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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB

MARK ONE

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

                For the Quarterly Period ended September 30, 2007

[_]  Transition Report Pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934

     For the transition period from _______________to _______________

                        COMMISSION FILE NUMBER 001-15819
                                               ---------

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

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

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

              Delaware                                         13-3883101
   (State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization)                          Identification No.)

                           40 Wall Street, 58th Floor
                               New York, NY 10005
          (Address of principal executive offices, including zip code)

                                 (212) 509-1700
                (Issuer's telephone number, including area code)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
                                                                  Yes [X] No [ ]

         Indicate by a check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes [X] No [ ]

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 6,250,010 shares of common
stock were outstanding as of November 19, 2007.

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

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<PAGE>


                                      INDEX

                                                                           Page

                         PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements
         Condensed Consolidated Balance Sheets
            as of September 30, 2007 (unaudited) and December 31, 2006
            (unaudited)                                                      1

         Condensed Consolidated Statements of Operations
            for the three months and nine months ended September 30, 2007
            (unaudited) and 2006 (unaudited)                                 2

         Condensed Consolidated Statements of Cash Flows
            for the three months ended September 30, 2007
            (unaudited) and 2006 (unaudited)                                 3

         Notes to unaudited condensed consolidated interim
            financial statements                                             4

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

ITEM 3.  Controls and Procedures                                             8

                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                   9

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds         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                                                            9







                                      -ii-

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               ACTIVEWORLDS CORP.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                       SEPTEMBER 30,  DECEMBER 31,
                                                                                           2007          2006 *
                                                                                       -----------    -----------
                                                                                       (Unaudited)
<S>                                                                                    <C>            <C>
                                     Assets

Current assets
    Cash                                                                               $   247,049    $   247,241
                                                                                       -----------    -----------
              Total current assets                                                         247,049        247,241
                                                                                       -----------    -----------
              Total assets                                                             $   247,049    $   247,241
                                                                                       -----------    -----------


                      Liabilities and Stockholders' Equity

Current liabilities
    Accrued liabilities                                                                $     3,000    $     8,500
                                                                                       -----------    -----------
              Total current liabilities                                                      3,000          8,500
                                                                                       -----------    -----------

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,
      6,250,010 shares issued                                                                6,250          5,317
    Additional paid-in capital                                                           7,193,706      6,882,510
    Accumulated deficit                                                                 (6,955,907)    (6,649,086)
                                                                                       -----------    -----------
              Total stockholders' equity                                                   244,049        238,741
                                                                                       -----------    -----------
              Total liabilities and stockholders' equity                               $   247,049    $   247,241
                                                                                       -----------    -----------

</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
                                                   ----------------------    ----------------------
                                                      2007         2006         2007         2006
                                                   ---------    ---------    ---------    ---------
                                                         (Unaudited)               (Unaudited)
<S>                                                <C>          <C>          <C>          <C>
Revenues                                           $      --    $      --    $      --    $      --
                                                   ---------    ---------    ---------    ---------

Operating expenses
    Selling, general and administrative expenses     295,875      157,363      306,821      483,503
    Research and development expenses                     --           --           --           --
                                                   ---------    ---------    ---------    ---------
              Total operating expenses               295,875      157,363      306,821      483,503
                                                   ---------    ---------    ---------    ---------

    Loss from operations                            (295,875)    (157,363)    (306,821)    (483,503)
                                                   ---------    ---------    ---------    ---------
    Loss before income taxes                        (295,875)    (157,363)    (306,821)    (483,503)
Income taxes                                              --           --           --           --
                                                   ---------    ---------    ---------    ---------
    Net loss                                       $(295,875)   $(157,363)   $(306,821)   $(483,503)
                                                   ---------    ---------    ---------    ---------
Net loss per share of common stock
    Basic                                          $   (.055)   $   (.030)   $   (.057)   $   (.091)
                                                   ---------    ---------    ---------    ---------

</TABLE>






                 See notes to consolidated financial statements

                                        2

<PAGE>


                               ACTIVEWORLDS CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     NINE MONTHS ENDED
                                                                                       SEPTEMBER 30
                                                                                  ----------------------
                                                                                     2007         2006
                                                                                  ---------    ---------
                                                                                       (Unaudited)
<S>                                                                               <C>          <C>
Operating activities
    Net (loss)                                                                    $(306,821)   $(483,503)
    Adjustment to reconcile net (loss) to net cash used in operating activities
       Stock options issued for services                                            293,379      461,250
    Changes in operating assets and liabilities which provided (used) cash
       Accrued liabilities                                                           (5,500)      (5,500)
                                                                                  ---------    ---------
              Net cash used in operating activities                                 (18,942)     (27,753)
                                                                                  ---------    ---------

Financing activities
    Exercise of warrants                                                             18,750           --
                                                                                  ---------    ---------

Net decrease in cash                                                                   (192)     (27,753)
Cash at beginning of period                                                         247,241      307,073
                                                                                  ---------    ---------

              Cash at end of period                                               $ 247,049    $ 279,320
                                                                                  ---------    ---------

</TABLE>



                 See notes to consolidated financial statements

                                        3


<PAGE>

                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007


Note 1 -      Basis of presentation

              The accompanying 2007 and 2006 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, 2006 and 2005.

              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.

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

              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 $130,777
              based on trading on the Australian Stock Exchange ("ASE"). Trading
              of the common stock of Green X Global Limited (Green X), formerly
              known as 3D Global Limited, was suspended pending the acquisition
              of Red X Property Pty. Ltd. ("Red X"). In anticipation of the
              acquisition Green X consolidated its share capital through a
              reverse stock split wherein the Company received one share for
              every 20 shares held. After the reverse split the Company holds
              490,000 shares of Green X. The acquisition of Red X was completed
              during 2005, however, trading remained suspended.

              On November 17, 2006, pursuant to Section 436A of the Corporations
              Act, an Administrator was appointed due to financial difficulties
              of Green X. The Administrator is currently managing the business,
              property, and affairs of Green X and interacting with creditors of
              Green X at this time. Due to the facts and circumstances,
              management decided to establish a reserve for the remaining
              carrying value of $85,839 in the investment in Green X Global
              Limited as of December 31, 2006, effectively offsetting the value
              of the investment. The impairment is considered to be other than

                                       4

<PAGE>

                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007


              temporary therefore a loss for the full value of the investment,
              $130,777, was recognized in the net loss and the previous
              unrealized losses were reclassified as of December 31, 2006. The
              investment continues to be other than temporary and the investment
              remains fully reserved at September 30, 2007.

Note 3 -      Income taxes

              At September 30, 2007, the Company has a net operating loss
              carryforward of approximately $3,640,000 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 $1,456,000 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
                     Nine Months Ended September 30,          Number of Shares
                     -------------------------------          ----------------
                               (Unaudited)

                                   2007                          5,398,459

                                   2006                          5,317,116

              Diluted net (loss) per share of common stock has not been
              presented for the nine months ended September 30, 2007 and 2006
              since the effect of including the stock options and warrants
              outstanding would be antidilutive.

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 was for two years from the date of the
              contract (measurement date). The fair value of the warrants of
              $1,230,000 issued for the consulting services was 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. The contract expired in December 2006. Expenses
              for consulting services under the contract were recognized in the
              amount of $-0- and $461,250 for the nine months ended September
              30, 2007 and 2006, respectively. The fair value was 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%


              In August 2007, the sole member of the Corporation's Board of
              Directors reduced the exercise price of the 750,000 common stock
              warrants issued under the consulting contract described above,
              from $2.00 per share to $0.25 per share. The modification in fair
              value as a result of the decrease in exercise price was determined
              using the Black Scholes Model with the following assumptions:


                                       5

<PAGE>

                               ACTIVEWORLDS CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007


                   Risk-free interest rate                       4.60%
                   Volatility                                   100.0%
                   Expected life                           3.5 months
                   Expected dividend yield                       0.00%


              In August 2007, the sole member of the Corporation's Board of
              Directors also reduced the exercise price of 300,000 common stock
              warrants issued under a separate contract, from $1.1875 per share
              to $0.25 per share. The modification in fair value as a result of
              the decrease in exercise price was determined using the Black
              Scholes Model with the following assumptions:

                   Risk-free interest rate                       4.60%
                   Volatility                                   100.0%
                   Expected life                              3 years
                   Expected dividend yield                       0.00%


              The total modification in fair value of the warrants described
              above was $293,379 and has been recognized as additional
              consulting services.

              In September 2007, the principal stockholder cashlessly exercised
              the 1,050,000 warrants at their reduced exercise price and an
              additional 300,000 warrants at $0.06 per share. The stockholder
              received a total of 857,894 common shares through the exercise of
              warrants.








                                       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. We have
been inactive since September 2002 since we sold our business to our former
management. We are now seeking business opportunities. We have not had revenues
from operations since July 2002.

         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.

         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.

RESULTS OF OPERATIONS

         We had no revenue for the quarter and nine months ended September 30,
2007 and 2006. Our net loss for the three and nine months ended September 30,
2007 was $295,875 and $306,821, respectively, in contrast to $157,363 and
$483,503, respectively, for the same periods of 2006. The 2006 expenses were
primarily non-cash expense related to the amortization of warrants which were
fully amortized as of January 1, 2007. Our only expenses are currently public
company expenses. The 2007 expenses were primarily non cash charges relating to
the reduction of the exercise price of the warrants held by the Company's
principal shareholder.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2007 we had total assets of $247,049 consisting of
cash and total liabilities of $3,000.

                                       7


<PAGE>

         For further information, see our report on Form 10-KSB for the year
ended December 31, 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.

ITEM 3.  CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures

         As of September 30, 2007, 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. 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.


                                       8
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

         Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         (a) Not applicable.

         (b) Not applicable.

         (c) 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.


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



                                       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 November 19, 2007 by
the undersigned, thereunto duly authorized.


                                           ACTIVEWORLDS CORP.


                                           /s/ Paul Goodman
                                           -------------------------------------
                                           Paul Goodman, Chief Executive Officer












                                       10

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