  The  increase  was  due  to the higher average amount owing on the
Company's  bank  loan  and  indebtedness  to affiliates, as well as certain late
payment  finance  charges incurred on the Company's trade payables.  The Company
is  endeavoring  to  work  closely  with  its  trade creditors, some of whom are
pressing  the  Company  for  payment  while  the  Company's  tight cash position
continues.   (See  Note 2 to the condensed consolidated financial statements and
Liquidity and Capital Resources).

     Net  loss  for  the  three  months  ended  September  30, 2001 was $295,393
compared  to  a  net  loss  of $491,970 for the three months ended September 30,
2000, a decrease of $196,577, or 40.0%.  The decrease in the current period loss
is  due principally to the significant decrease in SG&A expenses as a percentage
of  gross  margin,  which  fell  by 99.4% to 225.9% in 2001 from 325.3% in 2000.

Nine  Months  Ended September 30, 2001 Compared With Nine Months Ended September
30,  2000

     The  Company's total revenues increased by $141,500, or 4.9%, to $3,032,993
for  the  nine  months  ended  September  30, 2001, from $2,891,493 for the nine
months  ended  September 30, 2000.  This growth in total revenues represents the
excess  of  the  growth in subscription revenues, which comprised 51.8% of total
revenue  for the current nine months, over the decline in all other revenues for
the  Company.  Subscription  service  revenue  rose  by  $976,375, or 163.9%, to
$1,572,059  for  the nine months ended September 30, 2001 from $595,684 one year
ago.  This  increase  in subscription service revenue was primarily attributable
to  an  increase  in the number of subscribers, dedicated users and partnerships
with  several  community-based  Internet  services.  Hardware sales decreased by
$250,860,  or 19.4%, to $1,043,493 for the nine months ended September 30, 2001.
Maintenance  and consulting revenues decreased by $34,503, or 13.2%, to $226,153
and  installation services declined by $101,429, or 43.4%, to $132,274.  Private
label  cd  roms  decreased  by  100.0%  from $439,877 for the prior nine months.






                                       13
<PAGE>

Results  of  Operations  -  (continued)

      Cost  of sales was $2,317,676, representing 76.4% of total revenue for the
nine months ended September 30, 2001, compared to $2,319,010, representing 80.2%
of  total  revenues for the nine months ended September 30, 2000.  Cost of sales
of  ICS  was  $905,163,  or  64.6%  of hardware sales, installation services and
maintenance/consulting  for the nine months ended September 30, 2001 compared to
$1,268,130,  or  70.9%,  one  year  ago.  Cost  of  sales  of  VillageWorld  was
$1,412,513, or 89.9% of related revenues for the nine months ended September 30,
2001,  compared  to  $1,050,880,  or 95.3%, one year ago, which included private
label cd rom sales and related costs.

Selling, general and administrative expenses (SG&A) were $1,436,173 for the nine
months  ended  September  30,  2001,  a  decrease  of  $436,411,  or 23.3%, from
$1,872,584  for  the  nine  months  ended September 30, 2000.  This decrease was
primarily  attributable  to  the  decrease  in  payroll  and related benefits by
$215,195,  or  18.7% to $933,113 in 2001 from $1,148,308 in 2000.  Marketing and
newspaper  advertising  decreased by $151,404, or 82.7%, to $31,758 in 2001 from
$183,162  in  2000.  This  decrease  represents the cancelled advertising of the
Company's  Internet franchising program.  Of the total SG&A expenses, $1,074,304
is attributable to ICS and $361,869 is attributable to VillageWorld for the nine
months  ended  September 30, 2001, compared to $1,026,318 and $846,266, one year
ago.  As  a percentage of sales, SG&A expenses were 47.4% and 64.8% for the nine
months ended September 2001 and September 2000, respectively.

     Amortization  of  goodwill,  after  the restatement applicable to 2000, was
$178,044  in  2001  and  $178,045  in  2000.   (See  Note  3  to  the  condensed
consolidated financial statements).

     Interest  expense was $75,809 for the nine months ended September 30, 2001,
an  increase of  $38,566 or 103.6% from $37,243, as restated for the nine months
ended  September  30, 2000.  (See Note 3 to the condensed consolidated financial
statements).  This  increase  was  primarily  attributable to the higher average
amount  outstanding  on the Company's bank debt and loans payable to affiliates,
as  well as certain late payment finance charges incurred on the Company's trade
payables.

     Net loss for the nine months ended September 30, 2001 was $974,709 compared
to  a  net  loss  of  $1,515,389 for the nine months ended September 30, 2000, a
decrease  of $540,680, or 35.7%.  The decrease in the current period loss is due
primarily  to two related factors: (i) the significant decrease in SG&A expenses
as  a  percentage  of  gross margin, which fell by 126.3% to 200.8% from 327.1%;
(ii)  the gross margin percentage increased by 3.8% to 23.6% for the nine months
ended  September  30, 2001 compared to 19.8% for the nine months ended September
30,  2000.

Liquidity  and  Capital  Resources

     Cash  at  September  30, 2001, all of which is maintained at the same bank,
was  $91,062  compared to $271,032 at December 31, 2000, a decrease of $179,970.
This decrease in cash was primarily attributable to the funding of the Company's
net loss. Cash required for operating activities was $585,054, of which $119,029
was  used  in  the  first  quarter,  $198,896 was used in the second quarter and
$267,129  was  used in the third quarter.  At various dates during the months of
May,  June and July, the Company began to incur intra-month overdrafts at two of
its  checking  accounts maintained at its bank, although such overdrafts did not
exceed  amounts  of positive balances maintained at other accounts with the same
bank.  However  in  August  and  September  of  2001,  net  combined intra-month
overdrafts  were  incurred  amounting  to $6,785 and $58,709, respectively.  All
checking  accounts had positive cash balances at September 30, 2001.  In October
the  high intra-month net overdraft was $64,106 and at November 12, 2001 the net
overdraft was $44,188.  The Company's bank has not formally approved its request
for  a  $100,000  increase  in its line of credit. The Company views the allowed
overdrafts,  none  of which have existed at any month-end during this period, as
an  indication  of  the  bank's  willingness  to  work  with it pending a formal
response  to  the  requested  increase  in the line, given the Company's and its
other  affiliates'  long  and  positive relationship with this bank.  However no
assurances  can  be  given  as  to the continued availability or amount of these
allowed  overdrafts.

     Accounts receivable increased by $357,823 to $765,855 at September 30, 2001
from  $408,032  at  December 31, 2000.  The increase was due principally to: (i)
invoicing  of various school district monitoring services amounting to $144,000;
and  (ii)  invoicing  of approximately $220,000 for various projects, most which
were billed in the September quarter.






                                       14
<PAGE>

Liquidity  and  Capital  Resources  -  (continued)
--------------------------------------------------

     Inventory  decreased  by  $24,806  to  $25,066  at  September 30, 2001 from
$49,872  at December 31, 2000.  The decrease in inventory is directly related to
a decrease in hardware inventory purchases due to the slowdown in hardware sales
since  March  2001.  Prepaid  expenses  and  other  current  assets increased by
$45,637  to  $113,888  at  September 30, 2001 from $68,251 at December 31, 2000,
primarily due to an increase in prepaid insurance.

     Accounts  payable  and accrued expenses increased by $294,587 to $1,075,306
at  September  30, 2001 from $780,719 at December 31, 2000, primarily due to the
prioritizing  of  payment of operating expenses and salaries over trade accounts
payable as well as a minor overall increase in the volume of transactions during
the  period.

     Notes  payable increased to $192,718 at September 30, 2001 from $125,000 at
December  31, 2000, reflecting additional net borrowings of $67,718.  Borrowings
under the line may not exceed $200,000.  The Company has applied to the bank for
a  one-year  renewal  of  this credit facility to April 30, 2002 and an $100,000
increase  in  the  line to $300,000 and is in the process of preparing operating
projections  reflecting the inclusion of the Company's RSAF networking contract.
The  bank  has renewed the existing line until November 30, 2001 and has allowed
the  Company  to  incur  certain cash overdrafts as discussed above.  Management
expects the increase and the renewal to be granted.

     Loans  payable  to  related  parties increased to $928,878 at September 30,
2001  from  $580,258 at December 31, 2000, an overall increase of $348,620.  The
increase is attributable to actual additional borrowings of $10,000 in the first
quarter,  $107,144  in  the  second quarter and $220,000 in the third quarter as
well  as  $11,476  of interest accrued during the nine months.  A portion of the
third  quarter  loans  amounting to $40,000 was advanced from AID, the affiliate
with  whom  the  Company  is  jointly undertaking the RSAF contract.  All of the
$220,000 borrowed during the third quarter is repayable on demand.  Repayment of
the  balance  of  the  outstanding  related  party  loans  and advances totaling
$708,878  is  due August 1, 2002.  Accordingly, all such related party loans are
now  a  current  liability.  Until  such  time  as  the RSAF networking contract
related  payments  are  received,  the  Company  will be dependent on additional
advances  from  its  affiliates, of which neither the continued availability nor
the  amounts  thereof  are  assured.  No  additional  loans  have  been advanced
subsequent  to  September 30, 2001.  On October 5, 2001 a payment of $70,000 was
made against the $180,000 related company loan.

     At  September  30,  2001,  the  Company  had  a  working capital deficit of
$1,758,601  and  an  extremely  tight cash position. Subsequent to September 30,
2001,  the  Company's  liquidity  situation  worsened; its net cash overdraft at
November  12,  2001  was  $44,188.  While  the  Company has successfully reduced
various  costs,  it  is  presently  dependent on related party loans and/or bank
borrowings.  The  Company  believes  that once the payments on the RSAF contract
are  received, presently expected to commence in December 2001, its current cash
flow  deficiency  will begin to be alleviated; the Company further believes that
the  attendant  international  expansion of its business will be a major step in
the  Company's  attaining  profitable  operations, which step is critical to the
long-term  viability  of  the  Company.  Although management believes it will be
successful  in  these  and  related  endeavors,  including  the  production  and
marketing  of  its  new secure peering product, continuation of the Company as a
going concern is presently in question.

     Operating  activities  used  cash  of  $585,054  for  the nine months ended
September  30,  2001 compared to $971,435 used for the same period one year ago.
This  decrease  reflects  the substantial payment of liabilities associated with
the  discontinued bagel operations one year ago.  The current period use of cash
was principally to fund the net loss.

     For the nine months ended September 30, 2001, investing activities provided
$222 compared to cash used of $61,650 one year ago.  Virtually all of the change
was due to decreased capital expenditures in 2001. Financing activities provided
cash  of  $404,862  in 2001, compared to $371,875 in 2000.  The Company borrowed
$67,718  under  the  bank  line  in 2001 while related company advances provided
$337,144.

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




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Liquidity  and  Capital  Resources  -  (continued)

     The  Company's  board  of  directors  has unanimously approved the grant of
75,000  common  shares  outright  as  well  as  the grant of options to purchase
100,000  common  shares  under  the  Company's  1998  Performance Equity Plan in
satisfaction  of  certain  accrued  liabilities  totaling  $16,500  for services
previously  provided.  As all the shares issuable under such plan are covered by
an existing Form S-8 Registration Statement, both the shares issued outright and
those  underlying  the  options,  when exercised, will be free trading under The
Securities  Act  of  1933.  No further shares or options are available under the
1998  Plan.

     In  an  effort  to partially address its scarcity of capital resources, the
Company  has  entered  into  negotiations for a limited private placement of its
common  stock.  If  consummated, the placement would be for one sizable block of
new  unregistered  common shares at a per share price representing a substantial
discount from the quoted trading value of the Company's common stock at the time
negotiations  began.  The  Company's board of directors believes such a discount
would  be appropriate given the restrictions on resale imposed by Rule 144 under
The  Securities  Act  as  well as the Company's present deficiency in liquidity.
Net  capital proceeds to the Company from this transaction would be in an amount
not  less  than  $50,000.  It is possible that the Company might seek additional
private placements of a similar nature and amount, although the aggregate of all
such  transactions  would  not  exceed $300,000.  There is no assurance that any
private placement will be consummated.

Part  II.      Other  Information

Item  2.       Changes  in  Securities

               See Note 7(C) to  the condensed consolidated financial statements
               included in Part I hereof.

               The Company received no cash in any of the transactions described
               in Note 7(C).  The Company's issuances of common shares described
               therein   were all  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.

Item  6.       Exhibits  and  Reports  on  Form  8-K

(a)            Exhibits

               None

(b)            Reports  on  Form  8-K

               None





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                                   Signatures


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



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



Dated:  November  14,  2001                       By:     /s/  Peter  J.  Keenan
                                                          ----------------------
                                   Peter  J.  Keenan,  Chairman  of  the  Board,
                                   President  and  Principal  Executive  Officer



                                               By:  /s/  Edilberto  R.  Enriquez
                                                  ------------------------------
                                       Edilberto  R.  Enriquez,
                                       Treasurer  and  Chief  Financial  Officer




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