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: March 31, 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 May 14, 2003.

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


<PAGE>


                                      INDEX
<TABLE>
<CAPTION>

                                                                                             Page
                         PART I - FINANCIAL INFORMATION
<S>                                                                                            <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                                          6 - 7

ITEM 3.    Controls and Procedures                                                             8


                           PART II - OTHER INFORMATION

ITEM 1.    Legal Proceedings                                                                   8

ITEM 2.    Change in Securities                                                                8

ITEM 3.    Defaults upon Senior Securities                                                     8

ITEM 4.    Submission of Matters to a Vote of Security Holders                                 8

ITEM 5.    Other Information                                                                   8

ITEM 6.    Exhibits and Reports on Form 8-K                                                    9
</TABLE>


                                      -ii-
<PAGE>






ITEM 1.  FINANCIAL STATEMENTS

                           Consolidated Balance Sheet
<TABLE>
<CAPTION>

                                                                     March 31,    December 31,
                                                                       2003          2002 *
                                                                   -----------    -----------
                                                                   (Unaudited)
                                     Assets
<S>                                                                <C>            <C>
Current assets
    Cash                                                           $   320,296    $   346,213
    Due from Activeworlds, Inc.                                          6,916          6,916
    Prepaid expenses                                                    10,519         10,519
    Investments                                                         50,256         50,256
                                                                   -----------    -----------
              Total current assets                                     387,987        413,904
                                                                   -----------    -----------

              Total assets                                         $   387,987    $   413,904
                                                                   -----------    -----------

                      Liabilities and Stockholders' Equity
Current liabilities
    Accounts payable                                               $    17,781    $    19,323
    Accrued liabilities                                                  4,000         10,000
                                                                   -----------    -----------
              Total current liabilities                                 21,781         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                                             (5,166,100)    (5,147,725)
    Accumulated other comprehensive income (loss)                      (80,521)       (80,521)
                                                                   -----------    -----------
              Total stockholders' equity                               366,206        384,581
                                                                   -----------    -----------
              Total liabilities and stockholders' equity           $   387,987    $   413,904
                                                                   -----------    -----------
</TABLE>



*Derived from audited financial statements


See notes to consolidated financial statements

                                       1
<PAGE>


                      Consolidated Statement of Operations
<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                  March 31
                                                               2003        2002
                                                            ---------    ---------
                                                                 (Unaudited)
<S>                                                         <C>          <C>
Revenues                                                    $      --    $ 137,845
                                                            ---------    ---------
Operating expenses
    Selling, general and administrative expenses               18,375      325,510
    Research and development expenses                              --      105,525
                                                            ---------    ---------
              Total operating expenses                         18,375      431,035
                                                            ---------    ---------

    Loss from operations                                      (18,375)    (293,190)

Interest income                                                    --        7,494
                                                            ---------    ---------
    Loss before (provision for) benefit from income taxes     (18,375)    (285,696)
(Provision for) benefit from income taxes                          --           --
                                                            ---------    ---------

    Net loss                                                $ (18,375)   $(285,696)
                                                            ---------    ---------

Net (loss) per share of common stock
    Basic                                                   $   (.003)   $   (.034)
                                                            ---------    ---------
</TABLE>


See notes to consolidated financial statements



                                       2
<PAGE>

                      Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                         March 31
                                                                                   2003            2002
                                                                                -----------    -----------
                                                                                       (Unaudited)
<S>                                                                             <C>            <C>
Operating activities
    Net loss                                                                    $   (18,375)   $  (285,696)
    Adjustment to reconcile net loss to net cash used in operating activities
       Depreciation and amortization                                                     --          9,349
       Changes in operating assets and liabilities which provided (used) cash
          Accounts receivable                                                            --        (12,685)
          Prepaid expenses and other                                                     --        (35,151)
          Accounts payable                                                           (1,542)        (2,024)
          Accrued liabilities                                                        (6,000)       (15,499)
          Deferred revenue                                                               --        (15,930)
                                                                                -----------    -----------
              Net cash used in operating activities                                 (25,917)      (357,636)
                                                                                -----------    -----------

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                                                 --           (879)
                                                                                -----------    -----------
              Net cash used in financing activities                                      --           (879)
                                                                                -----------    -----------
Net decrease in cash                                                                (25,917)      (359,949)
Cash at beginning of period                                                         346,213      1,840,430
                                                                                -----------    -----------
              Cash at end of period                                             $   320,296    $ 1,480,481
                                                                                -----------    -----------
Supplemental disclosure information
    Cash paid for interest during the period                                    $        --    $         5
                                                                                -----------    -----------
</TABLE>

See notes to consolidated financial statements

                                       3
<PAGE>

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 and 2001.

         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>


         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 $80,511 at March 31, 2003 and December
         31, 2002. Accordingly, the value of the investment has been adjusted to
         $50,256 at March 31, 2003 and December 31, 2002.

Note 3 - Income taxes

         At March 31, 2003, the Company has a net operating loss carryforward of
         approximately $4,760,000 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 $1,900,000 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)

                            2003                                   5,319,790

                            2002                                   8,515,235

         Diluted net (loss) per share of common stock has not been presented for
         the three months ended March 31, 2003 and 2002 since the effect of
         including the stock options and warrants outstanding would be
         antidilutive.


                                       5
<PAGE>


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. As of March 31, 2003, 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 is currently in litigation regarding adjustments to the
         contract due to the lack of registrations received under the agreement.
         At this time the outcome of the litigation process cannot be
         determined.



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.


                                       6
<PAGE>

RESULTS OF OPERATIONS

         Three Months Ended March 31, 2003 Compared to Three Months ended March
31, 2002.

         Net Revenues. During the quarter ended March 31, 2003, net revenues
declined to $0 from $137,845 from the same period last year.

         Expenses. Selling, general and administrative expenses declined
substantially to $18,375 from $325,510 during the same period last year.
Research and development expenses decreased during the quarter ended March 31,
2003 to $0 from $105,525 during the first quarter in 2002.

         Net Loss. The net loss for the first quarter of 2003 declined
substantially to $18,375 from $285,696 for the quarter ended March 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

         For the three months ended March 31, 2003, net cash used by operating
activities was $25,917 in contrast to $357,636 for the corresponding period in
2002.

         In the three months ended March 31, 2003, net cash used by financing
activities was $0, while in the three months ended March 31, 2002, net cash of
$879 was used.

         During the three months ended March 31, 2003, net cash used in
investing activities was $0 in contrast to $1,434 for the corresponding period
in 2002.

         Working capital decreased to $387,987 at March 31, 2003 from 413,904 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 are forward-looking statements 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 (1) our inability to comply with any comments which the SEC staff may
issue with regard to the Information Statement filed on August 9, 2002 and (2)
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.

                                       7
<PAGE>


ITEM 3.  CONTROLS AND PROCEDURES

         Our chief executive officer and chief financial officer evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-14(c) under the Securities Exchange Act of 1934, as amended) within 90 days
of the filing date of this report (the "Evaluation Date") and, based on that
evaluation, concluded that, as of the Evaluation Date, the our disclosure
controls and procedures were effective in timely alerting them to the material
information relating to us that is required to be disclosed in our reports under
the Securities Exchange Act of 1934, as amended, within the time periods
specified in the Securities and Exchange Commission's rules and forms.

         Since the Evaluation Date, there have not been any significant changes
to our internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.


                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         Not applicable.

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.


                                       8
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBIT INDEX

         Exhibit
         Number     Description
         ------   -------------------------------
         99.1     Section 906 certification of CEO
         99.2     Section 906 certification of CFO

         (b)      REPORTS ON FORM 8-K.

                  None


                                       9
<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 May 15, 2003 by the
undersigned, thereunto duly authorized.


                                      ACTIVEWORLDS CORP.


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



                                       10
<PAGE>














<PAGE>


                                  CERTIFICATION

I, SEAN DESON, certify that:

1.       I have reviewed this report on Form 10Q-SB of ACTIVEWORLDS CORP.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made know to us by
                  others within those entities, particularly during the period
                  in which this report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this report (the "Evaluation Date"); and

         c)       presented in this report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function);

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date or our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Dated:  May 15, 2003

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


                                       11
<PAGE>



                                  CERTIFICATION

I, SEAN DESON, certify that:

1.       I have reviewed this report on Form 10-QSB of ACTIVEWORLDS CORP.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made know to us by
                  others within those entities, particularly during the period
                  in which this report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this report (the "Evaluation Date"); and

         c)       presented in this report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function);

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date or our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Dated:  May 15, 2003
                                                    /s/ Sean Deson
                                                    -------------------------
                                                    Sean Deson
                                                    Chief Financial Officer


                                       12












G:\Activeworlds\SEC Documents\10-QSB\Form 10-QSB - 3- 31- 2003.doc