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

                               -------------------

                               FORM 10-QSB/A NO. 3

                Quarterly Report Under Section 13 or 15(d) of the
                        Securities Exchange Act of 1934.

                 For the quarterly period ended: March 31, 2005
                          Commission File No. 001-15819

                               -------------------

                               ACTIVEWORLDS CORP.
        (Exact name of small business issuer as specified in its charter)

                               ------------------
            DELAWARE                                          513-3883101
            --------                                          -----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

                 40 Wall Street, 58th Floor, New York, NY 10005
                 ----------------------------------------------
                                 (212) 509-1700
                          (Address and telephone number
                         of principal executive offices)

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. [x] Yes [ ] No

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

We had 5,317,116 shares of our common stock outstanding as of August 12, 2005.

Transitional Small Business Disclosure Format (check one): [ ] Yes [x] No

<PAGE>

                                Explanatory Note
                                ----------------

This Report has been amended to revise Note 6 to our financial statements which
explains the error that we corrected in our revised Form 10-KSB for the year
ended December 31, 2004.

<PAGE>

                                      INDEX
                                                                            Page
                         PART I - FINANCIAL INFORMATION                     ----

ITEM 1.    Financial Statements

           Condensed Consolidated Balance Sheets
                as of March 31, 2005 (restated) (unaudited)
                and December 31, 2004 (restated)                               1

           Condensed Consolidated Statements of Operations
                for the three ended March 31, 2005 (restated)
                and 2004 (unaudited)                                           2

           Condensed Consolidated Statements of Cash Flows
                for the three months ended March 31, 2005 (restated)
                and 2004 (unaudited)                                           3

           Notes to unaudited condensed consolidated
                interim financial statements                               4 - 6

ITEM 2.    Management's Discussion and Analysis of Interim Financial
                Condition and Results of Operations                        7 - 8

                           PART II - OTHER INFORMATION

ITEM 6.    Exhibits                                                            8

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               ACTIVEWORLDS CORP.

                        Consolidated Financial Statements
                             for three months ended
                      March 31, 2005 (Restated) (Unaudited)

                               ACTIVEWORLDS CORP.

                           Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                            March 31,     December 31,
                                                               2005           2004 *
                                                           -----------    -----------
                                                           (Unaudited)     (Restated)
                                                           (Restated)
<S>                                                        <C>            <C>
                         Assets
Current assets
    Cash                                                   $   339,837    $   346,823
    Investments                                                 91,875         91,875
                                                           -----------    -----------
              Total current assets                             431,712        438,698
                                                           -----------    -----------

              Total assets                                 $   431,712    $   438,698
                                                           -----------    -----------

            Liabilities and Stockholders' Equity

Current liabilities
    Accounts payable                                       $     2,000    $     2,602
    Accrued liabilities                                         10,500          8,500
                                                           -----------    -----------
              Total current liabilities                         12,500         11,102
                                                           -----------    -----------

Commitments and contingencies

Stockholders' equity
    Preferred stock, $.001 par value,
      500,000 shares authorized,
      no shares issued or outstanding                               --             --
    Common stock, $.001 par value,
      100,000,000 shares authorized,
      5,317,116 shares issued                                    5,317          5,317
    Additional paid-in capital                               5,732,635      5,664,710
    Accumulated deficit                                     (5,279,838)    (5,203,529)
    Accumulated other comprehensive income (loss)              (38,902)       (38,902)
                                                           -----------    -----------
              Total stockholders' equity                       419,212        427,596
                                                           -----------    -----------

              Total liabilities and stockholders' equity   $   431,712    $   438,698
                                                           -----------    -----------
</TABLE>

------
* Derived from audited financial statements

                 See notes to consolidated financial statements

                                       1
<PAGE>

                               ACTIVEWORLDS CORP.

                      Consolidated Statement of Operations

                                                         Three Months Ended
                                                              March 31
                                                        --------------------
                                                          2005         2004
                                                        --------    --------
                                                       (Restated)
                                                            (Unaudited)

Revenues                                                $     --    $     --
                                                        --------    --------

Operating expenses
    Selling, general and administrative expenses          81,509      17,340
                                                        --------    --------
              Total operating expenses                    81,509      17,340
                                                        --------    --------

    Loss from operations                                 (81,509)    (17,340)
                                                        --------    --------

Loss before (provision for) benefit from income taxes    (81,509)    (17,340)
                                                        --------    --------
(Provision for) benefit from income taxes                     --          --
                                                        --------    --------

    Net loss                                            $(81,509)   $(17,340)
                                                        --------    --------

Net (loss) per share of common stock
    Basic                                               $  (.015)   $  (.003)
                                                        --------    --------

                 See notes to consolidated financial statements

                                       2
<PAGE>

                               ACTIVEWORLDS CORP.

                      Consolidated Statement of Cash Flows

                                                           Three Months Ended
                                                                March 31
                                                         ----------------------
                                                            2005         2004
                                                         ---------    ---------
                                                        (Restated)
                                                              (Unaudited)

Operating activities
    Net loss                                             $ (81,509)   $ (17,340)
    Adjustment to reconcile net (loss)
       to net cash used in operating activities
       Stock warrants issued for services                   73,125           --
    Changes in operating assets and liabilities
       which provided (used) cash
         Accounts payable                                     (602)          --
         Accrued liabilities                                 2,000        1,963
                                                         ---------    ---------
              Net cash used in operating activities         (6,986)     (15,377)
                                                         ---------    ---------

Net decrease in cash                                        (6,986)     (15,377)
Cash at beginning of period                                346,823      407,318
                                                         ---------    ---------

              Cash at end of period                      $ 339,837    $ 391,941
                                                         ---------    ---------

Supplemental disclosure information
    Cash paid for interest during the period             $      --    $      --
                                                         ---------    ---------
    Non-cash transaction cancellation of Treasury stock  $      --    $ 118,403
                                                         ---------    ---------

                 See notes to consolidated financial statements

                                       3
<PAGE>

                               ACTIVEWORLDS CORP.

                   Notes to Consolidated Financial Statements
                                 March 31, 2005

Note 1 - Basis of presentation

         The accompanying 2005 and 2004 unaudited interim consolidated financial
         statements included herein have been prepared by the Company, without
         audit, pursuant to the rules and regulations of the Securities and
         Exchange Commission (the "SEC"). Certain information and footnote
         disclosures normally included in financial statements prepared in
         accordance with accounting principles generally accepted in the United
         States of America have been condensed or omitted pursuant to such rules
         and regulations. However, the Company believes that the disclosures are
         adequate to prevent the information presented from being misleading.
         These financial statements should be read in conjunction with the
         financial statements and the notes thereto included in the Company's
         Form 10-KSB, which contains financial information for the years ended
         December 31, 2004 and 2003.

         The information provided in these financial statements reflects all
         adjustments (consisting solely of normal recurring accruals) that are,
         in the opinion of management, necessary to present fairly the results
         of operations for this period. The results for this period are not
         necessarily indicative of the results to be expected for the full year.

         Activeworlds Corp. (the "Company") became inactive in July 2002 when
         the Company entered into an agreement to sell all of the issued and
         outstanding stock of its operating subsidiary, Activeworlds, Inc. The
         agreement closed in September 2002 and the Company's former management
         purchased Activeworlds, Inc. in exchange for their selling 2,595,445
         shares or approximately 30% of the Company's common stock to the
         Company. The Company has been actively seeking to merge, invest in or
         acquire other companies.

         On September 9, 2004, the Company entered into a letter of intent to
         acquire Hi-G-Tek, Ltd., an Israeli company, ("Hi-G") in a transaction
         expected to be treated as a reverse acquisition (the "Reverse
         Acquisition"). In connection with the Reverse Acquisition, the Company
         formed a wholly-owned subsidiary, AWLD, Inc., a Delaware corporation.
         AWLD, Inc. then formed a wholly-owned subsidiary AWLD, Ltd., an Israeli
         company.

         On December 13, 2004 the Company signed an Agreement and Plan of Merger
         (the "Plan") by and among the Company, AWLD, Inc., AWLD Ltd., Baytree
         LLC (a related company, substantially owned by a significant
         stockholder of the Company) and Hi-G. The Plan called for the merger of
         Hi-G and the Company's wholly-owned subsidiary AWLD, Ltd. in exchange
         for 24,683,303 shares of the Company's outstanding common stock. The
         terms of the Plan expired on February 28, 2005, although the parties
         continued discussions through March 31, 2005, at which time the parties
         ended discussions.

         All intercompany accounts and transactions have been eliminated in
         consolidation. The consolidated financial statements are presented as
         those of Activeworlds Corp.

                                       4
<PAGE>

                               ACTIVEWORLDS CORP.

                   Notes to Consolidated Financial Statements
                                 March 31, 2005

         The Company is actively seeking to merge, invest in or acquire other
         companies to generate revenues and profits.

Note 2 - Investments

         In 2001 the Company agreed to accept 9,800,000 shares of common stock
         of its largest contract customer, 3D Global Limited, in full and final
         payment on the work completed to date on the contract. The fair market
         value at the date the common stock was transferred was $130,777. The
         fair market value of the investment had decreased by $38,902 at
         December 31, 2004. Accordingly, the value of the investment was
         adjusted to $91,875 at December 31, 2004. The trading of the common
         stock of Green X Global Limited (Green X), formerly known as 3D Global
         Limited, has been suspended pending the acquisition of Red X Property
         Pty. Ltd. The proposed acquisition has been extended to June 20, 2005.
         It is difficult to predict the outcome of the proposed acquisition at
         this time or the effect that it may have on the value of Green X's
         stock value. In light of this uncertainty the Company will continue to
         carry the value of the investment at $91,875, the value at December 31,
         2004.

Note 3 - Income taxes

         At March 31, 2005, the Company has a net operating loss carryforward of
         approximately $1,633,000 that may be used to offset future taxable
         income.

         An allowance has been established for the full amount of gross deferred
         tax asset of approximately $654,000 due to the uncertainty of utilizing
         the deferred taxes in the future.

Note 4 - Net (loss) per share of common stock

         The number of shares on which the basic net (loss) per share of common
         stock has been calculated is as follows:

                                                              Weighted Average
                    Three Months Ended March 31,              Number of Shares
                    ----------------------------              ----------------
                            (Unaudited)

                                2005                              5,317,116

                                2004                              5,317,116

         Diluted net (loss) per share of common stock has not been presented for
         the three months ended March 31, 2005 and 2004 since the effect of
         including the stock options and warrants outstanding would be
         antidilutive.

                                       5
<PAGE>

                               ACTIVEWORLDS CORP.

                   Notes to Consolidated Financial Statements
                                 March 31, 2005

Note 5 - Related party transactions - warrants

         In December 2004 the Company issued 750,000 common stock warrants to a
         company controlled by its principal stockholder. The consulting
         contract is for two years from the date of the contract (measurement
         date). The warrants are fully-vested, can be exercised at $2.00 per
         share and expire three years from the date of the contract. The fair
         value of the warrants of $585,000 issued for the consulting services
         will be expensed over the life of the consulting contract and is not
         affected by changes in the fair value of the Company's stock subsequent
         to the measurement date. Expenses for consulting services under the
         contract were recognized in the amount of $73,125 for the three months
         ended March 31, 2005. The fair value has been determined using the
         Black Scholes Model with the following assumptions:

                   Risk-free interest rate                        3.09%
                   Volatility                                    100.0%
                   Expected life                                 3 years
                   Expected dividend yield                        0.00%

Note 6 - Correction of an error

         The accompanying financial statements for the three months ended March
         31, 2005 have been restated in connection with a non-cash expense to
         correct an error in the calculation of the fair value of the warrants
         disclosed in note 5. The Company previously valued common stock
         warrants granted for consulting services at $337,500 using the Black
         Scholes Model and assuming certain discounts. The error pertains to the
         use of discounts in the valuation of the warrants. The fair value of
         the warrants has now been determined to be $585,000 using the Black
         Scholes Model. The effect of the restatement was to increase the net
         loss for the three months ended March 31, 2005 by $30,939 and increase
         the net loss per share by $.005.

                                       6
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion of our financial condition and results of
operations should be read together with the financial statements and related
notes included in this Report. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in those forward-looking statements as a
result of certain factors, including, but not limited to, those contained in the
discussion on forward-looking statements that follows this section.

OVERVIEW

         We are a Delaware corporation organized on September 5, 1995. Beginning
in 1999, through our wholly-owned subsidiary Activeworlds, Inc., we operated the
business of providing Internet software products and services that enabled the
delivery of three dimensional content over the Internet. We operated this
business until July 10, 2002 when we entered into an agreement to sell the
subsidiary to our former management. The sale closed on September 11, 2002, at
which time we became inactive. We are now seeking business opportunities. We
have not had revenues from operations since entering into the agreement to sell
our subsidiary on July 10, 2002.

         On December 13, 2004, we signed an Agreement and Plan of Merger with
Hi-G-Tek, Ltd., an Israeli corporation ("Hi-G") under which our newly-formed
wholly-owned subsidiary would have merged with and into a subsidiary of Hi-G, in
exchange for 24,683,303 shares of our restricted Common Stock. The Agreement
expired by its terms on February 28, 2005, although the parties continued
discussions through March 31, 2005 at which time all discussions ceased and the
parties determined that the merger would not close.

         Our primary expenses relate to our reporting obligations under the
Securities Exchange Act of 1934 and expenses related to the acquisition of
another business opportunity. We will incur expenses due to the legal and
accounting services required to prepare periodic reports and the costs of filing
these reports with the Securities and Exchange Commission. In addition, during
2005 and 2006, we will incur a non cash expense of approximately $73,000 per
quarter in connection with amortizing warrants granted to a company controlled
by our principal stockholder pursuant to a consulting agreement entered into in
December 2004. During 2004, we incurred expenses related to evaluating three
acquisition candidates, none of which was consummated.

         Our plan of operations does not call for any product research or
development, nor do we plan to purchase any equipment. We believe we have enough
working capital to meet our operational needs for the next 12 months.

         We currently have no employees. Our management expects to confer with
consultants, attorneys and accountants as necessary. We do not anticipate a need
to engage any employees so long as we are seeking and evaluating business
opportunities. We will determine the need for employees based upon the specific
business opportunity once we consummate an acquisition transaction.

                                       7
<PAGE>

RESULTS OF OPERATIONS

         We had no revenue for the quarters ended March 31, 2005 and 2004. The
loss from operations in the first quarter of 2005 was $81,509 consisting of
approximately $73,000 of non-cash expense related to amortizing the warrants
referred to above, and the remainder consisting primarily of public company
expenses as well as some expenses related to our evaluation of the potential
merger with Hi-G in contrast to our loss from operations during the first
quarter of 2004 of $17,340 which primarily consisted of expenses related to our
evaluation of a potential acquisition and some public company expenses.

LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2005, we had total assets of $431,712, which includes
$339,837 of cash, and total liabilities of $12,500. At December 31, 2004, we had
total assets of $438,698, which included $346,823 of cash, and total liabilities
of $11,102.

         For further information, see our report on Form 10-KSB filed on April
8, 2005 and the report on Form 10-KSB/A filed on February 1, 2006.

FORWARD-LOOKING STATEMENTS
--------------------------

         The statement made above relating to the adequacy of our working
capital is a forward-looking statement within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements that express the
"belief", "anticipation", "plans", "expectations", "will" and similar
expressions are intended to identify forward-looking statements.

         The results anticipated by any or all of these forward-looking
statements might not occur. Important factors, uncertainties and risks that may
cause actual results to differ materially from these forward-looking statements
include matters relating to the business and financial condition of any company
we acquire. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as the result of new information, future
events or otherwise.

                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)       EXHIBIT INDEX

                   Exhibit
                   Number     Description
                   --------   -----------
                      31        Certification of CEO and CFO
                      32        Section 1350 certification of CEO and CFO

                                       8
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf on February 1, 2006 by
the undersigned, thereunto duly authorized.


                                            ACTIVEWORLDS CORP.


                                            /s/ Sean Deson
                                            --------------
                                            Sean Deson, Chief Executive Officer

                                       9