U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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, 2003

                          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)

                112 Baypoint Drive, San Rafael, California 94901
                ------------------------------------------------

                                 (415) 453-4868
                                 --------------
                          (Address and telephone number
                         of principal executive offices)

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

We had 5,319,790 shares of our common stock outstanding as of November 13, 2003.

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

<PAGE>


                                      INDEX
<TABLE>
<CAPTION>

                                                                                          Page
                         PART I - FINANCIAL INFORMATION
<S>        <C>                                                                              <C>
ITEM 1.    Financial Statements

           Condensed Consolidated Balance Sheets
                as of June 30, 2002 (unaudited) and December 31, 2001                        1

           Condensed Consolidated Statements of Income
                for the three and six months ended June 30, 2002 and 2001 (unaudited)        2

           Condensed Consolidated Statements of Cash Flows
                for the six months ended June 30, 2002 and 2001 (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 - 9

ITEM 3.    Controls and Procedures                                                           9

                           PART II - OTHER INFORMATION

ITEM 1.    Legal Proceedings                                                                 9

ITEM 2.    Change in Securities                                                              9

ITEM 3.    Defaults upon Senior Securities                                                   9

ITEM 4.    Submission of Matters to a Vote of Security Holders                               9

ITEM 5.    Other Information                                                                 9

ITEM 6.    Exhibits and Reports on Form 8-K                                                 10
</TABLE>

                                       ii
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                               ACTIVEWORLDS CORP.
                           Consolidated Balance Sheet
<TABLE>
<CAPTION>


                                                                   September 30,  December 31,
                                                                       2003          2002 *
                                                                   -----------    -----------
                                                                   (Unaudited)
                                     Assets
<S>                                                                <C>            <C>
Current assets
    Cash                                                           $   404,750    $   346,213
    Due from Activeworlds, Inc.                                             --          6,916
    Prepaid expenses                                                    10,519         10,519
    Investments                                                         50,256         50,256
                                                                   -----------    -----------
              Total current assets                                     465,525        413,904
                                                                   -----------    -----------

              Total assets                                         $   465,525    $   413,904
                                                                   -----------    -----------

                      Liabilities and Stockholders' Equity
Current liabilities
    Accounts payable                                               $     3,192    $    19,323
    Accrued liabilities                                                  6,000         10,000
                                                                   -----------    -----------
              Total current liabilities                                  9,192         29,323
                                                                   -----------    -----------
Commitments and contingencies

Stockholders' equity
    Preferred stock, $.001 par value, 500,000 shares authorized,
      no shares issued or outstanding                                       --             --
    Common stock, $.001 par value, 50,000,000 shares authorized,
      5,319,790 shares issued and outstanding                            5,320          5,320
    Additional paid-in capital                                       5,725,910      5,725,910
    Treasury stock                                                    (118,403)      (118,403)
    Accumulated deficit                                             (5,075,973)    (5,147,725)
    Accumulated other comprehensive income (loss)                      (80,521)       (80,521)
                                                                   -----------    -----------
              Total stockholders' equity                               456,333        384,581
                                                                   -----------    -----------
              Total liabilities and stockholders' equity           $   465,525    $   413,904
                                                                   -----------    -----------
</TABLE>


*Derived from audited financial statements

See notes to consolidated financial statements

                                       1
<PAGE>

                               ACTIVEWORLDS CORP.
                      Consolidated Statement of Operations
<TABLE>
<CAPTION>

                                                        Three Months Ended          Nine Months Ended
                                                           September 30                September 30
                                                   --------------------------    --------------------------
                                                       2003          2002           2003           2002
                                                   -----------    -----------    -----------    -----------
                                                          (Unaudited)                   (Unaudited)
<S>                                                <C>            <C>            <C>            <C>
Revenues                                           $        --    $    11,452    $        --    $   268,956
                                                   -----------    -----------    -----------    -----------
Operating expenses
    Selling, general and administrative
      expenses                                           1,890        204,119         33,248        939,806
    Research and development expenses                       --         10,039             --        218,397
                                                   -----------    -----------    -----------    -----------
              Total operating expenses                   1,890        214,158         33,248      1,158,203
                                                   -----------    -----------    -----------    -----------
    Loss from operations                                (1,890)      (202,706)       (33,248)      (889,247)

Interest income                                             --          2,171             --         14,821
                                                   -----------    -----------    -----------    -----------
    Income (loss) before  litigation  settlement
      and  (provision  for)  benefit from income
      taxes                                             (1,890)      (200,535)       (33,248)      (874,426)

Litigation settlement (note 5)                         105,000             --        105,000             --
                                                   -----------    -----------    -----------    -----------
                                                       103,110             --         71,752             --

(Provision for) benefit from income taxes                   --             --             --             --
                                                   -----------    -----------    -----------    -----------
    Net income (loss)                                  103,110       (200,535)        71,752       (874,426)

Other comprehensive income (loss) -
    unrealized (losses) on securities                       --             --             --             --
                                                   -----------    -----------    -----------    -----------
    Comprehensive income (loss)                    $   103,110    $  (200,535)   $    71,752    $  (874,426)
                                                   -----------    -----------    -----------    -----------

Earnings (loss) per share of common stock
    Basic                                          $      .019    $     (.036)   $      .014    $     (.116)
                                                   -----------    -----------    -----------    -----------
Earnings (loss) per share of common stock
    Dilutive                                       $      .011             --    $      .007             --
                                                   -----------    -----------    -----------    -----------
</TABLE>

See notes to consolidated financial statements

                                       2
<PAGE>
                               ACTIVEWORLDS CORP.
                      Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                                       September 30
                                                                                --------------------------
                                                                                    2003          2002
                                                                                -----------    -----------
                                                                                        (Unaudited)
<S>                                                                             <C>            <C>
Operating activities
    Net income (loss)                                                           $    71,752    $  (874,426)
    Adjustment to reconcile net income (loss) to net cash provided
      by (used in) operating activities
       Depreciation and amortization                                                     --         18,405
       Changes in operating assets and liabilities which provided (used) cash
          Accounts receivable                                                            --            774
          Due from Activeworlds, Inc.                                                 6,916         (6,916)
          Prepaid expenses                                                               --         20,794
          Accounts payable                                                          (16,131)        35,324
          Accrued liabilities                                                        (4,000)       (52,857)
                                                                                -----------    -----------
              Net cash provided by (used in) operating activities                    58,537       (858,902)
                                                                                -----------    -----------
Investing activities
    Purchases of equipment and leasehold improvements                                    --         (1,434)
                                                                                -----------    -----------
              Net cash used in investing activities                                      --         (1,434)
                                                                                -----------    -----------
Financing activities
    Payments on capital lease obligation                                                 --           (878)
    Purchase of Treasury stock                                                           --       (576,681)
                                                                                -----------    -----------
              Net cash used in financing activities                                      --       (577,559)
                                                                                -----------    -----------

Net increase (decrease) in cash                                                      58,537     (1,437,895)
Cash at beginning of period                                                         346,213      1,840,430
                                                                                -----------    -----------
              Cash at end of period                                             $   404,750    $   402,535
                                                                                -----------    -----------
Supplemental disclosure information
    Cash paid for interest during the period                                    $        --    $        --
                                                                                -----------    -----------
    Cash paid for income taxes during the period                                $        --    $        --
                                                                                -----------    -----------
Supplemental schedule of non cash investing and financing activities
       Non-cash items in connection with the sale of subsidiary                 $        --    $  (175,775)
                                                                                -----------    -----------
</TABLE>

See notes to consolidated financial statements


                                       3
<PAGE>
                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 -      Basis of presentation

              The accompanying 2003 and 2002 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, 2002.

              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.

              During January 2002, the Company was notified by NASDAQ that the
              Company had not met the minimum requirements of the NASDAQ and
              would be delisted from the NASDAQ in 2002 unless the minimum
              requirements were satisfied. The Company was subsequently delisted
              from the NASDAQ.

              From January 1, 2002 through July 9, 2002, the Company suffered a
              substantial consolidated net loss and has net capital in an amount
              less than its net loss for 2002. The board of directors began
              negotiations with management of the subsidiary, Activeworlds,
              Inc., to sell the subsidiary to the management of Activeworlds,
              Inc. On July 10, 2002 Activeworlds Corp. entered into an Agreement
              and Plan of Exchange (the "Agreement"). Under the Agreement, the
              Company agreed to sell all of the issued and outstanding shares of
              common stock of its subsidiary, Activeworlds, Inc. to the
              Company's management as of the date of the Agreement (the "Former
              Management"). The Former Management agreed to sell the Company
              2,595,445 shares of the Company's common stock representing
              approximately 30% of the outstanding shares. Under the Agreement,
              the Former Management resigned, terminated their employment
              agreements and assumed all expenses associated with the business
              of Activeworlds, Inc., and the Company agreed to pay Former
              Management $425,000 and up to $15,000 of their legal fees. At the
              same time, in a separate transaction, Former Management agreed to
              sell 1,000,000 shares of common stock to a 10% stockholder (the
              "Stockholder"), contingent upon closing the transactions under the
              Agreement. The Agreement was subject to the approval of a majority
              of the outstanding shares of common stock of the Company. The
              Former Management issued irrevocable proxies to the Stockholder
              who had the power to vote a majority of outstanding shares and
              voted in favor of sale of Activeworlds, Inc. to the Former
              Management. On September 9, 2002 the sale of Activeworlds, Inc.
              was approved by the consent of the majority of outstanding shares
              of common stock and the transactions under the Agreement closed.
              In accordance with the terms of the agreement, the subsidiary was
              sold to the former management effective as of the date of
              agreement (July 10, 2002).


                                       4
<PAGE>
                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              Non-cash items in connection with the sale of the subsidiary are
              as follows:

                   Property and equipment (net of accumulated
                    depreciation and amortization of $199,746)  $    (224,163)
                   Deferred revenue                                   185,602
                   Note receivable for shares issued                   (6,500)
                                                                -------------
                                                                $     (45,061)
                                                                -------------

              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 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 $130,770.
              The fair market value of the investment had decreased by $80,521
              at September 30, 2003. Accordingly, the value of the investment
              has been adjusted to $50,256 at September 30, 2003 and December
              31, 2002.

Note 3 -      Income taxes

              At September 30, 2003, the Company has a net operating loss
              carryforward of approximately $4,678,000 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 $1,870,000 due to the
              uncertainty of utilizing the deferred taxes in the future.

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

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

                                       5
<PAGE>

                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              Basic
              -----
                                                              Weighted Average
              Three Months Ended September 30,                Number of Shares
                                                              ----------------

                                         2003                     5,319,790
                                         2002                     7,543,726

              Nine Months Ended September 30,

                                         2003                     5,319,790
                                         2002                     7,543,726

              Dilutive
              --------

              Three Months Ended September 30,

                                         2003                     9,767,809

              Nine Months Ended September 30,

                                         2003                     9,767,809

              Diluted earnings (loss) per share of common stock has not been
              presented for the three months ended September 30, 2002 and nine
              months ended September 30, 2002 since the effect of including the
              stock options and warrants outstanding would be antidilutive.

Note 5 -      Revenue Sharing Agreement - litigation

              During 2000 the Company entered into an agreement with an internet
              on-line service provider to promote and market the Activeworlds
              Corp. services to the service provider's members. The term of the
              agreement was one year. Revenue from new members generated under
              the agreement was shared equally. The agreement required
              Activeworlds Corp. to make four quarterly installments in the
              amount of $112,500 each as a guarantee against further revenues
              earned from memberships derived from the on-line provider.
              Previously, the Company made three installments in the total
              amount of $337,500. Approximately $18,000 was received from
              memberships under the contract which expired in 2001. The Company
              entered into litigation regarding adjustments to the contract due
              to the lack of registrations received under the agreement. On July
              9, 2003 a settlement was reached between the parties. Under the
              settlement agreement, the on-line provider paid the Company
              $105,000 to settle all claims associated with the litigation.

                                       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.

         Our primary expenses will relate to our reporting obligations under the
Securities Exchange Act of 1934. 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 SEC. In the event we acquire a business opportunity, we
may incur additional expenses related to proxy or information statements we must
provide to our stockholders which disclose that company's business operations,
management and financial condition.

         Our plan of operations does not call for any product research or
development, nor do we plan to purchase any equipment.

         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.

RESULTS OF OPERATIONS

         Three Months Ended September 30, 2003 Compared to Three Months ended
September 30, 2002.

         Net Revenues. During the quarter ended September 30, 2003, net revenues
declined to $0 from $11,452 from the same period last year.

         Expenses. Selling, general and administrative expenses declined
substantially to $1,890 from $204,119 during the same period last year. Research
and development expenses decreased during the quarter ended September 30, 2003
to $0 from $10,039 during the third quarter in 2002.

                                       7
<PAGE>

         Net Income. The net income for the third quarter of 2003 was $103,110
as opposed to a net loss of $200,535 for the quarter ended September 30, 2002.
The net income for the three months ended September 30, 2003 is due to a
litigation settlement in the amount of $105,000.

         Nine Months Ended September 30, 2003 Compared to Nine Months ended
September 30, 2002.

         Net Revenues. During the nine months ended September 30, 2003, net
revenues declined to $0 from $268,956 from the same period last year.

         Expenses. Selling, general and administrative expenses declined
substantially to $33,248 from $939,806 during the same period last year.
Research and development expenses decreased during the nine months ended
September 30, 2003 to $0 from $218,397 during the same period in 2002.

         Net Income. The net income for the nine months ended September 30, 2003
was $71,752 as opposed to a net loss of $874,426 for the same period in 2002.
The net income for the nine months ended September 30, 2003 is due to a
litigation settlement in the amount of $105,000.

LIQUIDITY AND CAPITAL RESOURCES

         For the nine months ended September 30, 2003, net cash provided by
operating activities was $58,537 in contrast to net cash used by operating
activities of $858,902 for the corresponding period in 2002.

         In the nine months ended September 30, 2003, net cash used by financing
activities was $0, while in the nine months ended September 30, 2002, net cash
of $577,559 was used.

         During the nine months ended September 30, 2003, net cash used in
investing activities was $0 in contrast to $1,434 for the corresponding period
in 2002.

         Working capital increased to $404,750 at September 30, 2003 from
346,213 at December 31, 2002.We believe our cash will be sufficient for more
than the next 12 months because we will have no business operations and only
minimal costs. However, we are actively looking to acquire an existing business
in order to provide an opportunity to create stockholder value. Depending upon
the business and financial condition of any company we acquire, we may need
future financing.

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.

                                       8
<PAGE>


ITEM 3.  CONTROLS AND PROCEDURES

         (a)      Evaluation of Disclosure Controls and Procedures

         As of September 30, 2003, we performed an evaluation, under the
supervision and with the participation of our management, including our chief
executive officer and chief financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
SEC Rule 13a-15(e) or 15d-15(e)). Based upon that evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information relating to Activeworlds required to be included in our reports
filed or submitted under the Securities Exchange Act of 1934, as amended. Due to
the inherent limitations of the effectiveness of any established disclosure
controls and procedures, our management cannot provide absolute assurance that
the objectives of our disclosure controls and procedures will be met.

         (b)      Changes in Internal Controls

         There has been no change in our internal control over financial
reporting that occurred during our most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company previously entered into litigation against an internet
         on-line service provider who had agreed to promote and market the
         Activeworlds Corp. services to the service provider's members. On July
         9, 2003 a settlement was reached between the parties. Under the
         settlement agreement, the on-line provider paid the Company $105,000 to
         settle all claims associated with the litigation.


ITEM 2.  CHANGES IN SECURITIES

         Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5.  OTHER INFORMATION

         Not applicable.

                                       9
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBIT INDEX

         Exhibit
         Number   Description
         -------  ------------------------------------------

         31.1     certification of CEO

         31.2     certification of CFO

         32.1     Section 1350 certification of CEO

         32.2     Section 1350 certification of CFO

         (b)      REPORTS ON FORM 8-K.

                  None


                                       10
<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 November
14, 2003 by the undersigned, thereunto duly authorized.


                                           ACTIVEWORLDS CORP.


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


                                       11