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, 2004
                          Commission File No. 001-15819

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

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


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

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


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

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

We had 5,317,116 shares of our common stock outstanding as of May 17, 2004.

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

<PAGE>

                                      INDEX
<TABLE>
<CAPTION>

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<S>                                                                                     <C>
                         PART I - FINANCIAL INFORMATION

ITEM 1.    Financial Statements

           Condensed Consolidated Balance Sheets
                as of March 31, 2004 (unaudited) and December 31, 2003                    1

           Condensed Consolidated Statements of Income
                for the three ended March 31, 2004 and 2003 (unaudited)                   2

           Condensed Consolidated Statements of Cash Flows
                for the three months ended March 31, 2004 and 2003 (unaudited)            3

           Notes to unaudited condensed consolidated interim financial statements       4 - 5

ITEM 2.    Management's Discussion and Analysis of Interim Financial
                Condition and Results of Operations                                     5 - 6

ITEM 3.    Controls and Procedures                                                       6-7


                           PART II - OTHER INFORMATION

ITEM 1.    Legal Proceedings                                                              7

ITEM 2.    Change in Securities                                                           7

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                                               8

Signatures                                                                                9
</TABLE>

                                      -ii-

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                           Consolidated Balance Sheet


<TABLE>
<CAPTION>

                                                                    March 31,     December 31,
                                                                      2004           2003*
                                                                   -----------    ------------
                                                                   (Unaudited)
<S>                                                                <C>            <C>
                                     Assets

Current assets
    Cash                                                           $   391,941    $   407,318
    Investments                                                         87,111         87,111
                                                                   -----------    -----------
              Total current assets                                     479,052        494,429
                                                                   -----------    -----------

              Total assets                                         $   479,052    $   494,429
                                                                   -----------    -----------

                       Liabilities and Stockholders' Equity
Current liabilities
    Accounts payable                                               $       403    $       403
    Accrued liabilities                                                 10,463          8,500
                                                                   -----------    -----------
              Total current liabilities                                 10,866          8,903
                                                                   -----------    -----------

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,
      5,317,116 shares issued                                            5,317          5,317
    Additional paid-in capital                                       5,607,510      5,725,913
    Treasury stock                                                          --       (118,403)
    Accumulated deficit                                             (5,100,975)    (5,083,635)
    Accumulated other comprehensive income (loss)                      (43,666)       (43,666)
                                                                   -----------    -----------
              Total stockholders' equity                               468,186        485,526
                                                                   -----------    -----------

              Total liabilities and stockholders' equity           $   479,052    $   494,429
                                                                   -----------    -----------
</TABLE>

*Derived from audited financial statements

See notes to consolidated financial statements

                                       1
<PAGE>


                      Consolidated Statement of Operations


                                                             Three Months Ended
                                                                 March 31
                                                             ------------------
                                                             2004        2003
                                                           --------    --------

                                                                 (Unaudited)

Revenues                                                   $     --    $     --
                                                           --------    --------
Operating expenses
    Selling, general and administrative expenses             17,340      18,375
    Research and development expenses                            --          --
                                                           --------    --------
              Total operating expenses                       17,340      18,375
                                                           --------    --------

    Loss from operations                                    (17,340)    (18,375)

Interest income                                                  --          --
                                                           --------    --------
    Loss before (provision for) benefit from income taxes   (17,340)    (18,375)
(Provision for) benefit from income taxes                        --          --
                                                           --------    --------
    Net loss                                               $(17,340)   $(18,375)
                                                           --------    --------

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

See notes to consolidated financial statements


                                       2
<PAGE>


                      Consolidated Statement of Cash Flows



                                                            Three Months Ended
                                                                 March 31
                                                          --------------------
                                                             2004        2003
                                                          ---------   ---------
                                                               (Unaudited)

Operating activities
    Net loss                                              $ (17,340)  $ (18,375)
    Changes in operating assets and liabilities
      which provided (used) cash
       Accounts payable                                          --      (1,542)
       Accrued liabilities                                    1,963      (6,000)
                                                          ---------   ---------
              Net cash used in operating activities         (15,377)    (25,917)
                                                          ---------   ---------

Net decrease in cash                                        (15,377)    (25,917)
Cash at beginning of period                                 407,318     346,213
                                                          ---------   ---------

              Cash at end of period                       $ 391,941   $ 320,296
                                                          ---------   ---------

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


See notes to consolidated financial statements

                                       3
<PAGE>

Note 1 -      Basis of presentation

              The accompanying 2004 and 2003 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, 2003 and 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).

              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.
              The fair market value of the investment had decreased by $43,666
              at March 31, 2004 and December 31, 2003. Accordingly, the value of
              the investment has been adjusted to $87,111 at March 31, 2004 and
              December 31, 2003.

                                       4
<PAGE>

Note 3 -      Income taxes

              At March 31, 2004, the Company has a net operating loss
              carryforward of approximately $1,530,000 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 $612,000 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)

                             2004                      5,317,116

                             2003                      5,319,790

              Diluted net (loss) per share of common stock has not been
              presented for the three months ended March 31, 2004 and 2003 since
              the effect of including the stock options and warrants outstanding
              would be antidilutive.


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.
                                       5
<PAGE>


         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, LIQUIDITY AND CAPITAL RESOURCES

         There have been no material changes to our Results of Operations,
Liquidity or Capital Resources during the quarter ended March 31, 2004. For
further information, see our report on Form 10-KSB filed on March 30, 2004.


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 March 31, 2004, 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.

                                       6
<PAGE>

(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

         Not applicable.

ITEM 2. CHANGES IN SECURITIES

         (a) Not applicable.

         (b) Not applicable.

         (c) Not applicable.

         (d) Not applicable.

         (e) The following table provides information about purchases by
             Activeworlds Corp. and its affiliated purchasers during the
             quarter ended March 31, 2004 of equity securities that are
             registered by Activeworlds Corp. pursuant to Section 12 of the
             Exchange Act:

                      ISSUER PURCHASES OF EQUITY SECURITIES
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
PERIOD                    (A)                 (B)                      (C)                                (D)
                    TOTAL NUMBER OF      AVERAGE PRICE     TOTAL NUMBER OF SHARES (OR       MAXIMUM NUMBER (OR APPROXIMATE
                   SHARES (OR UNITS)     PAID PER SHARE    UNITS) PURCHASED AS PART OF    DOLLAR VALUE) OF SHARES (OR UNITS)
                       PURCHASED)          (OR UNIT)       PUBLICLY ANNOUNCED PLANS OR    THAT MAY YET BE PURCHASED UNDER THE
                                                                  PROGRAMS (1)                   PLANS OR PROGRAMS (1)
------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                 <C>                      <C>                                <C>
01/01/04-01/31/04          0                   $0                       0                                  0
------------------------------------------------------------------------------------------------------------------------------
02/01/04-02/29/04          0                    0                       0                                  0
------------------------------------------------------------------------------------------------------------------------------
03/01/04-                  0                    0                       0                                  0
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Activeworlds has not entered into any plans or programs under which it may
repurchase its common stock.

                                       7
<PAGE>

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
-------  ---------------------------------
31.1     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

                                       8
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf on May 18, 2004 by the
undersigned, thereunto duly authorized.


                                          ACTIVEWORLDS CORP.


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


                                       9