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


                                   FORM 10-QSB


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


               For the quarterly period ended: September 30, 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. 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:

We had 5,317,116 shares of our common stock outstanding as of November 12, 2004.

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




<PAGE>

<TABLE>
<CAPTION>

                                      INDEX
<S>        <C>                                                                                              <C>
                                                                                                              Page
                         PART I - FINANCIAL INFORMATION

ITEM 1.    Financial Statements
           Condensed Consolidated Balance Sheets
                as of September 30, 2004 (unaudited) and December 31, 2003                                      1

           Condensed Consolidated Statements of Income
                for the three and nine months ended September 30, 2004 and 2003 (unaudited)                     2

           Condensed Consolidated Statements of Cash Flows
                for the nine months ended September 30, 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                                                                                             9
</TABLE>

                                      -ii-

<PAGE>



ITEM 1.  FINANCIAL STATEMENTS


                                  Balance Sheet


<TABLE>
<CAPTION>

                                                                                     September 30,   December 31,
                                                                                         2004           2003 *
                                                                                     -------------  -------------
                                                                                      (Unaudited)
<S>                                                                                    <C>            <C>
                                                            Assets

Current assets
    Cash                                                                               $   356,595    $   407,318
    Investments                                                                             87,111         87,111
                                                                                     -------------  -------------
              Total current assets                                                         443,706        494,429
                                                                                     -------------  -------------

              Total assets                                                             $   443,706    $   494,429
                                                                                     -------------  -------------


                                             Liabilities and Stockholders' Equity
Current liabilities
    Accounts payable                                                                   $       300    $       403
    Accrued liabilities                                                                      7,200          8,500
                                                                                     -------------  -------------
              Total current liabilities                                                      7,500          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                                                           5,652,510      5,725,913
    Treasury stock                                                                            --         (118,403)
    Accumulated deficit                                                                 (5,177,955)    (5,083,635)
    Accumulated other comprehensive income (loss)                                          (43,666)       (43,666)
                                                                                     -------------  -------------
              Total stockholders' equity                                                   436,206        485,526
                                                                                     -------------  -------------

              Total liabilities and stockholders' equity                               $   443,706    $   494,429
                                                                                     -------------  -------------
</TABLE>


*Derived from audited financial statements

See notes to financial statements
                                        2

<PAGE>

                             Statement of Operations

<TABLE>
<CAPTION>


                                                               Three Months Ended                Nine Months Ended
                                                                  September 30                      September 30
                                                        ---------------------------------    ------------------------------

                                                              2004              2003             2004              2003
                                                        -----------------  --------------    -------------   --------------
                                                                  (Unaudited)                           (Unaudited)

<S>                                                     <C>                 <C>              <C>               <C>
Revenues                                                $          --       $          --    $          --     $          --
                                                        -------------       -------------    -------------     -------------

Operating expenses
    Selling, general and administrative
   expenses                                                    26,246               1,890           94,320            33,248
    Research and development expenses                              --                  --               --                --
                                                        -------------       -------------    -------------     -------------
              Total operating expenses                         26,246               1,890           94,320            33,248
                                                        -------------       -------------    -------------     -------------

    Loss from operations                                      (26,246)             (1,890)         (94,320)          (33,248)

Interest income                                                    --                  --               --                --
                                                        -------------       -------------    -------------     -------------
    (Loss) before litigation settlement and
      (provision for) benefit from income taxes
                                                              (26,246)             (1,890)         (94,320)          (33,248)

Litigation settlement (note 5)                                     --             105,000               --           105,000
                                                        -------------       -------------    -------------     -------------
                                                              (26,246)            103,110          (94,320)           71,752
                                                        -------------       -------------    -------------     -------------

(Provision for) benefit from income taxes                          --                  --               --                --
                                                        -------------       -------------    -------------     -------------

    Net income (loss)                                   $     (26,246)      $     103,110    $     (94,320)    $      71,752
                                                        -------------       -------------    -------------     -------------

Earnings (loss) per share of common stock
    Basic                                               $       (.005)      $        .019    $       (.018)    $        .014
                                                        -------------       -------------    -------------     -------------

Earnings (loss) per share of common stock
    Dilutive                                            $          --      $         .011    $          --     $        .007
                                                        -------------       -------------    -------------     -------------
</TABLE>


See notes to financial statements
                                        3


<PAGE>


                             Statement of Cash Flows

<TABLE>
<CAPTION>


                                                                                                  Nine Months Ended
                                                                                                    September 30
                                                                                               2004              2003
                                                                                          --------------    -------------
                                                                                                     (Unaudited)
<S>                                                                                        <C>              <C>
Operating activities
    Net income (loss)                                                                      $     (94,320)   $      71,752
    Adjustment to reconcile income (net) loss to net cash provided by (used in)
      operating activities
       Stock options issued for services                                                          45,000                -
       Changes in operating assets and liabilities which provided (used) cash
          Due from Activeworlds, Inc.                                                                  -            6,916
          Accounts payable                                                                         2,897          (16,131)
          Accrued liabilities                                                                     (4,300)          (4,000)
                                                                                           -------------    -------------
              Net cash provided by (used in) operating activities                                (50,723)          58,537
                                                                                           -------------    -------------

Net increase (decrease) in cash                                                                  (50,723)          58,537
Cash at beginning of period                                                                      407,318          346,213
                                                                                           -------------    -------------

              Cash at end of period                                                        $     356,595    $     404,750
                                                                                           -------------    -------------

Supplemental disclosure information
    Non-cash transaction - cancellation of treasury stock                                  $     118,403    $           -
                                                                                           -------------    -------------
</TABLE>

See notes to financial statements
                                        4


<PAGE>

Note 1 -      Basis of presentation

              The accompanying 2004 and 2003 unaudited interim 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.

              On July 10, 2002 the Company sold all of the issued and
              outstanding stock of its subsidiary, Activeworlds Inc. to the
              Company's management in exchange for management selling 2,595,445
              shares or approximately 30% of the Company's stock to the Company.
              At the time of the sale Activeworlds, Inc. generated substantially
              all of the operating revenues of the Company.

              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 September 30, 2004 and December 31, 2003. Accordingly, the
              value of the investment has been adjusted to $87,111 at September
              30, 2004 and December 31, 2003.

Note 3 -      Income taxes

              At September 30, 2004, the Company has a net operating loss
              carryforward of approximately $1,612,000 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 $645,000 due to the
              uncertainty of utilizing the deferred taxes in the future.

                                       5
<PAGE>

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

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

                                                           Weighted Average
                 Nine Months Ended September 30,           Number of Shares
                 -------------------------------           ----------------
                          (Unaudited)

                              2004                             5,317,116

                              2003                             5,319,790

              Diluted earnings (loss) per share of common stock has not been
              presented for the nine months ended September 30, 2004 since the
              effect of including the stock options and warrants outstanding
              would be antidilutive.

Note 5 -      Issuance of stock options

              On May 6, 2004, the Company issued 500,000 options under the
              Company's stock option plan exercisable at $.25 per share to a
              member of the Board of Directors for services rendered. The
              options are vested as follows: 250,000 options vest immediately;
              250,000 options vest upon closing of an acquisition in which
              control of the Company changes. The estimated value of the
              services recognized in exchange for the stock options was $25,000.

              The Company also issued 200,000 options exercisable at $.25 per
              share to individuals for services rendered. The estimated value of
              the services recognized in exchange for the stock options was
              $20,000.

Note 6 -      Proposed merger

              On September 9, 2004 the Company entered into a letter of intent
              to acquire Hi-G-Tek, Ltd. ("Hi-G-Tek") in a transaction expected
              to be treated as a reverse acquisition (the "Reverse
              Acquisition"). In connection with the Reverse Acquisition, the
              Company will organize a Delaware corporation which will acquire
              Hi-G-Tek in exchange for 43,183,474 shares of our outstanding
              common stock. Current stockholders will own 5,317,116 shares. As
              part of the transaction, the Company is required to have no less
              than $3,450,000 of cash in our bank account at Closing. The
              Company plans to raise the additional capital through a private
              offering of common stock and warrants which will result in the
              issuance of 5,789,963 shares of common stock at $.54 per share and
              warrants to purchase 2,894,981 shares of common stock exercisable
              at $3.00 per share. The letter of intent is binding subject to
              each party's satisfactory completion of its due diligence
              investigation and the execution of definitive agreements. As of
              the date of this Report, the Company has not yet completed its due
              diligence investigation.

                                       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 11, 2002. We are now seeking and evaluating
business opportunities. We have not had revenues from operations since July 10,
2002.

         On September 9, 2004 we entered into a letter of intent to acquire
Hi-G-Tek in a Reverse Acquisition. The Reverse Acquisition is subject to
completion of due diligence and execution of a definitive agreement. Although we
have essentially completed negotiations with Hi-G-Tek on the definitive
agreement, we have not yet completed our due diligence. No assurances can be
given that the Reverse Merger will be completed. If we close the Reverse Merger,
our future results of operations and balance sheet will be materially affected.

         Our primary expenses relate to our reporting obligations under the
Securities Exchange Act of 1934 and expenses related to the Reverse Acquisition
of Hi-G-Tek or the acquisition of another business opportunity if the Reverse
Acquisition does not close. We will incur expenses due to the legal and
accounting services required to prepare periodic reports and the costs of filing
these reports with the Securities and Exchange Commission. In 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, LIQUIDITY AND CAPITAL RESOURCES

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

                                       7
<PAGE>


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

         The statements made in this Report relating to our expectations about
closing the Reverse Acquisition with Hi-G-Tek and our ability to raise cash
through a private offering of common stock and warrants 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 matters relating to completion of our due diligence. 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, 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. 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. CHANGES IN SECURITIES
         (a)  Not applicable.
         (b)  Not applicable.
         (c)  The following table provides information about purchases by
              Activeworlds Corp. and its affiliated purchasers during the
              quarter ended September 30, 2004 of equity securities that are
              registered by Activeworlds Corp. pursuant to Section 12 of the
              Exchange Act:
<TABLE>
<CAPTION>

                      ISSUER PURCHASES OF EQUITY SECURITIES
----------------- --------------------- ----------------- ------------------------------ --------------------------------------
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>
07/01/04-07/31/04          0                   $0                       0                                  0
----------------- --------------------- ----------------- ------------------------------ --------------------------------------
08/01/04-08/31/04          0                   0                        0                                  0
----------------- --------------------- ----------------- ------------------------------ --------------------------------------
09/01/04-09/30/04          0                   0                        0                                  0
----------------- --------------------- ----------------- ------------------------------ --------------------------------------
</TABLE>

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


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

         (a)  EXHIBIT INDEX

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

10.1       Letter of intent with Hi-G-Tek dated September 9, 2004(1)
31.1       Certification of CEO
31.2       Certification of CFO
32.1       Section 1350 certification of CEO
32.2       Section 1350 certification of CFO

(1)  Contained in Report on Form 8-K filed on September 14, 2004


                                       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 15, 2004 by
the undersigned, thereunto duly authorized.


                                         ACTIVEWORLDS CORP.


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


                                       10