UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

             [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                               OF THE EXCHANGE ACT

         FOR THE TRANSITION PERIOD FROM ____________ TO ________________

                        COMMISSION FILE NUMBER __________

                                 THINKPATH INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


                                ONTARIO 52-209027
                 ------------------------- --------------------
                (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
               INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

                             201 WESTCREEK BOULEVARD
                            BRAMPTON, ONTARIO L6T 5S6
               ---------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (905) 460-3040
                               -------------------
                (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 |_|

          AS OF AUGUST 14, 2003 THERE WERE 537,919,783 SHARES OF COMMON
                   STOCK, NO PAR VALUE PER SHARE, OUTSTANDING.




<PAGE>


                                 THINKPATH INC.

                   JUNE 30, 2003 QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION
                                                                     Page Number


Item 1.  Financial Statements

         Interim Consolidated Balance Sheets as of June 30, 2003 and
         December 31, 2002 and 2001...........................................

         Interim Consolidated Statements of Income for the three
         and six months ended June 30, 2003 and 2002 .........................

         Interim Consolidated Statements of Stockholders' Equity
         for the six months ended June 30, 2003...............................

         Interim Consolidated Statements of Cash Flows for the six months
         ended June 30, 2003 and 2002 ........................................

         Notes to Interim Consolidated Financial Statements...................

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...........

Item 4.  Controls and Procedures..............................................


                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings ...................................................

Item 2.  Changes in Securities and Use of Proceeds ...........................

Item 3.  Defaults Upon Senior Securities .....................................

Item 4.  Submission of Matters to a Vote of Security Holders .................

Item 5.  Other Information ...................................................

Item 6.  Exhibits and Reports on Form 8-K ....................................


<PAGE>


ITEM 1.  FINANCIAL STATEMENTS







                                 THINKPATH INC.

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               AS OF JUNE 30, 2003
                                   (UNAUDITED)

                        (AMOUNTS EXPRESSED IN US DOLLARS)



<PAGE>
<TABLE>
<CAPTION>


THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002, AND 2001
(AMOUNTS EXPRESSED IN US DOLLARS)


                                             JUNE 30,   DECEMBER 30,   DECEMBER 30,
                                               2003         2002           2001
                                                 $           $               $

                                     ASSETS

CURRENT ASSETS
<S>                                            <C>          <C>          <C>
     Cash                                      578,038      114,018      482,233
     Accounts receivable                     1,890,830    2,663,823    5,502,113
     Inventory                                    --           --         40,057
     Income taxes receivable                      --           --        431,817
     Prepaid expenses                          215,763      196,683      345,341
                                             ---------    ---------    ---------

                                             2,684,631    2,974,524    6,801,561

PROPERTY AND EQUIPMENT                       1,560,721    1,915,379    2,859,340

GOODWILL                                     3,748,732    3,748,732    5,128,991

INVESTMENT IN NON-RELATED COMPANIES             45,669       45,669    1,013,926

LONG-TERM RECEIVABLE                              --         53,924       83,450

OTHER ASSETS                                    51,982       49,303    1,287,710
                                             ---------    ---------    ---------

                                             8,091,735    8,787,531   17,174,978
                                             =========    =========   ==========

</TABLE>





                                      F-1
<PAGE>
<TABLE>
<CAPTION>


THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002, AND 2001
(AMOUNTS EXPRESSED IN US DOLLARS)





                                              JUNE 30,     DECEMBER 31,    DECEMBER 31,
                                                2003           2002            2001
                                                  $             $                $

                                   LIABILITIES

CURRENT LIABILITIES
<S>                                              <C>            <C>          <C>
     Bank indebtedness                           253,639        209,776      5,039,171
     Receivable Discount Facility              1,209,898      2,340,579           --
     Accounts payable                          2,430,418      3,197,286      4,073,444
     Deferred revenue                               --          163,609        365,023
     Current portion of long-term debt           339,642        380,188        528,285
     Current portion of notes payable            206,045        208,254        150,000
     12% Convertible Debenture                   717,155        192,950           --
                                             -----------    -----------    -----------
                                               5,156,797      6,692,642     10,155,923

DEFERRED INCOME TAXES                               --             --          150,380

LONG-TERM DEBT                                    56,427         84,756        582,432

NOTES PAYABLE                                    681,773        686,703      2,340,000

LIABILITIES PAYABLE IN CAPITAL STOCK                --             --          699,297
                                             -----------    -----------    -----------
                                               5,894,997      7,464,101     13,928,032
                                             ===========    ===========    ===========
COMMITMENTS AND CONTINGENCIES (NOTE 23)

                              STOCKHOLDERS' EQUITY


CAPITAL STOCK                                 39,643,294     33,367,034     26,571,481

DEFICIT                                      (36,266,941)   (30,966,083)   (22,719,044)

ACCUMULATED OTHER COMPREHENSIVE LOSS          (1,179,615)    (1,077,521)      (605,491)
                                             -----------    -----------    -----------
                                               2,196,738      1,323,430      3,246,946
                                             -----------    -----------    -----------
                                               8,091,735      8,787,531     17,174,978
                                             ===========    ===========    ===========


                 The accompanying notes are an integral part of
                 these interim consolidated financial statements
</TABLE>



                                      F-2
<PAGE>
<TABLE>
<CAPTION>

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(AMOUNTS EXPRESSED IN US DOLLARS)




                                               THREE MONTHS    THREE MONTHS     SIX MONTHS      SIX MONTHS
                                                   ENDED          ENDED            ENDED          ENDED
                                                   2003            2002            2003            2002
                                                     $              $                $              $

<S>                                               <C>             <C>             <C>             <C>
REVENUE                                           2,471,706       3,506,669       4,961,993       7,063,543

COST OF SERVICES                                  1,615,654       2,403,397       3,383,606       4,822,564
                                                -----------      ----------     -----------      ----------
GROSS PROFIT                                        856,052       1,103,272       1,578,387       2,240,979
                                                -----------      ----------     -----------      ----------
EXPENSES
      Administrative                                541,999         791,034       1,194,042       1,542,812
      Selling                                       250,385         667,164         503,017       1,305,497
      Depreciation and amortization                 184,571         268,994         376,636         526,390
                                                -----------      ----------     -----------      ----------
                                                    976,955       1,727,192       2,073,695       3,374,699

LOSS FROM CONTINUING OPERATIONS
      BEFORE INTEREST CHARGES                      (120,903)       (623,920)       (495,308)     (1,133,720)

      Interest Charges                              796,120         218,400       5,076,882         441,435
                                                -----------      ----------     -----------      ----------
LOSS FROM CONTINUING OPERATIONS
      BEFORE INCOME TAXES                          (917,023)       (842,320)     (5,572,190)     (1,575,155)

      Income Taxes (recovery)                         8,404             110          12,023         (25,751)
                                                -----------      ----------     -----------      ----------
LOSS FROM CONTINUING OPERATIONS                    (925,427)       (842,430)     (5,584,213)     (1,549,404)

INCOME FROM DISCONTINUED OPERATIONS
      (INCLUDING GAIN ON DISPOSAL)                  280,152         335,125         283,355         542,629
                                                -----------      ----------     -----------      ----------
NET LOSS BEFORE PREFERRED STOCK DIVIDENDS          (645,275)       (507,305)     (5,300,858)     (1,006,775)

PREFERRED STOCK DIVIDENDS                              --            31,493            --            55,173

NET LOSS APPLICABLE TO COMMON STOCK                (645,275)       (538,798)     (5,300,858)     (1,061,948)
                                                ===========      ==========     ===========      ==========
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
      OUTSTANDING BASIC AND FULLY DILUTED       201,863,253      24,511,005     148,567,552      21,182,368
                                                ===========      ==========     ===========      ==========
LOSS FROM CONTINUING OPERATIONS PER WEIGHTED
      AVERAGE COMMON STOCK BEFORE PREFERRED
      DIVIDENDS BASIC AND FULLY DILUTED               (0.00)          (0.02)          (0.04)          (0.05)
                                                ===========      ==========     ===========      ==========
LOSS FROM CONTINUING OPERATIONS PER WEIGHTED
      AVERAGE COMMON STOCK AFTER PREFERRED
      DIVIDENDS BASIC AND FULLY DILUTED               (0.00)          (0.02)          (0.04)          (0.05)
                                                ===========      ==========     ===========      ==========

                 The accompanying notes are an integral part of
                 these interim consolidated financial statements

</TABLE>





                                      F-3
<PAGE>


THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND THE YEARS ENDED
DECEMBER 31, 2002 AND 2001
(AMOUNTS EXPRESSED IN US DOLLARS)

<TABLE>
<CAPTION>
                                                                                                                        ACCUMULATED
                                 COMMON STOCK        PREFERRED STOCK          CAPITAL                                     OTHER
                                   NUMBER OF         NUMBER OF SHARES          STOCK                   COMPREHENSIVE   COMPREHENSIVE
                                    SHARES         A          B        C       AMOUNTS       DEFICIT         LOSS          LOSS
                                 ------------  --------  --------  --------  ------------  ------------  ------------  ------------
<S>                              <C>           <C>       <C>       <C>       <C>           <C>           <C>           <C>
Balance as of December 31, 2000    11,915,138     1,050       750       --     23,759,415   (12,306,862)                   (653,547)
                                 ============  ========  ========  ========  ============  ============                ============
Net loss for the year before
preferred stock dividends                  --        --        --        --            --                 (9,683,442)    (9,683,442)
                                                                                                         ------------
Other comprehensive income
(loss), net of tax:
   Foreign currency translation            --        --        --        --            --            --       209,506
   Adjustment to market value              --        --        --        --            --            --      (161,450)
                                                                                                         ------------
 Other comprehensive income                                                                                    48,056        48,056
                                                                                                         ------------
Comprehensive loss                                                                                         (9,635,386)
                                                                                                         ============
Issuance of common stock
for cash                              525,000        --        --        --       400,000            --

Issuance of preferred stock                --        --        --     1,230     1,230,000            --

Reduction in common
stock payable                         596,667        --        --        --       709,005            --

Dividend on preferred stock                --        --        --        --       414,848      (444,647)

Conversion of preferred stock
to common stock                     3,864,634    (1,050)     (750)     (285)           --            --

Beneficial conversion on
Issuance of preferred stock                --        --        --        --       284,093      (284,093)

Options exercised                      22,122        --        --        --             1            --

Debt settled through the
issuance of common stock               93,883        --        --        --        44,125            --

Common stock and warrants
issued in consideration of
services                              714,267        --        --        --       519,994            --

Allowance for deferred taxes
Recoverable on issue expenses              --        --        --        --      (790,000)
                                 ------------  --------  --------  --------  ------------  ------------                ------------
Balance as of
December 31, 2001                  17,731,711        --        --       945    26,571,481   (22,719,044)                   (605,491)
                                 ============  ========  ========  ========  ============  ============                ============
Net loss for the year before
preferred stock dividends                  --        --        --        --            --    (8,146,652)   (8,146,652)
                                                                                                         ------------
Other comprehensive income
(loss), net of tax:
   Foreign currency translation            --        --        --        --            --            --      (171,283)
   Adjustment to market value              --        --        --        --            --            --      (300,747)
                                                                                                        -------------
 Other comprehensive income                                                                                  (472,030)     (472,030)
                                                                                                        -------------
Comprehensive loss                                                                                         (7,674,622)
                                                                                                        =============
Reduction in common stock
payable                             8,387,840        --        --        --     1,098,955            --

Dividend on preferred stock                --        --        --        --        67,530       (67,530)

Conversion of preferred stock
to common stock                    23,278,448        --        --      (945)           --            --

Beneficial conversion on
issuance of preferred stock                --        --        --        --        32,857       (32,857)

Debt settled through the
issuance of common stock            2,982,018        --        --        --       434,348            --

Common stock and warrants
issued in consideration of
services                           13,878,026        --        --        --     1,556,485            --

Warrants issued for cash                   --        --        --        --       707,050            --

Beneficial conversion on
issuance of convertible debt               --        --        --        --     2,898,328            --
                                 ------------  --------  --------  --------  ------------  ------------                ------------
Balance as of December 31, 2002    66,258,043        --        --        --    33,367,034   (30,966,083)                 (1,077,521)
                                 ============  ========  ========  ========  ============  ============                ============
Net loss for the period                    --        --        --        --            --    (5,300,858)   (5,300,858)
                                                                                                         ------------
Other comprehensive income
(loss), net of tax:
   Foreign currency translation            --        --        --        --            --            --      (102,094)     (102,094)
   Adjustment to market value              --        --        --        --            --            --            --
                                                                                                         ------------
 Other comprehensive income                                                                                        --
                                                                                                         ------------
Comprehensive loss                                                                                         (5,402,952)
                                                                                                         ============
Conversion of 12% senior
secured convertible debenture     218,171,336        --        --        --       158,467            --

Interest on 12% senior secured
Convertible debenture               9,707,774        --        --        --        23,802            --

Debt settled through the
issuance of common stock           16,997,854        --        --        --       449,333            --

Common stock and warrants
issued in consideration of
services                           10,980,000        --        --        --       226,500            --

Warrants issued for cash                   --        --        --        --       767,452            --

Beneficial conversion on
issuance of convertible debt               --        --        --        --     4,650,706            --
                                 ------------  --------  --------  --------  ------------  ------------                ------------
Balance as of June 30, 2003       322,115,007        --        --        --    39,643,294   (36,266,941)                 (1,179,615)
                                 ============  ========  ========  ========  ============  ============                ============



          The accompanying notes are an integral part of these interim
                       consolidated financial statements.
</TABLE>





                                      F-4
<PAGE>
<TABLE>
<CAPTION>

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(AMOUNTS EXPRESSED IN US DOLLARS)






                                                                     2003           2002
                                                                       $             $
Cash flows from operating activities
<S>                                                                <C>           <C>
    Net loss before preferred stock dividends                      (5,300,858)   (1,006,775)

    Adjustments to reconcile net loss to net cash
     (used in) provided by operating activities:

    Amortization                                                      387,023       692,134
    Amortization of beneficial conversion (included in interest)    4,650,706          --
    Decrease (increase) in accounts receivable                        866,321       483,589
    Decrease (increase) in prepaid expenses                            (7,813)     (599,840)
    Increase (decrease) in accounts payable                          (873,870)     (512,012)
    Decrease (increase) in deferred income taxes                         --            --
    Decrease (increase) in inventory                                     --           1,122
    Decrease (increase) in long-term receivable                        57,775          --
    Increase (decrease) in deferred revenue                          (163,593)     (124,036)
    Increase in income taxes payable (receivable)                        --         269,699
    Common stock and warrants issued for services                     226,500       578,909
    Accounts payable settled with common stock                        449,333          --
    Gain on disposal of subsidiary                                       --        (497,579)
    Gain on disposal of IT Recruitment division                      (190,627)           --
                                                                   ----------    ----------
    Total adjustments                                               5,401,755       291,986
                                                                   ----------    ----------
    Net cash used in operating activities                             100,897      (714,789)
                                                                   ----------    ----------
Cash flows from investing activities
    Purchase of capital assets                                        (65,209)     (246,570)
    Disposal (purchase) of other assets                                  --          16,156
    Proceeds on sale of fixed assets                                     --            --
    Proceeds on disposal of subsidiary                                   --       1,320,786
    Proceeds on disposal of IT Recruitment division                   146,046          --
                                                                   ----------    ----------
    Net cash provided from (used in) investing activities              81,197     1,090,372
                                                                   ----------    ----------
Cash flows from financing activities
    Repayment of notes payable                                         (7,138)      (75,000)
    Repayment of long-term debt                                    (1,243,377)     (390,768)
    Cash received (paid) on long-term debt                               --         259,350
    Proceeds from issuance of common stock                               --            --
    Proceeds from issuance of debentures and warrants               1,450,000          --
    Increase (decrease in bank indebtedness)                             --        (617,516)
                                                                   ----------    ----------
    Net cash provided by financing activities                         199,485      (823,934)
                                                                   ----------    ----------
Effect of foreign currency exchange rate changes                       82,441       22,448
                                                                   ----------    ----------
Net increase (decrease) in cash and cash equivalents                  464,020      (425,903)
Cash and cash equivalents
    Beginning of period                                               114,018       482,233
                                                                   ----------    ----------
    End of period                                                     578,038        56,330
                                                                   ==========    ==========

SUPPLEMENTAL CASH ITEMS:
    Interest paid                                                     332,963       476,838
                                                                   ==========    ==========
    Income taxes paid (recovered)                                      12,023       (25,300)
                                                                   ==========    ==========

SUPPLEMENTAL NON-CASH ITEMS:
    Preferred stock dividend                                             --          55,173
    Common shares issued for liabilities                              449,333       701,253
    Reduction in notes payable                                           --            --
                                                                   ==========    ==========

                 The accompanying notes are an integral part of
                 these interim consolidated financial statements


</TABLE>





                                      F-5
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


1. MANAGEMENT'S INTENTIONS

     Certain principal conditions and events are prevalent which indicate that
     there could be substantial doubt about the company's ability to continue as
     a going concern for a reasonable period of time. These conditions and
     events include significant operating losses, working capital deficiencies,
     and violation of certain loan covenants. At June 30, 2003, the Company had
     a working capital deficiency of $2,472,166, a deficit of $36,266,941 and
     has suffered recurring losses from operations.

     With insufficient working capital from operations, the Company's primary
     sources of cash are a receivable discount facility with Morrison Financial
     Services Limited and proceeds from the sale of equity securities. At June
     30, 2003, the balance on the receivable discount facility was approximately
     $1,210,000. The company is currently within margin of its receivable
     discount facility with Morrison Financial Services Limited based on 75% of
     qualifying accounts receivable.

     During the three months ended June 30, 2003, the company closed $575,000 in
     convertible debentures pursuant to a financing arrangement entered into on
     December 5, 2002. The funds were used for various debt settlements and
     critical payables.

     As at August 14, 2003, management's plans to mitigate and alleviate these
     adverse conditions and events include:

     a) Commitment from investors for additional convertible debentures of up to
        $200,000 to be used for working capital. Although there can be no
        assurances, it is anticipated that continued cash flow improvements will
        be sufficient to cover current operating costs and will permit payments
        to certain vendors and interest payments on debt.

     b) Ongoing restructuring of debt obligations and settlement of outstanding
        claims.

     c) Focus on growth in the engineering division, including design services
        and technical publications and expansion of the engineering service
        offerings to Ontario, Canada to replace existing lower margin
        information staffing services.

     Despite its negative working capital and deficit, the company believes that
     its management has developed a business plan that if successfully
     implemented could substantially improve the company's operational results
     and financial condition. However, the company can give no assurances that
     its current cash flows from operations, if any, borrowings available under
     its receivable discounting facility with Morrison Financial Services
     Limited, and proceeds from the sale of securities, will be adequate to fund
     its expected operating and capital needs for the next twelve months. The
     adequacy of cash resources over the next twelve months is primarily
     dependent on its operating results, and the closing of new financing, all
     of which are subject to substantial uncertainties. Cash flows from
     operations for the next twelve months will be dependent, among other
     factors, upon the effect of the current economic slowdown on sales, the
     impact of the restructuring plan and management's ability to implement its
     business plan. The failure to return to profitability and optimize
     operating cash flows in the short term, and close alternate financing,
     could have a material adverse effect on the company's liquidity position
     and capital resources.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a) Going Concern

     These consolidated financial statements have been prepared on the going
     concern basis, which assumes the realization of assets and liquidation of
     liabilities and commitments in the normal course of business. The
     application of the going concern concept is dependent on the Company's
     ability to generate sufficient working capital from operations and external
     investors. These consolidated financial statements do not give effect to
     any adjustments should the Company be unable to continue as a going concern
     and, therefore, be required to realize its assets and discharge its
     liabilities in other than the normal course of business and at amounts
     differing from those reflected in the consolidated financial statements.
     Management plans to obtain sufficient working capital from operations and
     external financing to meet the Company's liabilities and commitments as
     they become payable over the next twelve months. There can be no assurance
     that management's plans will be successful. Failure to obtain sufficient
     working capital from operations and external financing will cause the
     Company to curtail operations. These consolidated financial statements do
     not include any adjustments that might result from the outcome of this
     uncertainty.




                                      F-6
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     b) Change of Name

     The company changed its name from IT Staffing Ltd. to Thinkpath.com Inc. on
     February 24, 2000. On June 6, 2001, the company changed its name from
     Thinkpath.com Inc. to Thinkpath Inc.


     c) Principal Business Activities

     Thinkpath Inc. is an information technology and engineering services
     company which, along with its wholly-owned subsidiaries Thinkpath US Inc.
     (formerly Cad Cam Inc.), Thinkpath Michigan Inc. (formerly Cad Cam of
     Michigan Inc.), Thinkpath Technical Services Inc. (formerly Cad Cam
     Technical Services Inc.), provides engineering, design, technical
     publications and staffing, services to enhance the resource performance of
     clients. In addition, the company owns the following companies which are
     currently inactive: Systemsearch Consulting Services Inc., International
     Career Specialists Ltd., Microtech Professionals Inc., E-Wink Inc. (80%),
     Thinkpath Training Inc. (formerly ObjectArts Inc.), Thinkpath Training US
     Inc. (formerly ObjectArts US Inc.) and TidalBeach Inc. In 2002, the company
     sold Njoyn Software Incorporated, a wholly-owned subsidiary.

     d) Basis of interim consolidated financial statement presentation

     The interim consolidated financial statements include the accounts of the
     company and its controlled subsidiaries. The earnings of the subsidiaries
     are included from the date of acquisition for acquisitions accounted for
     using the purchase method. For subsidiaries accounted for by the pooling of
     interest method their earnings have been included for all periods reported.
     All significant inter-company accounts and transactions have been
     eliminated.

     e) Cash and Cash Equivalents

     Cash and cash equivalents include cash on hand, amounts from and to banks,
     and any other highly liquid investments purchased with a maturity of three
     months or less. The carrying amount approximates fair value because of the
     short maturity of those instruments.

     f) Other Financial Instruments

     The carrying amount of the company's other financial instruments
     approximate fair value because of the short maturity of these instruments
     or the current nature of interest rates borne by these instruments.

     g) Long-Term Financial Instruments

     The fair value of each of the company's long-term financial assets and debt
     instruments is based on the amount of future cash flows associated with
     each instrument discounted using an estimate of what the company's current
     borrowing rate for similar instruments of comparable maturity would be.

     h) Property and Equipment

     Property and equipment are recorded at cost and are amortized over the
     estimated useful lives of the assets principally using the declining
     balance method.

     The company's policy is to record leases, which transfer substantially all
     benefits and risks incidental to ownership of property, as acquisition of
     property and equipment and to record the occurrences of corresponding
     obligations as long-term liabilities. Obligations under capital leases are
     reduced by rental payments net of imputed interest.





                                      F-7
<PAGE>
THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     i) Net Income (Loss) and Fully Diluted Net Income (Loss) Per Weighted
     Average Common Stock

     Net income (Loss) per common stock is computed by dividing net income
     (loss) for the year by the weighted average number of common stock
     outstanding during the year.

     Fully diluted net income (loss) per common stock is computed by dividing
     net income for the year by the weighted average number of common stock
     outstanding during the year, assuming that all convertible preferred stock,
     stock options and warrants as described in note 13 were converted or
     exercised. Stock conversions stock options and warrants which are
     anti-dilutive are not included in the calculation of fully diluted net
     income (loss) per weighted average common stock.

     j) Inventory

     Inventory is valued at the lower of cost and the net realizable value.

     k) Revenue

     1) The company provides the services of engineering staff on a project
     basis. The services provided are defined by guidelines to be accomplished
     by milestone and revenue is recognized upon the accomplishment of the
     relevant milestone. As services are rendered, the costs incurred are
     reflected as Work in Progress. Revenue is recognized upon the persuasive
     evidence of an agreement, delivery has occurred, the fee is fixed or
     determinable and collection reasonably assured.

     2) Prior to the sale of the IT recruitment division (Note 18), the company
     provided

     the services of information technology consultants on a contract basis and
     revenue was recognized as services were performed.

     3) Prior to the sale of the IT recruitment division (Note 18), the company
     placed information technology professionals on a permanent basis and
     revenue was recognized upon candidates' acceptance of employment. If the
     company received non-refundable upfront fees for "retained searches", the
     revenue was recognized upon the candidates' acceptance of employment.

     4) Prior to the sale of the training division (Note 18), the company
     provided advanced training and certification in a variety of technologies
     and revenue was recognized on delivery.

     5) Prior to the sale of the technology division (Note 18), the company
     licensed software in the form of a Human Capital Management System called
     Njoyn. The revenue associated with providing this software consisted of an
     initial set up fee, customization and training as agreed and an ongoing
     monthly per user fee. The allocation of revenue to the various elements was
     based on the company's determination of the fair value of the elements if
     they had been sold separately. The customers had the right to choose a
     provider to host the software which was unrelated to the company. The
     set-up fee and customization revenue was recognized upon delivery of access
     to the software with customization completed in accordance with milestones
     determined by the contract.

     Revenue was recognized on a percentage of completion basis for contracts
     with significant amounts of customization and clearly defined milestones
     agreed to by the customer and an enforceable right to invoice and collect
     on a partial completion basis.

     For contracts which required significant customization, without clearly
     defined milestones, and an inability to estimate costs, revenue was
     reflected on a completed contract basis. Substantial completion was
     determined based on customer acceptance of the software.

     6) Prior to the sale of the technology division (Note 18), the company also
     signed contracts for the customization or development of SecondWave, a web
     development software in accordance with specifications of its clients. The
     project plan defined milestones to be accomplished and the costs
     associated. These amounts were billed as they were accomplished and revenue
     was recognized as the milestones were reached. The work in progress for
     costs incurred beyond the last accomplished milestone was reflected at the
     period end. The contracts did not include any post-contract customer
     support. Additional customer support services were provided at standard
     daily rates, as services are required.






                                      F-8
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     l) Goodwill

     Goodwill representing the cost in excess of the fair value of net assets
     acquired is being amortized on a straight-line basis over a thirty-year
     period. The company calculates the recoverability of goodwill on a
     quarterly basis by reference to estimated undiscounted future cash flows.
     Effective July 1, 2001, the Company changed its amortization period from 30
     to 15 years on a prospective basis.

     In July 2001, the Financial Accounting Standards Board issued Statements of
     Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and
     No. 142, "Goodwill and Other Intangible Assets." Under the new rules,
     goodwill and indefinite lived intangible assets are no longer amortized but
     are reviewed annually for impairment. Separable intangible assets that are
     not deemed to have an indefinite life will continue to be amortized over
     their useful lives. The amortization provisions of SFAS No. 142 apply to
     goodwill and intangible assets acquired after June 30, 2001. With respect
     to goodwill and intangible assets acquired prior to July 1, 2001, the
     Company began applying the new accounting rules effective January 1, 2002.

     Thinkpath completed SFAS No.142 transitional impairment test during the
     third quarter of 2002 and concluded that there was no impairment of
     recorded goodwill, as the fair value of its reporting units exceeded their
     carrying amount as of January 1, 2002. Therefore, the second part of the
     transitional test was not required to be performed.


     m) Income Taxes

     The company accounts for income tax under the provision of Statement of
     Financial Accounting Standards No. 109, which requires recognition of
     deferred tax assets and liabilities for the expected future tax
     consequences of events that have been included in the financial statement
     or tax returns. Deferred income taxes are provided using the liability
     method. Under the liability method, deferred income taxes are recognized
     for all significant temporary differences between the tax and financial
     statement bases of assets and liabilities.

     Effects of changes in enacted tax laws on deferred tax assets and
     liabilities are reflected as adjustments to tax expense in the period of
     enactment. Deferred tax assets may be reduced, if deemed necessary based on
     a judgmental assessment of available evidence, by a valuation allowance for
     the amount of any tax benefits which are more likely, based on current
     circumstances, not expected to be realized.


     n) Foreign Currency

     Assets and liabilities recorded in foreign currencies are translated at the
     exchange rate on the balance sheet date. Translation adjustments resulting
     from this process are charged or credited to other comprehensive income.
     Revenue and expenses are translated at average rates of exchange prevailing
     during the year. Gains and losses on foreign currency transactions are
     included in financial expenses.

     o) Use of Estimates

     The preparation of consolidated financial statements in conformity with
     generally accepted accounting principles in the United States of America
     requires management to make estimates and assumptions that affect certain
     reported amounts of assets and liabilities and disclosures of contingent
     assets and liabilities at the date of the consolidated financial statements
     and the reported amounts of revenues and expenses during the reporting
     period. Actual results could differ from those estimates. These estimates
     are reviewed periodically and as adjustments become necessary, they are
     reported in earnings in the period in which they become known.




                                      F-9
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)




     p) Long-Lived Assets

     On January 1, 1996, the company adopted the provisions of SFAS No. 121,
     Accounting for the Impairment of Long-Lived Assets and for Long-Lived
     Assets to be Disposed Of. SFAS No. 121 requires that long-lived assets be
     held and used by an entity be reviewed for impairment whenever events or
     changes in circumstances indicate that the carrying amount of an asset may
     not be recoverable. Management used its best estimate of the undiscounted
     cash flows to evaluate the carrying amount and have reflected the
     impairment.

     In August 2001, FASB issued SFAS 144, "Accounting for the Impairment or
     Disposal of Long-Lived Assets." SFAS 144 addresses financial accounting and
     reporting for the impairment or disposal of long-lived assets. The Company
     adopted SFAS 144, effective January 1, 2002. The adoption of SFAS 144 did
     not have a material impact on the Company's results of operations or
     financial condition.

     q) Comprehensive Income

     In 1999, the company adopted the provisions of SFAS No. 130 "Reporting
     Comprehensive Income". This standard requires companies to disclose
     comprehensive income in their financial statements. In addition to items
     included in net income, comprehensive income includes items currently
     charged or credited directly to stockholders' equity, such as the changes
     in unrealized appreciation (depreciation) of securities and foreign
     currency translation adjustments.

     r) Accounting for Stock-Based Compensation

     In December 1995, SFAS No. 123, Accounting for Stock-Based Compensation,
     was issued. It introduced the use of a fair value-based method of
     accounting for stock-based compensation. It encourages, but does not
     require, companies to recognize stock-based compensation expenses to
     employees based on the new fair value accounting rules. Companies that
     choose not to adopt the new rules will continue to apply the existing
     accounting rules continued in Accounting Principles Board Option No. 25,
     Accounting for stock issued to employees. However, SFAS No. 123 requires
     companies that choose not to adopt the new fair value accounting rules to
     disclose pro forma net income and earnings per share under the new method.
     SFAS No. 123 is effective for financial statements for fiscal years
     beginning after December 31, 1995. The company has adopted the disclosure
     provisions of SFAS No. 123.

     s) Computer software costs

     Prior to the sale of its wholly-owned subsidiary, Njoyn Software
     Incorporated, the company accounted for the cost of developing computer
     software. The company recorded these costs as research and development
     expenses until the technological feasibility of the product has been
     established at which time the costs are deferred. At the end of each year,
     the company compared the unamortized costs represented by deferred
     development costs in Other Assets to the net realizable value of the
     product to determine if a reduction in carrying value is warranted. The
     software developed for own use which may be sold as a separate product is
     the Njoyn software and during development, the company decided to market
     the software and therefore for the costs incurred after technological
     feasibility was reached has been treated as Deferred Development costs and
     the amount evaluated on an annual basis to determine if a reduction in
     carrying value is warranted. On March 8, 2002, Thinkpath sold all of its
     shares in Njoyn Software Incorporated.

     t) Investments in Non-Related Companies

     The company records its investments in companies in which it holds a 20% or
     more interest and in which the company can exercise significant influence
     over the investee's operating and financial policies on the equity basis.

     The company records its investment in companies in which it holds less than
     20% interest or in which the company has a 20% or greater interest but the
     company is unable to exercise significant influence at fair market value.
     Changes in fair market value are adjusted in comprehensive income, unless
     the impairments are of a permanent nature, in which case the adjustments
     are recorded in earnings.





                                      F-10
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     u) Recent Pronouncements

     In April 2002, the FASB issued SFAS No. 145, which, among other factors,
     changed the presentation of gains and losses on the extinguishments of
     debt. Any gain or loss on extinguishments of debt that does not meet the
     criteria in APB Opinion 30, "Reporting the Results of Operations -
     Reporting the Effects of Disposal of a Segment of a Business, and
     Extraordinary, Unusual and Infrequently Occurring Events and Transactions",
     shall be included in operating earnings and not presented separately as an
     extraordinary item. The new standard is effective for companies with fiscal
     years beginning after May 15, 2002. However, the company has elected to
     adopt the standard as the debt restructuring gain in the current period, as
     permitted by SFAS No. 145.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
     Associated with Exit or Disposal Activities," which addresses accounting
     for restructuring and similar costs. SFAS No.146 supersedes previous
     accounting guidance, principally Emerging Issues Task Force Issue, or EITF,
     No. 94-3 "Liability Recognition for Certain Employee Termination Benefits
     and Other Costs to Exit on Activity (including Certain Costs Incurred in a
     Restructuring)". The company will adopt the provisions of SFAS No. 146 for
     restructuring activities initiated after December 31, 2002. SFAS No. 146
     may affect the timing of recognizing future restructuring costs as well as
     the amounts recognized.

     In January 2003, the FASB issued SFAS No. 148, Accounting for Stock -Based
     Compensation - Transition and Disclosures. This statement provides
     alternative methods of transition for a voluntary change to the fair value
     based method of accounting for stock-based employee compensation. In
     addition, this statement also amends the disclosure requirements of SFAS
     No. 123 to require more prominent and frequent disclosures in the financial
     statements about the effects of stock-based compensation. The transitional
     guidance and annual disclosure provisions of this Statement is effective
     for the December 31, 2002 financial statements. The interim reporting
     disclosure requirements is effective for the March 31, 2003 financial
     statements.

     In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
     Accounting and Disclosure Requirements for Guarantees, Including Indirect
     Guarantees of Indebtedness of Others" ("Interpretation"). This
     Interpretation elaborates on the existing disclosure requirement for most
     guarantees including loan guarantees, and clarifies that at the time a
     company issues a guarantee, the company must recognize an initial liability
     for the fair market value of the obligations it assumes under that
     guarantee and must disclose that information in its interim and annual
     financial statements. The initial recognition and measurement provisions of
     the Interpretation apply on a prospective basis to guarantees issued or
     modified after December 31, 2002.

     In January 2003, the Financial Accounting Standards Board issued
     Interpretation No. 46, "Consolidation of Variable Interest Entities," which
     addresses consolidation by business enterprises of variable interest
     entities. In general, a variable interest entity is a corporation,
     partnership, trust, or any other legal structure used for business purposes
     that either (a) does not have equity investors with voting rights or (b)
     has equity investors that do not provide sufficient financial resources for
     the entity to support its activities. A variable interest entity often
     holds financial assets, including loans or receivables, real estate or
     other property. A variable interest entity may be essentially passive or it
     may engage in research and development or other activities on behalf of
     another company. The objective of Interpretation No. 46 is not to restrict
     the use of variable interest entities but to improve financial reporting by
     companies involved with variable interest entities. Until now, a company
     generally has included another entity in its consolidated financial
     statements only if it controlled the entity through voting interests.
     Interpretation No. 46 changes that by requiring a variable interest entity
     to be consolidated by a company if that company is subject to a majority of
     the risk of loss from the variable interest entity's activities or entitled
     to receive a majority of the entity's residual returns or both. The
     consolidation requirements of Interpretation No. 46 apply immediately to
     variable interest entities created after January 31, 2003. The
     consolidation requirements apply to older entities in the first fiscal year
     or interim period beginning after June 15, 2003. Certain of the disclosure
     requirements apply in all financial statements issued after January 31,
     2003, regardless of when the variable interest entity was established. The
     Company does not have any variable interest entities, and, accordingly,
     adoption is not expected to have a material effect on the Company.





                                      F-11
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     In April 2003, the Financial Accounting Standards Board issued Statement
     No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
     Activities". The Statement amends and clarifies accounting for derivative
     instruments, including certain derivative instruments embedded in other
     contracts, and for hedging activities under Statement 133. The amendments
     set forth in Statement 149 improve financial reporting by requiring that
     contracts with comparable characteristics be accounted for similarly. In
     particular, this Statement clarifies under what circumstances a contract
     with an initial net investment meets the characteristic of a derivative as
     discussed in Statement 133. In addition, it clarifies when a derivative
     contains a financing component that warrants special reporting in the
     statement of cash flows. This Statement is effective for contracts entered
     into or modified after June 30, 2003 with certain exceptions. The Company
     does not believe that the adoption of Statement No. 149 will have a
     material effect on the Company.

     In May 2003, the Financial Accounting Standards Board issued Statement No.
     150, "Accounting for Certain Financial Instruments with Characteristics of
     Both Liabilities and Equity". The Statement specifies that certain
     instruments within its scope embody obligations of the issuer and that,
     therefore, the issuer must classify them as liabilities. This Statement is
     effective immediately for all financial instruments entered into or
     modified after May 31, 2003. For all other instruments, the Statement goes
     into effect at the beginning of the first interim period beginning after
     June 15, 2003. For contracts that were created or modified before May 31,
     2003 and still exist at the beginning of the first interim period beginning
     after June 30, 2003, entities should record the transition to Statement No.
     150 by reporting the cumulative effect of a change in an accounting
     principle. Statement No. 150 prohibits entities from restating financial
     statements for earlier years presented. The Company does not believe that
     the adoption of Statement No. 150 will have a material effect on the
     Company.


     v) Advertising Costs

     Advertising costs are expensed as incurred.




4. ACCOUNTS RECEIVABLE


                                         June 30,    December 31,  December 31,
                                           2003          2002          2001
                                             $             $             $

            Accounts receivable          2,109,007     2,900,616     6,079,676
            Less: Allowance for
            doubtful accounts             (218,177)     (236,793)     (577,563)
                                         ---------     ---------     ---------
                                         1,890,830     2,663,823     5,502,113
                                         =========     =========     =========

                                         June 30,    December 31,   December 31,
                                           2003         2002          2001
                                             $            $             $
           Allowance for doubtful
           accounts
           Balance, beginning
           of period                       236,793       577,563       458,833
           Provision                        19,262      (292,764)      118,730
           Recoveries                      (37,878)      (48,006)           --
                                         ---------     ---------     ---------
           Balance, end of period          218,177       236,793       577,563
                                         =========     =========     =========




                                      F-12
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)

5. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                       June 30,                   December 31,  December 31,
                                                        2003                         2002          2001
                                          ---------------------------------      ----------    ---------
                                                      Accumulated
                                            Cost     Amortization     Net             Net           Net
                                              $           $            $               $
                                          --------    ---------   ---------      ----------    ---------
<S>                                        <C>          <C>         <C>             <C>          <C>
           Furniture and equipment         728,745      494,994     233,751         255,118      344,693
           Computer equipment
                and software             5,732,511    4,468,559   1,263,952       1,593,937    2,322,887
           Leasehold improvements          208,225      145,207      63,018          66,324      191,760
                                         ---------    ---------    ---------      ---------    ---------

                                         6,669,481    5,108,760    1,560,721      1,915,379    2,859,340
                                         =========    =========    =========      =========    =========

           Assets under capital lease      629,699      494,792      134,907        326,365      474,485
                                         =========    =========    =========      =========    =========

</TABLE>
           Amortization of property and equipment for the three months ended
           June 30, 2003 amounted to $197,690 including amortization of assets
           under capital lease of $22,657. ($202,452 for the three months ended
           March 31, 2003 including amortization of assets under capital lease
           of $22,715).

           Amortization of property and equipment for the year ended December
           31, 2002 amounted to $974,142 including amortization of assets under
           capital lease of $110,763.

           Amortization for the year ended December 31, 2001 amounted to
           $1,594,709 and $1,067,029 for the year ended December 31, 2000.
           Amortization includes amortization of assets under capital lease of
           $146,217 for the year ended December 31, 2001 and $136,487 for the
           year ended December 31, 2000.


6. INVESTMENT IN NON-RELATED COMPANIES

       Investment in non-related companies are represented by the following:

                                         June 30,    December 31,   December 31,
                                            2003            2002           2001

                     Conexys            $      1       $       1       $667,511
                     Digital Cement       45,668          45,668        346,415
                     Lifelogix                --              --             --
                                        --------      ----------     ----------
                     Total              $ 45,669       $  45,669     $1,013,926
                                        ========      ==========     ==========

     i) Conexys

     During the year ended December 31, 1999, $383,146 of the Conexys investment
     was included as a short-term investment as the company had intended to sell
     these shares on the open market. During fiscal 2000, the company acquired
     additional shares of Conexys at a cost of approximately $284,365 in
     consideration of services rendered and reclassified the total investment as
     available for sale.

     Effective February 26, 2003, the common shares of Conexys were temporarily
     suspended from trading on the Bermuda Stock Exchange as it does not have
     adequate sources of funding for its immediate operating requirements and is
     currently investigating various options to retain and maximize shareholder
     value including the restructuring of its debt and refinancing of the
     company.

     At December 31, 2002, the company wrote down its investment by $667,510 to
     a carrying value of $1. The write down was considered a permanent decline
     in value and as such was recorded as a charge to operations.

     ii) Digital Cement

     During fiscal 2000, the company acquired 1,125,000 shares of Digital
     Cement, representing approximately 4% of that company's shares in
     consideration of the co-licensing of SecondWave, software developed by
     TidalBeach Inc., a wholly-owned subsidiary of Thinkpath Inc. The value of
     these shares was determined to be approximately $507,865 based on a offer
     to a third party to purchase shares in the company at a price of $0.50 per
     share. During 2001, the fair value was adjusted to $346,415 with a charge
     of $161,450 to comprehensive income. During 2002, the fair value was
     adjusted to $45,668 with a charge of $300,747 to comprehensive income.




                                      F-13
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)

     iii) Lifelogix

     During 2000, the company acquired a twenty percent interest in LifeLogix in
     consideration of the source code for Secondwave, the software which
     supports LifeLogix's human stress and emotions management systems. The
     value of these shares is approximately $142,715. This investment has been
     accounted for on the cost basis as the company does not have the ability to
     exercise significant influence over LifeLogix as the majority ownership of
     the investee is concentrated among a small group of shareholders who
     operate Lifelogix without regard to the views of the company and the
     company has been unable to obtain quarterly information. This investment
     was written off in 2001.

     iv) Tillyard Management

     During the year ended December 31, 2001, the company acquired an interest
     of $130,242 in Tillyard Management Inc., a property management company, in
     consideration of a real estate management software system developed by
     Thinkpath Inc. This investment has been accounted for using the cost
     method. Tillyard was formed to utilize and market the real estate
     management software. The value of the investment was established based upon
     the capitalization for the investee and our share of that capitalization.
     As sufficient funding and interest was not forthcoming, the operations of
     Tillyard were abandoned and the Company wrote down its investment at
     December 31, 2001.




7. GOODWILL

     Goodwill is the excess of cost over the value of assets acquired over
     liabilities assumed in the purchase of the subsidiaries. Goodwill has been
     allocated to reporting units as follows:
<TABLE>
<CAPTION>
                                                   JUNE 30,                 DECEMBER 31, DECEMBER 31,
                                                     2003                        2002         2001
                                     --------------------------------------   ----------   ----------
                                             ACCUMULATED   IMPAIRMENT
                                       COST  AMORTIZATION   LOSSES      NET      NET         NET
                                        $         $           $           $        $           $
                                     ----------------------------------------------------------------

<S>                                   <C>        <C>       <C>     <C>           <C>       <C>
           IT Recruitment             448,634    303,337   145,297         --         --    145,297
             (Systemsearch
              Consulting Services)

           Technical Publications
              & Engineering         5,518,858    535,164 1,234,962  3,748,732  3,748,732  4,983,694
             (CadCam Inc.)
                                   ---------- ---------- --------- ----------  ---------  ---------
                                    5,967,492    838,501 1,380,259  3,748,732  3,748,732  5,128,991
                                   ========== ========== ========= ==========  =========  =========
</TABLE>


     Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and
     Other Intangible Assets. This statement requires the Company to evaluate
     the carrying value of goodwill and intangible assets based on assumptions
     and estimates of fair value and future cash flow information. These
     assumptions reflect management's best estimates and may differ from actual
     results. If different assumptions and estimates are used, carrying values
     could be adversely impacted, resulting in write downs that could adversely
     affect the Company's earnings.

     During the third quarter of 2002, the company completed its transitional
     goodwill impairment test as of January 1, 2002 and determined that no
     adjustment to the carrying value of goodwill was needed.

     The IT recruitment unit was tested for impairment in the third quarter,
     after the annual forecasting process. Due to a decrease in margins and the
     loss of key sales personnel, operating profits and cash flows were lower
     than expected in the first nine months of 2002. Based on that trend, the
     earnings forecast for the next two years was revised. At September 30,
     2002, a goodwill impairment loss of $57,808 was recognized in the IT
     recruitment reporting unit. The fair value of that reporting unit was
     estimated using the expected present value of future cash flows.

     During the fourth quarter, the IT recruitment unit experienced further
     decline, indicating impairment. The fair value of the unit was estimated
     using the expected present value of future cash flows. At December 31,
     2002, a further goodwill impairment loss of $87,489 was recognized.





                                      F-14
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     The Technical Publications and Engineering unit was tested for impairment
     in the fourth quarter, as operating profits, cash flows and forecasts were
     lower than expected. At December 31, 2002, a goodwill impairment loss of
     $1,234,962 was recognized. The fair value of that reporting unit was
     estimated using the expected present value of future cash flows.

     On an ongoing basis, absent any impairment indicators, the company expects
     to perform a goodwill impairment test as of the end of the third quarter of
     every year.

     The following table presents the impact of adopting SFAS No. 142 on net
     loss and net loss per share had the standard been in effect for the year
     ended December 31, 2001.

<TABLE>
<CAPTION>
                                                                                       2001
           <S>                                                                       <C>
           Reported loss from continuing operations                                 (8,559,402)

           Adjustments:
             Amortization of goodwill                                                  454,908
                                                                                     ---------

           Adjusted loss from continuing operations                                 (8,104,494)
                                                                                     =========

           Reported loss from continuing operations, before preferred dividends,
           (0.57) basic and fully diluted loss per common share

           Impact of amortization of goodwill                                             0.03
                                                                                         -----
           Adjusted loss from continuing operations, before preferred
           dividends, basis and fully diluted loss per common share                      (0.54)
                                                                                         =====


           Reported loss from continuing operations after preferred dividends       (9,288,142)

           Adjustments:
             Amortization of goodwill                                                  454,908
                                                                                      --------
           Adjusted loss from continuing operations after preferred dividends       (8,833,234)
                                                                                     =========
           Reported loss from continuing operations, after preferred dividends,
           basic and fully diluted loss per common share (0.62)

           Impact of amortization of goodwill                                             0.03
                                                                                         -----
           Adjusted loss from continuing operations, after preferred                     (0.59)
           dividends, basis and fully diluted loss per common share                      =====

</TABLE>

     Amortization for the year ended December 31, 2001 was $454,908. Effective
     July 1, 2001, the Company changed its amortization period from 30 to 15
     years on a prospective basis. The goodwill amortization and any impairment
     write down reported in 2001 relate to continuing operations.

     In accordance with the requirements of SFAS 121 and SFAS 142, the
     impairment of goodwill has resulted in the writedown of the following
     amounts;

                                                          2002              2001
                                                      --------         ---------
     Systemsearch Consulting Services                  145,297           238,673
     CadCam Inc.                                     1,234,962                --
     MicroTech Professionals Inc.                           --         2,762,718
     International Career Specialists                       --                --
     E-Wink Inc.                                            --                --
                                                     ---------        ----------
                                                     1,380,259         3,001,391
                                                     =========        ==========


     Systemsearch Consulting Services Inc., MicroTech Professionals Inc.,
     International Career Specialists and E-Wink Inc. are inactive companies.





                                      F-15
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


8. OTHER ASSETS
<TABLE>
<CAPTION>
                                                        June 30,   December 31,   December 31,
                                                           2003           2002           2001
                                                              $              $              $

             <S>                                        <C>        <C>             <C>
             Deferred development cost                       --             --        993,765
             Deferred financing costs                        --             --             --
             Deferred contracts                              --             --        250,000
             Cash surrender value of life insurance      51,982         49,303         43,945
                                                       --------      ---------      ---------
                                                         51,982         49,303      1,287,710
                                                       ========      =========      =========
</TABLE>

     Amortization of other assets for the year ended December 31, 2002 amounted
     to $317,886. Amortization for the year ended December 31, 2001 amounted to
     $510,038.

9. BANK INDEBTEDNESS

i) June 30, 2003

     At June 30, 2003, the company had $1,210,000 outstanding with Morrison
     Financial Services Limited under a receivable discount facility which
     allows the company to borrow up to 75% of the value of qualified accounts
     receivables.

ii) December 31, 2002

     On December 5, 2002, Bank One's security and indebtedness were purchased by
     Morrison Financial Services Limited. Bank One accepted a $1,100,000
     discount on the payoff of its debt. On July 1, 2002 the company entered
     into a Forbearance and Modification Agreement with Bank One which was
     subsequently amended on August 1, 2002, August 15, 2002, September 1, 2002,
     September 16, 2002, September 30, 2002, October 15, 2002, November 15,
     2002, and November 30, 2002. Under the terms of the agreement, the Bank was
     entitled to forbearance fees and payment of related legal fees and
     expenses. The Bank charged the company approximately $250,000 in
     forbearance fees and $18,000 in legal fees.

     Morrison Financial Services Limited charged the company a 15% fee or
     $165,000 for the discount negotiation with Bank One. The discount amount of
     $1,100,000 was recognized by the company as debt forgiveness and the fee of
     $165,000 was netted against this amount for total debt forgiveness of
     $935,000.

iii) December 31, 2001

     At December 31, 2001, the Company had $4,870,000 outstanding with Bank One.
     The revolving line of credit provided for a maximum borrowing amount of
     $4,760,000 at variable interest rates based on eligible accounts
     receivable. At December 31, 2001, the Company had an overdraft of $110,000.
     The Company did not have an authorized overdraft facility with Bank One,
     however the bank allowed an overdraft of up to $500,000 on a regular basis
     for approximately ten weeks. At December 31, 2001 and thereafter, the
     Company was not in compliance with the covenants contained in the revolving
     line of credit agreement.

     As a result of the default on the loan covenants governing the company's
     credit line facility, Bank One restricted the company's repayment of
     certain subordinated loans and notes payable which affected payments to the
     Business Development Bank of Canada, Roger Walters and Denise Dunne-Fushi.





                                      F-16
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


10. CONVERTIBLE DEBENTURE

     Pursuant to a share purchase agreement dated December 5, 2002, the Company
     entered into an agreement (the "12% Senior Secured Convertible Debenture
     Agreement"), with a syndicate of investors for debentures of up to
     $3,000,000. The first debenture of $800,000 was purchased together with
     50,285,714 warrants on closing. The debenture will become due twelve months
     from the date of issuance. The investors will have the right to acquire up
     to $800,000 worth of the Company's common stock at a price the lesser of
     $.0175 or 50% of the average of the three lowest prices on three separate
     trading days during the sixty-day trading period prior to conversion. The
     warrants are exercisable at any time and in any amount until December 5,
     2009 at a purchase price of $.0175 per share. The Company is required to
     pay interest to the debenture holder on the aggregate unconverted and
     outstanding principal amount of the debenture at the rate of 12% per annum,
     payable on each conversion date and maturity date in cash or shares of
     common stock. On July 22, 2003, 12,571,428 of these warrants were repriced
     from $.0175 to $.00137 per share.

     On December 18, 2002, the Company entered into a share purchase agreement
     with Tazbaz Holdings Limited for the issuance and sale by the Company of a
     $100,000 principal amount Convertible Debenture and 5,625,000 warrants to
     purchase shares of the Company's common stock. The debenture will become
     due twelve months from the date of issuance. Tazbaz Holdings Limited will
     have the right to acquire up to $100,000 worth of our common stock at a
     price the lesser of $.0175 or 50% of the average of the three lowest prices
     on three separate trading days during the sixty-day trading period prior to
     conversion. The warrants are exercisable at any time and in any amount
     until December 18, 2009 at a purchase price of $.0175 per share. The
     Company is required to pay interest to Tazbaz Holdings Limited on the
     aggregate unconverted and outstanding principal amount of the debenture at
     the rate of 12% per annum, payable on each conversion date and maturity
     date in cash or shares of common stock.

     The proceeds of $900,000 received by the company were allocated between the
     warrants and the debenture without warrants on a pro rata basis. Paid in
     capital has been credited by the value of the warrants in the amount of
     $707,050. The value of the beneficial conversion feature was determined to
     be $2,898,328 which was credited to paid in capital and charged to earnings
     as interest expense in 2002.

     During the three months ended March 31, 2003, the company sold an
     additional $875,000 in convertible debentures along with 84,285,714
     warrants. The debenture will become due twelve months from the date of
     issuance. The investors will have the right to acquire up to $875,000 worth
     of the Company's common stock at a price the lesser of $.0175 or 50% of the
     average of the three lowest prices on three separate trading days during
     the sixty-day trading period prior to conversion. The warrants are
     exercisable at any time and in any amount for a period of seven years from
     closing at a purchase price of $.0175 per share. The Company is required to
     pay interest to the debenture holder on the aggregate unconverted and
     outstanding principal amount of the debenture at the rate of 12% per annum,
     payable on each conversion date and maturity date in cash or shares of
     common stock. On June 30, 2003, 45,714,286 of these warrants were repriced
     from $.0175 to $.00875 per share. On July 22, 2003, 22,857,143 of these
     warrants were repriced from $.0175 to $.00137 per share.

     The proceeds of $875,000 received by the company were allocated between the
     warrants and the debenture without warrants on a pro rata basis. Paid in
     capital has been credited by the value of the warrants in the amount of
     $446,285.

     At March 31, 2003, the value of the beneficial conversion feature on all
     issued convertible debentures was determined to be $3,935,684 which was
     credited to paid in capital and charged to earnings as interest expense.

     During the three months ended June 30, 2003, the company sold an additional
     $575,000 in convertible debentures along with 109,777,942 warrants. The
     debenture will become due twelve months from the date of issuance. The
     investors will have the right to acquire up to $575,000 worth of the
     Company's common stock at a price the lesser of $.0175 or 50% of the
     average of the three lowest prices on three separate trading days during
     the sixty-day trading period prior to conversion. The warrants are
     exercisable at any time and in any amount for a period of seven years from
     closing at purchase prices ranging from $.0175 to $.00137 per share. The
     Company is required to pay interest to the debenture holder on the
     aggregate unconverted and outstanding principal amount of the debenture at
     the rate of 12% per annum, payable on each conversion date and maturity
     date in cash or shares of common stock.






                                      F-17
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     The proceeds of $575,000 received by the company were allocated between the
     warrants and the debenture without warrants on a pro rata basis. Paid in
     capital has been credited by the value of the warrants in the amount of
     $321,167.

     At June 30, 2003, the value of the beneficial conversion feature on all
     issued convertible debentures was determined to be $539,142 which was
     credited to paid in capital and charged to earnings as interest expense.

11. LONG-TERM DEBT

i) June 30, 2003

     At June 30, 2003, the Company had a loan balance of $37,878 with the
     Business Development Bank of Canada. The loan was assigned to the Company
     when it combined with TidalBeach Inc. in November 2000. The loan is secured
     by a general security agreement with monthly payments of $950.00 and bears
     interest at 12.5%. No payments have been made since January 2003.

     At June 30, 2003, the company had a loan balance of $259,356 with Terry
     Lyons and no principal payments have been made.


ii) December 31, 2002

     At December 31, 2002, the Company had a loan balance of $31,397 with the
     Business Development Bank of Canada. The loan was assigned to the Company
     when it combined with TidalBeach Inc. in November 2000. The loan is secured
     by a general security agreement with monthly payments of $950.00 and bears
     interest at 12.5%.

     On December 5, 2002, Morrison Financial Services Limited purchased
     additional debt belonging to the Business Development Bank of Canada of
     approximately $440,000 in consideration of $100,000.

     Morrison Financial Services Limited charged the company a 15% fee or
     $45,000 for the discount negotiation with the Business Development Bank of
     Canada. The discount amount of $341,467 was recognized by the company as
     debt forgiveness and the fee of $45,000 was netted against this amount for
     total debt forgiveness of $296,467.

     In May 2002, the company secured a loan of $259,356 from an individual,
     Terry Lyons which was secured by the company's IRS refund. The company paid
     a placement fee of 10% to Mr. Lyons. Although the company received its IRS
     refund in July 2002, Mr. Lyons agreed to an extension of the loan until
     October 31, 2003. The loan is payable in twelve monthly payments of $21,613
     beginning November 30, 2002 and bears interest at 30% per annum. This loan
     is subordinated to Morrison Financial Services Limited and no principal
     payments have been made.


iii) December 31, 2001

     At December 31, 2001, the Company had $419,079 in subordinated debt
     outstanding to the Business Development Bank of Canada. At December 31,
     2001 and thereafter, the Company was not in compliance with the covenant
     contained in the loan agreements. The Business Development Bank of Canada
     agreed to postpone principal repayment of its subordinated loans until
     March 2002.





                                      F-18
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)
<TABLE>
<CAPTION>

                                                                                     June 30,  December 31, December 31,
                                                                                      2003        2002         2001
                                                                                        $           $           $
                                                                                   ---------   ---------    ---------
   a) Included therein:
           <S>                                                                    <C>          <C>         <C>
           A loan with Business Development Bank of Canada ("BDC") secured by a
           general security agreement at the bank's floating base rate plus a
           variance of 6% per year on the principal outstanding. At June 30,
           2003, the bank's floating base rate was 7%                                 37,878       31,397      419,079

           A loan with T. Lyons payable in monthly
           payments of $21,613 which were to begin November 30, 2002                 259,356      259,356         --
           and bearing interest at 30% per annum. This loan is subordinated to
           Morrison Financial Services Limited and no principal payments have
           been made

           A loan with Bank One payable in 19 remaining monthly payments of
           $13,889 plus interest based on prime
           This loan was paid in full on March 31, 2002                                 --           --        263,889

           Various capital leases with various payment terms and
           interest rates                                                             98,835      174,191      427,749
                                                                                  ----------   ----------   ----------
                                                                                     396,069      464,944    1,110,717
           Less: current portion                                                     339,642      380,188      528,285
                                                                                  ----------   ----------   ----------
                                                                                  $   56,427   $   84,756   $  582,432
                                                                                  ==========   ==========   ==========
</TABLE>

     b) Future principal payments obligations as at June 30, 2003, were as
follows:

                2003                        241,345
                2004                        143,584
                2005                         11,140
                2006                             --
                2007                             --
                                          ----------
                                             396,069
                                          ==========


     c) Interest expense related to long-term debt was $33,499 for the three
     months ended June 30, 2003 ($30,019 for the three months ended March 31,
     2003). Interest expense related to long-term debt was $138,240 for the year
     ended December 31, 2002 ($99,651 in 2001).

12. NOTES PAYABLE

     a) On August 1, 2002, the company restructured its note payable to Roger
     Walters, reducing the principal from $675,000 to $240,000 in consideration
     of the issuance of 1,000,000 shares of its common stock. The company agreed
     to issue and register the shares upon obtaining shareholder approval of an
     amendment to its Articles of Incorporation increasing its authorized
     capital stock. Principal payments of $4,000 will be made monthly and
     started September 1, 2002 until August 1, 2007. This loan is non-interest
     bearing.

     Also as part of the restructuring, the company agreed to price protection
     on the 1,756,655 shares that were issued to Mr. Walters in January 2002. In
     the event that the bid price is less than $.27 per share when Mr. Walters
     seeks to sell his shares in an open market transaction, the Company will be
     obligated to issue additional shares of unregistered common stock with a
     value equal to the difference between $.27 per share and the closing bid
     price to a floor of $.14 per share.





                                      F-19
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     The company has accounted for its modification in the terms of its notes
     payable as troubled debt restructuring. Accordingly, the company has
     recognized a gain on the restructuring of the old debt based upon the
     difference between the total carrying value of the original debt (with any
     accrued interest) and the total future cash flows of the restructured debt.
     The gain on the restructured debt, included in expenses in the consolidated
     statement of operations is as follows:


           Old debt
              Principal balance                                   $ 675,000
              Accrued interest                                            -
                                                                  ---------
              Carrying value                                        675,000

              Common stock issued (2,631,185 shares at $0.0942)    (247,858)
              Principle balance of new debt                        (240,000)
              Interest (payable through maturity)                         -
                                                                  ---------
              Gain on restructured debt                           $ 187,142
                                                                  =========

     All future cash payments under the modified terms will be accounted for as
     reductions of note payable and no interest expense will be recognized for
     any period between the closing date and the maturity date.

     The loan is subordinated to Morrison Financial Services Limited and the 12%
     Senior Secured Convertible Debenture holders. The company has not made any
     principal payments to Mr. Walters since December 2002 and is currently in
     default of the loan agreement. In the event that the company defaults on
     payment, the principal balance will bear interest at 12% per annum until
     payment is made.


     b) On August 1, 2002, the company restructured its note payable to Denise
     Dunne-Fushi, reducing the principal from $1,740,536 to $600,000 in
     consideration of the issuance of 4,000,000 shares of its common stock. In
     addition a prior debt conversion of $225,000 that was to be paid in capital
     was forgiven. The company agreed to issue and register the shares upon
     obtaining shareholder approval of an amendment to its Articles of
     Incorporation increasing its authorized capital stock. Principal payments
     of $10,000 per month will begin November 1, 2002 bearing 5% interest until
     October 1, 2007. In addition, the company agreed to cover the monthly
     expense associated with Ms. Dunne-Fushi's family health benefits until May
     2004 and vehicle lease until August 2004.

     The company has accounted for its modification in the terms of its notes
     payable as troubled debt restructuring. Accordingly, the company has
     recognized a gain on the restructuring of the old debt based upon the
     difference between the total carrying value of the original debt (with any
     accrued interest) and the total future cash flows of the restructured debt.
     The gain on the restructured debt, included in expenses in the consolidated
     statement of operations is as follows:

           Old debt
              Principal balance                                 $1,740,536
              Accrued interest                                           -
              Capital stock payable                                225,000
                                                                 ---------
              Carrying value                                     1,965,536

              Common stock issued (4,000,000 shares at $0.0942)   (376,800)
              Principle balance of new debt                       (600,000)
              Interest, insurance and vehicle lease costs          (98,987)
                                                                 ---------
              Gain on restructured debt                          $ 889,749
                                                                 =========


                                      F-20
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)



     All future cash payments under the modified terms will be accounted for as
     reductions of note payable and no interest, insurance or vehicle expense
     will be recognized for any period between the closing date and the maturity
     date.

     The loan is secured under a general security agreement but is subordinated
     to Morrison Financial Services Limited and the 12% Senior Secured
     Convertible Debenture holders. The company has not made any principal
     payments to Ms. Dunne-Fushi since December 2002 and is currently in default
     of the loan agreement. In the event of default, Ms. Dunne-Fushi has the
     option of enforcing the security she holds.

                                        June 30,   December 31,    December 31,
                                          2003           2002            2001
                                             $              $               $

     Note Payable to Roger Walters     224,000        224,000         750,000
     Note Payable to Denise Dunne      663,818        670,957       1,740,000
                                     ---------      ---------      ----------
                                       887,818        894,957       2,490,000
     Less: current portion             206,045        208,254         150,000
                                     ---------      ---------      ----------
                                      $681,773       $686,703      $2,340,000
                                     =========      =========      ==========

     c) Capital repayments as at June 30, 2003


                 2003                 205,253
                 2004                 193,911
                 2005                 182,250
                 2006                 176,250
                 2007                 130,154
                                   ----------
                                    $ 887,818
                                   ==========


     13. CAPITAL STOCK

       a)  Authorized

          800,000,000   Common stock, no par value (100,000,000 at
                        December 31, 2002)
            1,000,000   Preferred stock, issuable in series, rights to be
                        determined by the Board of Directors

      b)  Issued

     On June 8, 1999, the company was successful in its Initial Public Offering.
     1,100,000 common stock were issued at an issuance price of $5.00 per share.
     Net proceeds received, after all costs, was $3,442,683. The company trades
     on the OTC:BB under the trading symbol "THTH-F". As part of the Initial
     Public Offering, the underwriters exercised the over- allotment, resulting
     in 107,000 common stock being issued for net proceeds of $465,000. Deferred
     costs of $1,351,365, which were incurred as part of the completion of the
     Initial Public Offering, have been applied against the proceeds raised by
     the offering, and are included in the net proceeds.

     On June 30, 1999, 163,767 common stock were issued in conjunction with the
     acquisition of Cad Cam Inc., with a carrying value of $500,000.

     During 2000, the company effected two acquisitions accounted for as pooling
     of interest and therefore the capital stock of the company outstanding at
     January 1, 1999 and December 31, 1999 have been restated to reflect the
     aggregate capital stock and shareholder equity amounts as follows:

                                                           #            $
          Original Balance as of December 31, 1998      1,717,875    1,448,368
          Issuance of Shares for pooling of interest      777,260      344,576
                                                        ---------    ---------
          Revised Balance as of December 31, 1998       2,495,135    1,792,944
                                                        =========    =========





                                      F-21
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     As part of the acquisition of ObjectArts Inc., the company issued 196,800
     common shares for a total consideration of $837,151 on the conversion of
     debt to common shares.

     On April 25, 2000, 133,333 common stock were issued for the purchase of
     MicroTech Professionals Inc., for a total consideration of $500,000.

     During 2000, 300,000 common stock were issued as partial consideration for
     the purchase of shares of E-Wink Inc. for a value of $975,000.

     On August 22, 2000, 1,063,851 shares of common stock and 560,627 warrants
     were issued in a private placement for net proceeds of $2,333,715 (gross
     proceeds of $2,681,600).

     During 2000, 3,533,111 common stock were issued for services rendered
     totaling $3,160,288. An amount of $110,000 has been included in the
     acquisition of MicroTech and the balance of $3,050,288 has been included in
     financing expenses as of December 31, 2000. The shares were valued at the
     date of issue based upon the trading price.

     During 2000, 1,694,343 common stock were issued on the conversion of
     Preferred Stock.

     The company has issued 1,800,000 common shares of the company in
     consideration of services rendered related to the acquisition of various
     subsidiaries. These shares are included in common stock issued in
     consideration of services in the amount of $1,125,000 and have been
     included in Acquisition costs and financing expenses for December 31, 2000.

     On September 13, 2000, Thinkpath Inc. entered into an agreement with
     Burlington Capital Markets Inc. to aid the company in further acquisitions.
     The agreement with Burlington Capital Markets Inc. (Burlington) provided
     for the issuance of 250,000 shares of our common stock at a cash purchase
     price of $.01 per share upon signing of the agreement. We further agreed to
     issue 250,000 at a cash price of $.01 per share upon the successful
     completion of the Company's first acquisition initiated through Burlington.
     We further agreed to issue warrants to purchase an aggregate of 400,000
     shares of our common stock according to the following schedule: (i) 100,000
     shares at an exercise price of $5.00 per share, exercisable at any time
     after October 13, 2000; (ii) 100,000 shares at an exercise price of $7.00
     per share, exercisable at any time after November 13, 2000; (iii) 100,000
     shares at an exercise price of $9.00 per share, exercisable at any time
     after December 13, 2000, and (iv) 100,000 shares at an exercise price of
     $11.00 per share, exercisable at any time after February 13, 2001. Such
     warrants were exercisable in whole or in part 5 years from the respective
     vesting date and contained a cashless exercise provision and registration
     rights.

     Compensation was to be paid to Burlington at a monthly fee of $10,000 for
     the term of the agreement with a minimum notice period for termination of
     six months. Through Burlington, the company began to pursue the acquisition
     of Aquila Holdings Limited and a letter of intent was signed on October 4,
     2000. The company and Aquila subsequently agreed to postpone the
     transaction. The agreement with Burlington was subsequently terminated and
     no warrants were issued. In the aggregate, Burlington received 425,000
     shares of our common stock and $10,000 pursuant to the agreement. The
     additional 175,000 shares constituted compensation to Burlington Capital
     Markets Inc. as a settlement on the termination of the agreement for their
     entitlement to the monthly fees and the arrival at a letter of intent for
     the acquisition of Aquila. The difference between the fair market value of
     the shares and the purchase price of $.01 represents the value agreed
     between the Company and Burlington for its acquisition services. The total
     of 425,000 common shares has been reflected as issued for an aggregate cost
     of $717,250 based on the stock price at the date of the performance was
     complete. This amount has been expensed in the year ended December 31, 2000
     and is included in financing expenses.

     During January 2001, the Company agreed to issue 250,000 warrants to
     acquire shares of the company at $1.50 and to re-price a total of 330,693
     options to an exercise price of $1.00. In consideration of the foregoing, a
     total of 275,000 shares were issued for an amount of $275,000 in cash. The
     terms of the warrants are indicated in note 13(e). The value of the
     repricing of the warrants and the new warrants issued have been treated as
     the part of the allocation of the proceeds on the issuance of the common
     stock.

     On June 6, 2001, the Company amended its Articles of Incorporation to
     increase its authorized common stock from 15,000,000 to 30,000,000.

     During the year December 31, 2001, the Company issued 400,000 shares of its
     common stock in consideration of $203,000 in cash.






                                      F-22
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     During the year ended December 31, 2001, the Company issued 30,632 shares
     of its common stock in consideration of legal services, 300,000 shares of
     its common stock in consideration of investment banking services, 596,667
     shares to reduce common stock payable of $709,005, and 93,883 shares in
     settlement of accounts payable. The shares were valued at the date of issue
     based upon the trading price.

     On May 24, 2002, the company entered into a loan agreement with Tazbaz
     Holdings Inc., an Ontario Corporation. Pursuant to the agreement, Tazbaz
     securitized an overdraft position of the company with Bank One in the
     amount of $650,000 in consideration of an aggregate of 3,221,126 shares of
     its common stock.

     On June 24, 2002, the company entered into consulting agreements with each
     of Mark Young and George Georgiou pursuant to which Messrs. Young and
     Georgiou shall perform consulting services with respect to corporate and
     debt restructuring. In consideration for such services the company issued
     2,250,000 and 1,000,000 shares of its common stock to Messrs. Young and
     Georgiou, respectively. Pursuant to the agreement the company registered
     such shares of common stock under an S-8 registration statement. The shares
     were valued at the date of issue based upon the trading price.

     On October 1, 2002, the company entered into consulting agreements with a
     group of seven consultants with expertise in restructuring, financing,
     legal and management services for one-year terms to assist the company with
     its restructuring and refinancing efforts. In consideration for such
     services the Company issued warrants to purchase 10,600,000 shares of our
     common stock at an exercise price of $0.025 per share.

     On October 4, 2002, the company's securities were delisted from The Nasdaq
     SmallCap Market, for failure to comply with the minimum bid price or net
     tangible assets requirements for continued listing, as set forth in
     Nasdaq's Marketplace Rule 4310(c)(4). The company also failed to meet the
     initial inclusion requirements under Nasdaq's Marketplace Rule
     4310(c)(2)(A) including minimum stockholders' equity of $5 million, market
     capitalization of $50 million or net income of $750,000 (excluding
     extraordinary or non-recurring items) in the most recently completed fiscal
     year or in two of the last three most recently completed fiscal years.

     On October 16, 2002, the Company amended its Articles of Incorporation to
     increase its authorized common stock from 30,000,000 to 100,000,000.

     During the year ended December 31, 2002, the Company issued 588,235 shares
     of its common stock as payment of an executive bonus in the amount of
     $100,000, 8,387,840 shares to reduce common stock payable of $1,098,955,
     and 2,393,783 shares in settlement of various accounts payable and
     liabilities in the amount of $334,348.

     During the year ended December 31, 2002, the company issued both shares of
     its common stock and warrants as payment for a variety of services:
     1,230,000 shares in consideration of investor relations and marketing
     services in the amount of $79,000; 1,651,495 shares and warrants in
     consideration of finance services in the amount of $719,664; 546,531 shares
     in consideration of restructuring services in the amount of $45,321;
     3,250,000 shares pursuant to the June 24, 2002 consulting agreements with
     Mr. Young and Mr. Georgiou in the amount of $520,000; and 7,200,000 shares
     on the exercise of warrants pursuant to the October 1, 2002 consulting
     agreements in the amount of $192,500. The shares were valued at the date of
     issue based upon the trading price.

     On January 24, 2003, the company amended its Articles of Incorporation to
     increase its authorized common stock from 100,000,000 to 800,000,000.

     On January 28, 2003, the company registered an aggregate of 12,427,535
     shares of common stock, no par value per share, issued to Declan A. French,
     the company's Chief Executive Officer, pursuant to an amendment to his
     employment agreement.

     On February 7, 2003, the company entered into a consulting agreement with
     Rainery Barba, who shall perform legal and advisory services for a period
     of one year. In consideration for such services the company registered an
     aggregate of 4,000,000 shares of common stock, no par value per share.

     On February 7, 2003, the company entered into a consulting agreement with
     Dailyfinancial.com Inc. who shall perform corporate consulting services in
     connection with mergers and acquisitions, corporate finance and other
     financial services. In consideration for such services the company issued
     4,200,000 shares of common stock, no par value per share.




                                      F-23
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     During the three months ended March 31, 2003, the company issued 3,502,695
     shares of its common stock in settlement of various accounts payable and
     liabilities in the amount of $80,147.

     During the three months ended March 31, 2003, the company issued both
     shares of its common stock and warrants as payment for a variety of
     services: 2,280,000 shares and warrants in consideration of finance
     services in the amount of $57,000; 4,000,000 shares in consideration of
     legal services pursuant to the February 7, 2003, agreement with Rainery
     Barba; 4,200,000 shares in consideration of financial services pursuant to
     the February 7, 2003 agreement with Dailyfinancial.com Inc.; 500,000 shares
     in consideration of financial services.

     During the three months ended March 31, 2003, the company issued 37,966,363
     shares of its common stock upon the conversion of 12% Senior Secured
     Convertible Debentures in the amount of $61,012.

     During the three months ended June 30, 2003, the company issued 1,067,624
     shares of its common stock in settlement of various accounts payable and
     liabilities in the amount of $8,434.

     During the three months ended June 30, 2003, the company issued 189,912,747
     shares of its common stock upon the conversion of 12% Senior Secured
     Convertible Debentures in the amount of $376,900.


     c) Liabilities payable in common stock

     During the year ended December 31, 2001, the company issued 316,667 shares
     to reduce a note payable of $625,000 to Denise Dunne related to the
     purchase of MicroTech Professionals Inc. The company also issued 280,000
     shares in relation to a settlement with an Njoyn employee. The balance at
     December 31, 2001, represents $474,297 to Roger Walters in settlement of a
     note payable, and $225,000 to Denise Dunne also in settlement of a note
     payable.

     During the year ended December 31, 2002, the company issued 4,387,840
     shares of its common stock to reduce a note payable of $909,297 to Roger
     Walters related to the purchase of CadCam Inc.

     During the year ended December 31, 2002, the company issued 4,000,000
     shares of its common stock to reduce a note payable of $1,140,536 to Denise
     Dunne related to the purchase of MicroTech Professionals Inc.


     d) Preferred Stock

     On December 30, 1999, 15,000 shares of series A, 8% cumulative,
     convertible, preferred stock, no par value were issued in a private
     placement for gross proceeds of $1,500,000. The preferred stock were
     convertible into common stock at the option of the holders under certain
     conditions, at any time after the effective date of the registration
     statement. The conversion price was based on the trading price at December
     30, 1999 or 80% of the average of the ten trading days immediately
     preceding the conversion of the respective shares of Series A, preferred
     stock. The stockholders of the Series A, 8% cumulative, convertible stock
     were entitled to receive preferential cumulative quarterly dividends in
     cash or shares at a rate of 8% simple interest per annum on the stated
     value per share. The intrinsic value of the conversion price at date of
     issue was reflected as a dividend of $138,000.

     At any time after the effective date of the registration statement,
     Thinkpath Inc. had the option to redeem any or all of the shares of Series
     A, 8% cumulative, convertible, preferred stock by paying to the holders a
     sum of money equal to 135% of the stated value of the aggregate of the
     shares being redeemed if the conversion price was less than $2.00.

     Thinkpath Inc. held the option to cause the investors in the December 30,
     1999 placement offering to purchase an additional $500,000 worth of Series
     A, 8% cumulative, convertible, preferred stock upon the same terms as
     described above. This right was exercised in July, 2000.





                                      F-24
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


     On April 16, 2000, 2,500 shares of Series A, 8% cumulative, convertible,
     preferred stock, no par value were issued in a private placement for gross
     proceeds of $250,000. The proceeds were reduced by any issue expenses.

     On April 16, 2000, 1,500 shares of Series B, 8% cumulative, convertible,
     preferred stock, no par value were issued in a private placement for gross
     proceeds of $1,500,000. The proceeds were reduced by any issue expenses.

     On July 7, 2000, 5000 shares of Series A, 8% cumulative, convertible,
     preferred stock, no par value were issued in a private placement for gross
     proceeds of $500,000. The proceeds were reduced by any issue expenses.

     The preferred stock were convertible into common stock at the option of the
     holders under certain conditions, at any time after the effective date of
     the registration statement.

     As of June 30, 2003, there were no Series A or B Convertible Preferred
     Stock outstanding.

     Pursuant to a share purchase agreement dated April 18, 2001, the Company
     issued 1,105 shares of Series C 7% Cumulative Convertible Preferred Stock
     (Series C Preferred Stock). Each share of Series C Preferred Stock had a
     stated value of $1,000 per share. The shares of Series C Preferred Stock
     were convertible into shares of the Company's common stock at the option of
     the holders, at any time after issuance until such shares of Series C
     Preferred Stock were manditorily converted or redeemed by the Company,
     under certain conditions. The Company was required to register 200% of the
     shares of common stock issuable upon the conversion of the 1,105 shares of
     Series C Preferred Stock. In addition, upon the effective date of such
     registration statement, the Company was obligated to issue to the holders
     of Series C Preferred Stock an aggregate of 500 shares of Series C
     Preferred Stock in consideration for $500,000, under certain conditions.

     The number of shares of the Company's common stock into which the Series C
     Preferred stock was convertible into that number of shares of common stock
     equal to (i) the sum of (A) the stated value per share and (B) at the
     holder's election, accrued and unpaid dividends on such share, divided by
     (ii) the Conversion Price". The "Conversion Price" was the lesser of (x)
     87.5% of the average of the 5 lowest daily volume weighted average prices
     of the Company's common stock during the period of 60 consecutive trading
     days immediately prior the date of the conversion notice; or (y) 90% of the
     average of the daily volume weighted average prices during the period of
     the 5 trading days prior to the applicable closing date ($.4798 with
     respect to the 1,105 shares of Series C 7% Preferred Stock issued and
     outstanding). The Conversion Price was subject to certain floor and time
     limitations.

     During the year ended December 31, 2001, the Company issued 3,864,634
     common stock on the conversion of 1,050 Series A preferred stock, 750
     Series B preferred stock and 285 Series C preferred stock. The Company paid
     dividends of $723,607 on the conversions.

     During the year ended December 31, 2002, the Company issued 23,278,448
     shares of its common Stock on the conversion of 945 Series C preferred
     stock. The Company paid dividends of $100,387 on the conversions. As of
     June 30, 2003, there were no Series C preferred stock outstanding.

     The proceeds received on the issue of Class C preferred shares have been
     allocated between the value of detachable warrants issued and the preferred
     shares outstanding on the basis of their relative fair values. Paid in
     capital has been credited by the value of the warrants and retained
     earnings charged for the amount of preferred dividends effectively paid.
     The conversion benefit existing at the time of issue of the preferred Class
     C shares has been computed and this amount has been credited to paid in
     capital for the Class C preferred shares and charged to retained earnings
     as dividends on the Class C preferred shares.






                                      F-25
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)

     e) Warrants

     On December 30, 1999, 475,000 warrants were issued in conjunction with the
     private placement of the Series A, preferred stock. They are exercisable at
     any time and in any amount until December 30, 2004 at a purchase price of
     $3.24 per share. These warrants have been valued at $1,091,606 based on the
     Black Scholes model utilizing a volatility rate of 100% and a risk-less
     interest rate of 6.33%. This amount has been treated as a cumulative effect
     adjustment to retained earnings. For purposes of earnings per share, this
     amount has been included with preferred share dividend in the 2000
     financial statements.

     In connection with the Initial Public Offering, the underwriters received
     110,000 warrants. They are exercisable at a purchase price of $8.25 per
     share until June 1, 2004.

     On April 16, 2000, we issued 50,000 warrants in connection with a private
     placement of Series A stock and 300,000 warrants on the issue of Class B
     preferred shares. The warrants were issued with a strike price of $3.71 and
     expire April 16, 2005. These warrants have been valued at $939,981 based on
     the Black Scholes model utilizing a volatility rate of 100% and a risk-less
     interest rate of 6.18%. This amount has been treated as a preferred share
     dividend in the 2000 financial statements.

     In connection with the private placement of Series B preferred stock
     225,000 warrants were issued. They are exercisable at a purchase price of
     $3.58. These warrants have been valued at $533,537 based on the Black
     Scholes model utilizing a volatility rate of 100% and a risk-less interest
     rate of 6.13%. This amount has been treated as a preferred share dividend
     in the 2000 financial statements.

     In 2000, in connection with the purchase of the investment in E-Wink
     500,000 warrants were issued. They are exercisable at a purchase price of
     $3.25 and expire March 6, 2005. These warrants have been valued at
     $1,458,700 based on the Black Scholes model utilizing a volatility rate of
     100% and a risk-less interest rate of 6.50%. This amount has been treated
     as part of the cost of the E-Wink investment.

     In 2000, in connection with the private placement of August 22, 2000,
     560,627 warrants were issued. They are exercisable at a purchase price of
     $2.46 and expire August 22, 2005. These warrants have been valued at
     $1,295,049 based on the Black Scholes model utilizing a volatility rate of
     100% and a risk-less interest rate of 6.13%. This amount has been treated
     as an allocation of the proceeds on the common stock issuance.

     On January 26, 2001, the Company: (i) repriced warrants to purchase up to
     100,000 shares of its common stock, which warrant was issued to a certain
     investor in our April 2000 private placement offering of Series B 8%
     Cumulative Preferred Stock, so that such warrant is exercisable at any time
     until April 16, 2005 at a new purchase price of $1.00 per share; (b)
     repriced warrants to purchase an aggregate of up to 280,693 shares of its
     common stock, which warrants were issued to the placement agent, certain
     financial advisors, and the placement agent's counsel in our August 2000
     private placement offering of units, so that such warrants are exercisable
     at any time until August 22, 2005 at a new purchase price of $1.00 per
     share; and (c) issued warrants to purchase up to 250,000 shares of its
     common stock exercisable at any time and in any amount until January 26,
     2006 at a purchase price of $1.50 per share. In February 2001, 150,000 of
     such warrants were exercised by KSH Investment Group, the placement agent
     in the Company's August 2000 private placement offering. The exercise
     prices of the revised and newly issued warrants are equal to, or in excess
     of, the market price of our common stock on the date of such revision or
     issuance.






                                      F-26
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)



     Following verbal agreements in December 2000, on January 24, 2001, the
     company signed an agreement with The Del Mar Consulting Group, a California
     corporation, to represent it in investors' communications and public
     relations with existing shareholders, brokers, dealers and other investment
     professionals. The company issued a non-refundable retainer of 400,000
     shares to Del Mar and are required to pay $4,000 per month for on-going
     consulting services. In addition, Del Mar has a warrant to purchase 400,000
     shares of common stock at $1.00 per share and 100,000 shares at $2.00 which
     expires January 24, 2005 and which are exercisable commencing August 1,
     2001. As the agreement to issue the non- refundable retainer was reached in
     December 2000, the 400,000 shares with a value of $268,000 has been
     included in the shares issued for services rendered and has been included
     in financing expenses for December 31, 2000. The commitment to issue the
     non-refundable deposit was effected in December 2000. The value of the
     warrants of $216,348 has been included in paid in capital in January 2001
     and the expense was reflected over the six month period ending August 1,
     2001. In April 2001, the warrants were cancelled and new warrants were
     issued which are exercisable at $0.55. 200,000 of the warrants are
     exercisable commencing April 2001 and the balance are exercisable
     commencing August 1, 2001. The value of the change in the warrants of
     $29,702 has been included in the paid in capital in April 2001 and the
     additional expense was amortized in the period ending August 1, 2001.

     During the year ended December 31, 2001, the company issued 22,122 shares
     to the Business Development Bank of Canada on the exercise of warrants at
     $1.00.

     During the year ended December 31, 2001, the Company issued 723,436
     warrants to the Series C Preferred Stock investors of which 663,484 have a
     strike price of $0.54 and expire on April 18, 2005. The balance of 59,952
     have a strike price of $0.63 and expire on June 8, 2005. As of December 31,
     2002, all 723,436 warrants issued in connection with the purchase of the
     Series C Preferred Stock remain outstanding and none have been exercised.

     On May 24, 2002, the company entered into an agreement with Tazbaz Holdings
     Limited, pursuant to which Tazbaz securitized an overdraft position of the
     company with Bank One in the amount of $650,000 until the Bank's repayment
     on December 5, 2002. Pursuant to this agreement the company issued
     10,000,000 warrants; 6,000,000 of which are exercisable at any time and in
     any amount until November 15, 2009 at a purchase price of $.08 per share,
     and 4,000,000 of which are exercisable at any time and in any amount until
     November 15, 2009 at a purchase price of $.04 per share.

     On October 1, 2002, the company entered into consulting agreements with a
     group of seven consultants with expertise in restructuring, financing,
     legal and management services for one-year terms to assist the company with
     its restructuring and refinancing efforts. In consideration for such
     services the company issued 10,600,000 warrants which are exercisable at
     any time and in any amount until September 30, 2003 at a purchase price of
     $.025 per share. As of December 31, 2002, 7,200,000 warrants had been
     exercised with net proceeds of $192,500.

     On December 5, 2002, the company issued 50,285,714 warrants to holders of
     the 12% Senior Secured Convertible Debentures which are exercisable at any
     time and in any amount until December 5, 2009 at a purchase price of $.0175
     per share. On July 22, 2003, 12,571,428 of these warrants were repriced
     from $.0175 to $.00137 per share.

     Pursuant to the December 18, 2002 convertible debenture, the company issued
     5,625,000 warrants to Tazbaz Holdings Limited, which are exercisable at any
     time and in any amount until December 18, 2009 also at a purchase price of
     $0.175 per share.

     During the three months ended March 31, 2003, the company issued 84,285,714
     warrants to holders of the 12% Senior Secured Convertible Debentures which
     are exercisable at any time and in any amount for seven years from the date
     of closing at a purchase price of $.0175 per share. On June 30, 2003,
     45,714,286 of these warrants were repriced from $.0175 to $.00875 per
     share. On July 22, 2003, 22,857,143 of these warrants were repriced from
     $.0175 to $.00137 per share.

     During the three months ended June 30, 2003, the company issued 109,777,942
     warrants to holders of the 12% Senior Secured Convertible Debentures which
     are exercisable at any time and in any amount for seven years from the date
     of closing at purchase prices ranging from $.0175 to $.00137 per share.





                                      F-27
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)



     f) Stock Options

     The company had outstanding stock options issued in conjunction with its
     long-term financing agreements for 22,122 common stock which were exercised
     in July 2001, the cost of which has been expensed prior to January 1, 1999,
     and additional options issued to a previous employee of the company for
     200,000 shares exercisable at $2.10, of which 18,508 were exercised during
     2000. The balance of 181,492 options remain outstanding.

     During 1999, 250,500 options to purchase shares of the company were issued
     to related parties. The options are exercisable at $3.19.

     In connection with the acquisition of Cad Cam Inc. 100,000 options to
     purchase shares of the company were delivered in quarterly installments of
     25,000 options each, starting January 1, 2000. The exercise amounts ranged
     from $2.12 to $3.25. The exercise price was amended to $1.00 and these
     options will be exercisable between April 4, 2001 to 2004. The cost of
     re-pricing of these options totaling $100,000 has been recorded in
     Acquisition costs and financing expenses for the year ended December 31,
     2000.

     In July 1999, the directors of the company adopted and the stockholders
     approved the adoption of the company's 1998 Stock Option Plan. In May 2000,
     the directors approved the adoption of the 2000 Stock Option Plan. In June
     2001, the directors approved the adoption of the 2001 Stock Option Plan.
     Each of the plans provides for the issuance of 435,000 options. In October
     2002, the directors of the company adopted and the stockholders approved
     the adoption of the company's 2002 Stock Option Plan which provides for the
     issuance of 6,500,000 options.

     The plans are administrated by the Compensation Committee or the Board of
     Directors, which determine among other things, those individuals who shall
     receive options, the time period during which the options may be partially
     or fully exercised, the number of common stock to be issued upon the
     exercise of the options and the option exercise price.

     The plans are effective for a period of ten years and options may be
     granted to officers, directors, consultants, key employees, advisors and
     similar parties who provide their skills and expertise to the company.

     Options granted under the plans generally require a three-year vesting
     period, and shall be at an exercise price that may not be less than the
     fair market value of the common stock on the date of the grant. Options are
     non-transferable and if a participant ceases affiliation with the company
     by reason of death, permanent disability or retirement at or after age 65,
     the option remains exercisable for one year from such occurrence but not
     beyond the option's expiration date. Other types of termination allow the
     participant 90 days to exercise the option, except for termination for
     cause, which results in immediate termination of the option.

     Any unexercised options that expire or that terminate upon an employee's
     ceasing to be employed by the company become available again for issuance
     under the plans, subject to applicable securities regulation.

     The plans may be terminated or amended at any time by the Board of
     Directors, except that the number of common stock reserved for issuance
     upon the exercise of options granted under the plans may not be increased
     without the consent of the stockholders of the company.

     Included in the options granted in 2000 were 260,000 options issued to
     related parties in December 2000. The options are exercisable at $0.70 and
     expire December 2005.





                                      F-28
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





14.    FINANCING EXPENSES

         Financing expenses represent the following;

         a) Acquisition costs incurred which are not related to a successfully
         completed acquisition and the costs incurred on the merger with
         entities treated as a pooling of interest.

         b) Financing expenses include consulting services for financing and the
         cost of options and warrants.



15.    RESTRUCTURING COSTS

           i) December 31, 2002

           At the end of December 31, 2001 the Company had a restructuring
           reserve balance of $79,118 as a result of certain of the Company's
           actions to better align its cost structure with expected revenue
           growth rates. The restructuring activities related to the closure of
           one training location in London, Ontario resulting in costs to sever
           3 employees with long-term contracts until December 2002 and the
           lease commitment for the premises in London Ontario. These long-term
           contracts do not require the employees to provide services until the
           date of involuntary termination. Other employees at the London
           location, without contracts, were terminated during March 2001 and
           April 2001

           The accrual was relieved throughout fiscal 2002 as severance payments
           were completed. Details of the restructuring costs and reserve
           balance is as follows;
<TABLE>
<CAPTION>

            Description            Cash/   Reserve balance   Restructuring  Activity  Reserve balance
                                 non/cash  December 31,2001      Costs                December 31, 2002

<S>                               <C>         <C>             <C>          <C>           <C>
            Severance packages
             London-Training       Cash      66,518               --        (66,518)        --
--------------------------------------------------------------------------------------------------------
            Lease cancellations
             London-Training       Cash      12,600               --        (12,600)        --
--------------------------------------------------------------------------------------------------------
               Commitments                   79,118               --        (79,118)        --
                                            =======          =======        =======     =======
</TABLE>

          ii) December 31, 2001

          At the end of December 31, 2000 the Company had a restructuring
          reserve balance of $571,339 as a result of certain of the Company's
          actions to better align its cost structure with expected revenue
          growth rates. The restructuring activities related to the closure of
          one training location in London, Ontario resulting in costs to sever 3
          employees with long-term contracts until December 2002 and the lease
          commitment for the premises in London Ontario. These long-term
          contracts do not require the employees to provide services until the
          date of involuntary termination. Other employees at the London
          location, without contracts, have been terminated during March 2001
          and April 2001. During the three months ended September 2001, the
          lease cancellation costs for London have been reduced by $30,700 and
          the severance costs for London have been reduced by $56,000. These
          amounts represent settlements reached with the landlord and one of the
          three employees with long term contracts. The employee agreed to a
          reduction in the term of the contract which resulted in a reduction of
          the liability of $56,000.

          In February 2001, the company started to close down one of its
          research and development (R&D) Operations located in Toronto. The
          company continued to terminate employees until April 2001. The
          premises are subject to a long-term lease and will be utilized for
          corporate needs in the future. Restructuring costs include rent for
          the current period for the Toronto R&D space. The company moved its
          operations into this space at the end of October 2001.




                                      F-29
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





     The remaining accrual will be relieved throughout fiscal 2001, as leases
     expire and severance payments, some of which are paid on a monthly basis,
     are completed. Details of the restructuring costs and reserve balance is as
     follows;
<TABLE>
<CAPTION>

     Description            Cash/   Reserve balance   Restructuring  Activity  Reserve balance
                          non/cash  December 31, 2000     Costs                December 31, 2001

<S>                       <C>           <C>             <C>         <C>         <C>
     Severance packages
        London-Training       Cash     435,173           50,696      (419,351)    66,518
-------------------------------------------------------------------------------------------------
        Toronto-R&D           Cash      17,640          (25,348)        7,708        --
-------------------------------------------------------------------------------------------------
     Lease cancellations
        London-Training       Cash     118,526           27,159      (133,085)    12,600
        Toronto-R&D           Cash                      439,714      (439,714)       --
                                       -------          -------       -------    -------
     Commitments                       571,339          492,221      (984,442)    79,118
                                       =======          =======       =======    =======
</TABLE>


16.  DEFERRED INCOME TAXES AND INCOME TAXES


         a) Deferred Income Taxes

         The components of the future tax liability classified by source of
         temporary differences that gave rise to the benefit are as follows:
<TABLE>
<CAPTION>

                                                     June 30,     December 31,   December 31,
                                                        2003             2002           2001
                                                           $                $            $
<S>                                                <C>            <C>            <C>
         Accounting amortization in excess of tax
         amortization                                  9,875            9,875          9,875
         Losses available to offset future income
         taxes                                     3,776,365        3,113,829      2,909,873
         Share issue costs                           429,785          429,785        532,405
         Adjustment cash to accrual method          (148,461)        (148,461)      (496,879)
         Investment tax credit                            --               --             --
                                                   ---------        ---------      ---------
                                                   4,067,564        3,405,028      2,955,274

         Less:  Valuation allowance                4,067,564        3,405,028      3,105,654
                                                   ---------        ---------      ---------
                                                          --               --       (150,380)
                                                   =========        =========      =========
</TABLE>


         As part of the acquisitions of Cad Cam Inc. and MicroTech
         Professionals Inc., there was a change of control which resulted in
         the subsidiaries being required to change from the cash method to
         the accrual method of accounting for income tax purposes.


         b) Current Income Taxes
<TABLE>
<CAPTION>

            Current income taxes consist of:
                                                            June 30,     December 31,   December 31,
                                                               2003             2002           2001
                                                                  $                $              $
<S>                                                     <C>            <C>              <C>
                Amount calculated at Federal and
                       Provincial statutory rates        (2,120,343)      (3,258,661)    (3,533,461)
                                                         ----------       ----------      ---------
                Increase (decrease) resulting from:
                       Permanent differences              1,479,705        2,928,884      1,629,464
                       Timing differences                       --                --       (141,868)
                       Valuation allowance                  652,661          299,374      2,895,654
                                                          ---------       ----------      ---------
                                                          2,132,366        3,228,258      4,383,250
                                                          ---------       ----------      ---------
                Current income taxes                         12,023          (30,403)       849,789
                                                          =========       ==========      =========
</TABLE>



                                      F-30
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)



         Issue expenses totaling approximately $1,300,000 may be claimed at
         the rate of 20% per year until 2005. To the extent that these
         expenses create a loss, the loss is available to be carried forward
         for seven years from the year the loss is incurred. As the US
         subsidiaries have been acquired by a non-US entity, the taxable
         income will be increased by approximately $1,025,000 over the next
         two years as the company is required to change its taxation method
         from the cash basis to the accrual basis. The company has not
         reflected the benefit of
         utilizing non-capital losses totaling approximately $10,600,000 or a
         capital loss totaling $750,000 in the future as a deferred tax asset
         as at June 30, 2003. As at the completion of the June 30, 2003
         financial statements, management believed it was more likely than
         not that the results of future operations would not generate
         sufficient taxable income to realize the deferred tax assets.


17.    OTHER COMPREHENSIVE INCOME (LOSS)

<TABLE>
<CAPTION>

         Comprehensive income (loss) for the three months ended June 30, 2003:

                                                                    Before Tax            Tax (Expense)             Net-of-Tax
                                                                      Amount               or Benefit                   Amount
                                                                      ------               ----------                   ------

<S>                                                                  <C>                   <C>                     <C>
         Foreign currency translation adjustments                    (102,094)                    --                 (102,094)

         Adjustment to market value                                       --                      --                       --
                                                                    ---------                -------                ---------

         Other comprehensive income (loss)                           (102,094)                    --                 (102,094)
                                                                    =========                ========               =========


         Comprehensive income (loss) for the three months ended March 31, 2003:

                                                                    Before Tax            Tax (Expense)             Net-of-Tax
                                                                      Amount               or Benefit                   Amount
                                                                      ------               ----------                   ------

         Foreign currency translation adjustments                         --                      --                       --

         Adjustment to market value                                       --                      --                       --
                                                                    ---------                -------                ---------

         Other comprehensive income (loss)                                --                      --                       --
                                                                    =========                ========               =========


         Comprehensive income (loss) for the year ended December 31, 2002:

                                                                    Before Tax            Tax (Expense)             Net-of-Tax
                                                                      Amount               or Benefit                   Amount
                                                                      ------               ----------                   ------

         Foreign currency translation adjustments                   (171,283)                     --                 (171,283)

         Adjustment to market value                                 (300,747)                     --                 (300,747)
                                                                    ---------                -------                ---------

         Other comprehensive income (loss)                          (472,030)                     --                 (472,030)
                                                                    =========                ========               =========


         Comprehensive income (loss) for the year ended December 31, 2001:

                                                                    Before Tax            Tax (Expense)             Net-of-Tax
                                                                        Amount               or Benefit                 Amount
                                                                        ------               ----------                 ------

          Foreign currency translation adjustments                    209,506                    -                     209,506

          Adjustment to market value                                 (230,643)                69,193                  (161,450)
                                                                    ---------                -------                 ---------

          Other comprehensive income (loss)                           (21,137)                69,193                    48,056
                                                                    =========                ========                =========

</TABLE>


          The foreign currency translation adjustments are not currently
          adjusted for income taxes since the company is situated in Canada and
          the adjustments relate to the translation of the financial statements
          from Canadian dollars into United States dollars done only for the
          convenience of the reader.


                                      F-31
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





18.    DISCONTINUED OPERATIONS

           Effective March 8, 2002, the Company sold its technology division,
           Njoyn Software Incorporated to Cognicase Inc., a Canadian company.
           Net proceeds after broker fees were $1,350,000 of which the company
           received $800,000 in cash and $550,000 worth of unrestricted common
           shares on closing. The shares were sold on March 11, 2002 for value
           of $524,673. As part of the transaction, Cognicase assumed all of the
           staff in the Company's technology division, including the employees
           of TidalBeach Inc. The company will not have future revenues from
           either its Njoyn or Secondwave products and therefore the technology
           operations have been reported as discontinued.

           There was no technology revenue for the three months ended June 30,
           2003 and 2002. The operating loss for the three months ended June 30,
           was $9,323 in 2003 and $14,761 in 2002. On disposal, Njoyn had
           approximately $950,000 in assets consisting primarily of deferred
           development charges and approximately $30,000 in liabilities
           consisting primarily of capital lease obligations. The gain on
           disposal of $400,229 has been reflected in the Income (loss) from
           discontinued operations in 2002. No income taxes have been reflected
           on this disposition as the sale of the shares gives rise to a capital
           loss, the benefit of which, is more likely than not to be realized.

           Effective May 1, 2002, the Company signed an agreement with triOS
           Training Centres Limited, an Ontario company, for the purchase of
           certain assets of the Toronto training division, Thinkpath Training
           for a nominal amount of cash and the assumption of all prepaid
           training liabilities. As part of the transaction, triOS assumed the
           Toronto training staff and is subletting the classroom facilities.
           The gain on disposal of $97,350 has been reflected in the Income
           (loss) from discontinued operations in 2002.

           On November 1, 2002, the Company entered into a series of agreements
           with Thinkpath Training LLC, a New York company, for the purchase of
           certain assets of the New York training division, Thinkpath Training
           for a nominal amount of cash and the assumption of all prepaid
           training liabilities. As part of the transaction, Thinkpath Training
           LLC assumed the New York training staff, some assets and is
           subletting the classroom facilities.

           As a result of these two transactions, the company will not have
           future revenues from its training division and therefore the
           operations have been reported as discontinued.

           Training revenue for the three months ended June 30, was $93,985 in
           2003 and $491,756 in 2002. The operating income from the training
           division for the three months ended June 30, was $66,448 in 2003 and
           $204,633 in 2002.

           Effective June 27, 2003, the Company signed an agreement with
           Brainhunter.com Ltd., an Ontario company, for the purchase of certain
           assets of the Toronto IT recruitment division for a nominal amount of
           cash and the assumption of all employee liabilities. The gain on
           disposal of $190,627 has been reflected in the Income (loss) from
           discontinued operations in 2003. As a result of this transaction, the
           Company will not have future revenues from its IT recruitment
           division and therefore the operations have been reported as
           discontinued.

           IT recruitment revenue for the three months ended June 30, was
           $625,459 in 2003 and $3,378,665 in 2002. The operating income from
           the IT recruitment division for the three months ended June 30, was
           $32,399 in 2003 and $48,699 in 2002.




                                      F-32
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





     The following table presents the revenues, loss from operations and other
     components attributable to the discontinued operations of Njoyn Software
     Incorporated, TidalBeach Inc., Thinkpath Training Inc. and Thinkpath
     Training US Inc. and the IT recruitment division for the three and six
     months ending:
<TABLE>
<CAPTION>

                                            THREE MONTHS ENDED     THREE MONTHS ENDED     SIX MONTHS ENDED       SIX MONTHS ENDED
                                               JUNE 30, 2003          JUNE 30, 2002         JUNE 30, 2003          JUNE 30, 2002
                                            --------------------   --------------------   -------------------    ----------------

<S>                                                 <C>               <C>                   <C>                    <C>
     Revenues                                       719,443           3,870,383             1,588,867              7,760,753
                                            ----------------       -----------------      -------------------    ----------------

     Income from operations before income
     taxes                                           89,525             237,775                93,353                 45,501

     Provision for Income Taxes (recovery)
                                                         --                  --                   625                    451

     Gain on disposal of Njoyn Software
                                                         --                  --                    --                400,229

     Gain on disposal of Training Canada
                                                         --              97,350                    --                 97,350

     Gain on disposal of IT Recruitment
     division                                       190,627                  --               190,627                     --
                                            ----------------       -----------------      -------------------    ----------------

     Income (loss) from discontinued
     operations                                     280,152             335,125               283,355                542,629
                                            ================       =================      ===================    ================

</TABLE>


19. SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES


     During the year ended December 31, 2002, the company issued common shares
     and warrants for the following;

              Services rendered                       $1,556,485
              Liabilities payable in common stock      1,197,942
              Accounts payable                           434,348
                                                      ----------
                                                      $3,188,775
                                                      ==========

     During the three months ended March 31, 2003, the company issued common
     shares and warrants for the following:

              Services rendered                       $226,500
              Accounts payable                         440,899
                                                      --------
                                                      $667,399
                                                      ========

     During the three months ended June 30, 2003, the company issued common
     shares for the following:

              Accounts payable                        $8,434
                                                      ------
                                                      $8,434
                                                      ======



                                      F-33
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)



20.     SEGMENTED INFORMATION
<TABLE>
<CAPTION>

      a) Sales by Geographic Area
                                         Three Months      Three Months      Six Months       Six Months
                                            Ended             Ended             Ended            Ended
                                        June 30, 2003     June 30, 2002     June 30, 2003    June 30, 2002
                                        -------------     -------------     -------------   -------------
                                               $                $                 $                $
<S>                                          <C>                                  <C>
          Canada                             130,774                 --           163,520             --
          United States of America         2,340,932          3,506,669         4,798,473      7,063,543
                                          ----------         ----------        ----------      ----------
                                           2,471,706          3,506,669         4,961,993      7,063,543
                                          ==========         ==========        ==========      ==========


      b) Net Loss by Geographic Area
                                         Three Months      Three Months      Six Months       Six Months
                                            Ended             Ended             Ended            Ended
                                        June 30, 2003     June 30, 2002     June 30, 2003    June 30, 2002
                                        -------------     -------------     -------------   -------------
                                               $                $                 $                $
          Canada                            (932,729)          (457,031)       (5,596,248)      (563,866)
          United States of America           287,454            (50,274)          295,390       (442,909)
                                          ----------         ----------        ----------      ----------
                                            (645,275)          (507,305)       (5,300,858)    (1,006,775)
                                          ==========         ==========        ==========      ==========


      c)   Identifiable Assets by Geographic Area
                                             June 30,       December 31,        December 31,
                                              2003              2002               2001
                                        --------------     -------------     --------------
                                              $                  $                  $

            Canada                          2,116,438          2,644,647          4,995,715
            United States of America        5,975,297          6,142,884         12,179,263
                                           ----------         ----------         ----------
                                            8,091,735          8,787,531         17,174,978
                                           ==========         ==========         ==========


      d) Revenue and Gross Profit by Operating Segment

                                         Three Months      Three Months      Six Months       Six Months
                                            Ended             Ended             Ended            Ended
                                        June 30, 2003     June 30, 2002     June 30, 2003    June 30, 2002
                                        -------------     -------------     -------------   -------------
                                               $                $                 $                $
          Revenue
          Tech Pubs and Engineering        2,371,806          3,006,305         4,726,995       6,157,862
          IT Documentation                    99,900            500,364           234,998         905,681
                                          ----------         ----------        ----------      ----------
                                           2,471,706          3,506,669         4,961,993       7,063,543
                                          ==========         ==========        ==========      ==========
         Gross Profit
          Tech Pubs and Engineering          835,399            978,362         1,531,152       2,004,943
          IT Documentation                    20,653            124,910            47,235         236,036
                                          ----------         ----------        ----------      ----------
                                             856,052          1,103,272         1,578,387       2,240,979
                                          ==========         ==========        ==========      ==========
</TABLE>

      e) Revenues from Major Customers

     The consolidated entity had the following revenues from major customers:

     For the three months ended June 30, 2003 and 2002, no single customer
     consisted of more than 10% of the company's revenues.

      f) Purchases from Major Suppliers
             There were no significant purchases from major suppliers.


                                      F-34
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)


21.     EARNINGS PER SHARE


           The company has adopted Statement No. 128, Earnings Per Share, which
           requires presentation, in the consolidated statement of income, of
           both basic and diluted earnings per share.
<TABLE>
<CAPTION>

                                                      THREE          THREE MONTHS      SIX  MONTHS           SIX MONTHS
                                                  MONTHS ENDED          ENDED             ENDED                 ENDED
                                                  JUNE 30, 2003      UNE 30, 2002      JUNE 30, 2003        JUNE 30, 2002

                                                ----------------     --------------    --------------     ----------------
     NUMERATOR
<S>                                                   <C>                <C>             <C>                  <C>
     Net loss from continuing operations              (925,427)          (842,430)       (5,584,213)          (1,549,404)

     Preferred stock dividends                               --             31,493                --              55,173
                                                ----------------     --------------    --------------     ----------------

     Loss available to common stockholders            (925,427)          (873,923)       (5,584,213)          (1,630,328)
                                                ----------------     --------------    --------------     ----------------

     Income from discontinued operations               280,152            335,125           283,355              542,629
                                                ----------------     --------------    --------------     ----------------

     Net loss                                         (645,275)          (538,798)       (5,300,858)          (1,061,948)
                                                ================     ==============    ==============     ================

     DENOMINATOR
     Weighted Average common stock outstanding     201,863,253         24,511,005       148,567,552           21,182,368
                                                ================     ==============    ==============     ================

     Basic and fully diluted loss per common
     share from continuing operations                    (0.00)             (0.03)            (0.04)               (0.07)
                                                =================    ===============    ==============     ================

     Basic and fully diluted loss per common
     share after preferred stock dividends               (0.00)             (0.04)            (0.04)               (0.08)
                                                ================     ==============    ==============     ================

     Basic and fully diluted loss per common
     share after discontinued operations                 (0.00)             (0.02)            (0.04)               (0.05)
                                                ================     ==============    ==============     ================

                                                THREE MONTHS           THREE MONTHS          SIX                   SIX
                                                    ENDED                 ENDED          MONTHS ENDED         MONTHS ENDED
                                                JUNE 30, 2003         JUNE 30, 2002      UNE 30, 2003         JUNE 30, 2002
                                                ----------------     ------------------  ----------------   ------------------

     Average common stock outstanding
                                                    201,863,253             24,511,005       148,567,552           21,182,368
     Average common stock issuable                          --                     --                --                   --
                                                ----------------     ------------------  ----------------   ------------------

     Average common stock outstanding assuming
     dilution                                       201,863,253             24,511,005       148,567,552           21,182,368
                                                ================     ==================  ================   ==================

</TABLE>




                                      F-35
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





     The outstanding options and warrants as detailed in note 13 were not
     included in the computation of the fully diluted earnings per common share
     as the effect would be anti-dilutive.

     The earnings per share calculation (basic and fully diluted) does not
     include any common stock for common stock payable as the effect would be
     anti-dilutive.

     As indicated in Note 25, the company has issued 452,096,517 shares of its
     common stock upon to the convertible debenture holders upon the conversion
     of $945,000 of debentures and accrued interest.



22.      STOCK OPTION PLANS
<TABLE>
<CAPTION>
                                                               OPTIONS        WEIGHTED
                                                                               AVERAGE
                                                                              EXERCISE
                                                                                 PRICE

<S>                                                         <C>              <C>
       Options outstanding at January 1, 2000                    472,625          2.21

       Options granted to key employees and directors            969,500          2.22
       Options exercised during the year                         (18,508)         2.10
       Options forfeited during the year                          (4,000)         3.19
       Options expired during the year                               -
                                                               ---------
       Options outstanding at December 31, 2000                1,419,617          2.21

       Options granted to key employees and directors             35,000           .68
       Options granted to consultant                              50,000           .70
       Options exercised during the year                         (22,125)          .01
       Options forfeited during the year                        (257,500)         3.21
       Options expired during the year                                -
                                                               ---------
       Options outstanding at December 31, 2001                1,224,992

       Options forfeited during the year                        (114,500)         3.22
                                                               ---------
       Options outstanding at December 31, 2002                1,110,492
                                                               =========
       Options granted, exercised, forfeited or expired
       during the period                                         (13,000)         3.19
                                                               ---------
       Options outstanding at June 30, 2003                    1,097,492
                                                               =========

       Options exercisable December 31, 2000                     714,117          1.95
       Options exercisable December 31, 2001                   1,059,659          1.75
       Options exercisable December 31, 2002                   1,065,992
       Options available for future grant December 31, 2000          --
       Options available for future grant December 31, 2001      261,500
       Options available for future grant December 31, 2002    6,614,500

</TABLE>





                                      F-36
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)






    b) Range of Exercise Prices at June 30, 2003

<TABLE>
<CAPTION>
                     Outstanding     Weighted          Options        Options    Weighted
                       Options       Average         Outstanding    exercisable  Average
                                    Remaining          Average                   Exercise
                                        Life         Exercise Price                Price

<S>                     <C>          <C>                 <C>            <C>          <C>
      $2.10 - $3.25     552,492      1.61 years          $2.81          520,992      $2.79

      $1 and under      545,000      2.06 years          $0.75          545,000      $0.75
</TABLE>



      c) Pro-forma net income

           At June 30, 2003, the company has four stock-based employee
           compensation plans, which are described more fully in Note 13(f). The
           company accounts for those plans under the recognition and
           measurement principles of APB Opinion No.25, Accounting for Stock
           Issued to Employees, and related Interpretations. No stock-based
           employee compensation cost is reflected n net income, as all options
           granted under those plans had an exercise price equal to the market
           value of the underlying common stock on the date of grant. The
           following table illustrates the effect on net income and earnings per
           share if the company had applied the fair value recognition
           provisions of FASB Statement No. 123 Accounting for Stock-Based
           Compensation, to stock-based employee compensation.
<TABLE>
<CAPTION>

                                                THREE           THREE          SIX          SIX,
                                              MONTHS ENDED   MONTHS ENDED   MONTHS ENDED  MONTHS ENDED
                                                JUNE 30,       JUNE 30,       JUNE 30,       JUNE 30,
                                                  2003           2002           2003           2002
                                               -----------   -----------     ----------   -----------
<S>                                               <C>           <C>          <C>          <C>
           Net loss, as reported                  (645,275)     (507,305)    (5,300,858)  (1,006,775)
           Deduct:  Total stock-based
           employee compensation expense
           determined under fair value
           based method for all awards,
           net of related tax effects              (41,202)      (73,138)       (82,404)    (146,276)
                                               -----------   -----------    -----------   -----------
           Pro forma net loss                     (686,477)     (580,443)    (5,383,262)  (1,153,051)
                                               ===========   ===========    ===========   ===========

           Net loss, after preferred share
           dividends                              (645,275)     (538,798)    (5,300,858)  (1,061,948)
           Deduct:  Total stock-based employee
           compensation expense determined
           under fair value based method for all
           awards, net of related tax effects      (41,202)      (73,138)       (82,404)    (146,276)
                                               -----------   -----------     ----------   -----------
           Pro forma net loss after
           preferred share dividends              (686,477)     (611,936)    (5,383,262)  (1,208,224)
                                               ===========   ===========    ============  ===========
           Earnings per share:
           Basic and fully diluted
           loss per share, as reported              (0.00)        (0.02)         (0.04)        (0.05)
                                              ===========   ===========    ============   ===========
           pro forma loss per share                 (0.00)        (0.02)         (0.04)        (0.05)
                                              ===========   ===========    ============   ===========

           loss per share, after preferred
           dividends                                (0.00)        (0.02)         (0.04)        (0.05)
                                              ===========   ===========    ============   ===========
           pro forma loss per share,
           after preferred dividends                (0.00)        (0.03)         (0.04)        (0.06)
                                              ===========   ===========    ============   ===========
</TABLE>





                                      F-37
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





    d) Black Scholes Assumptions

       The fair value of each option grant used for purposes of estimating the
       pro forma amounts summarized above is estimated on the date of grant
       using the Black-Scholes option price model with the weighted average
       assumptions shown in the following table:

                                                    2001 GRANTS
                                                    -----------
       Risk free interest rates                      4.76%
       Volatility factors                             100%
       Weighted average expected life                4.90 years
       Weighted average fair value per share          .74
       Expected dividends                              --

       There were no option grants in the year ended December 31, 2002. There
       were no option grants in the three months ended March 31, 2003. There
       were no option grants in the three months ended June 30, 2003.



23.    COMMITMENTS AND CONTINGENCIES

a)     Lease Commitments

       Minimum payments under operating leases for premises occupied by the
       company and its subsidiaries offices, located throughout Ontario, Canada
       and the United States, exclusive of most operating costs and realty
       taxes, as at June 30, 2003, for the next five years are as follows:

                2003                           $216,022
                2004                            427,951
                2005                            338,829
                2006                            112,885
                2007                            112,885
          Thereafter                                 --
                                              ---------
                                             $1,208,572
                                             ==========

        The lease commitments do not include two operating leases for premises
        that the company is currently sub leasing to the purchasers of the
        Canadian and United States training divisions. If the purchasers were to
        default on payment or abandon the premises, the company would be liable
        for annual payments of $282,096 expiring August 31, 2006 and $150,534
        expiring September 30, 2010.

        The lease commitments do not include an operating lease for premises
        located in the United States that were closed in the fourth quarter of
        2002. The company has not made any payments on this lease since the
        premises were abandoned. The company does not intend to make any further
        payments and the lessor has not tried to enforce payment. The company
        may be liable for a lease balance of $44,597 which expires November 30,
        2004.

        The lease commitments do not include an operating lease for premises
        located in Ontario, Canada that were abandoned in April 2003. The
        term of the lease does not expire until December 31, 2010. The
        company currently owes approximately $667,000 in rent arrears and
        has made an offer to the landlord for a deferred payment schedule at
        a significant discount. The company does not intend to make any
        payments against future rent for these premises. However, the
        company may be held liable for a lease balance of approximately
        $1,500,000 should the landlord try to enforce payment.



                                      F-38
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)




b)        One June 12, 2003, the Canadian Imperial Bank of Commerce ("CIBC")
          filed a statement of claim against Thinkpath Training Inc., a
          subsidiary of the Company, with the Superior Court of Justice of
          Ontario, Canada, Court File No. 41967, demanding payment of damages in
          the sum of $150,000 pursuant to an operating account overdraft
          balance. The CIBC is seeking payment of the overdraft, accrued
          interest and legal fees. The Company intends to defend this claim
          vigorously.

c)        The Company is party to various lawsuits arising from the normal
          course of business and its restructuring activities. No material
          provision has been recorded in the accounts for possible losses or
          gains. Should any expenditure be incurred by the Company for the
          resolution of these lawsuits, they will be charged to the operations
          of the year in which such expenditures are incurred.



24.       RELATED PARTY TRANSACTIONS

           On November 1, 2002, the Company entered into a series of agreements
           with Thinkpath Training LLC, a New York company, for the purchase of
           certain assets of the New York training division, Thinkpath Training
           for a nominal amount of cash and the assumption of all prepaid
           training liabilities. As part of the transaction, Thinkpath Training
           LLC assumed the New York training staff, some assets and is
           subletting the classroom facilities. The owner of Thinkpath Training
           LLC, is the daughter of the Company's Chief Executive Officer. As a
           result of this transaction, included in the Accounts Payable at June
           30, 2003, is an amount of approximately $29,032 due to Thinkpath
           Training LLC by the Company.



25.    SUBSEQUENT EVENTS

           Subsequent to June 30, 2003, the Company closed an additional
           $200,000 in convertible debentures together with 123,588,851
           warrants. The funds were used for various debt settlements and
           critical payables. The debentures will become due twelve months from
           the date of issuance. The investors will have the right to acquire up
           to $200,000 worth of the Company's common stock at a price the lesser
           of $.0175 or 50% of the average of the three lowest prices on three
           separate trading days during the sixty-day trading period prior to
           conversion. The warrants are exercisable at any time and in any
           amount for a period of 7 years from the original purchase date at
           purchase prices ranging from $.0175 to $.00137 per share. The Company
           is required to pay interest to the debenture holder on the aggregate
           unconverted and outstanding principal amount of the debenture at the
           rate of 12% per annum, payable on each conversion date and maturity
           date in cash or shares of common stock.

           The proceeds received by the Company were allocated between the
           warrants and the debenture without warrants on a pro rata basis. Paid
           in capital has been credited by the value of the warrants.

           As of August 14, 2003, the Company has issued 452,096,517 shares of
           its common stock upon to the convertible debenture holders upon the
           conversion of $945,000 of debentures and accrued interest.

           On July 17, 2003, the Company settled a loan balance with the
           Business Development Bank of Canada ("BDC") of approximately $38,000
           plus accrued interest for a one-time payment of $10,000. The discount
           amount of approximately $28,000 will be recognized as debt
           forgiveness in the third quarter.

           On July 29, 2003, the Company entered into a settlement agreement
           with Christopher Killarney, a former employee, in the sum of $3,600.
           This settlement was pursuant to a claim filed against the Company on
           June 14, 2002, with the Superior Court of Justice of Ontario, Canada,
           Court File No. 02- CV-229385CMS, alleging wrongful dismissal and
           breach of contract. Mr. Killarney was seeking $650,000 in damages
           plus attorney's fees.

           On August 7, 2003, the Company entered into a settlement agreement
           with AT&T Corp., in the sum of $15,000. This settlement was pursuant
           to a claim filed against the Company by AT&T Corp. with the United
           States District Court for the Southern District of New York, No. 02
           CV 3132, alleging that the Company breached an agreement to pay AT&T
           certain monies in exchange for Internet and Web Hosting services
           purportedly performed by AT&T. AT&T was seeking $150,000 in damages
           plus interest and attorney's fees.




                                      F-39
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2003
(AMOUNTS EXPRESSED IN US DOLLARS)





26.    FINANCIAL INSTRUMENTS

    a) Credit Risk Management

       The company is exposed to credit risk on the accounts receivable from its
       customers. In order to reduce its credit risk, the company has adopted
       credit policies which include the analysis of the financial position of
       its customers and the regular review of their credit limits. In some
       cases, the company requires bank letters of credit or subscribes to
       credit insurance.

    b) Concentration of Credit Risk
       The company does not believe it is subject to any significant
       concentration of credit risk. Cash and short-term investments are in
       place with major financial institutions and corporations.

    c) Interest Risk
       The long-term debt bears interest rates that approximate the interest
       rates of similar loans. Consequently, the long-term debt risk exposure is
       minimal.


    d) Fair Value of Financial Instruments

       The carrying value of the accounts receivable, bank indebtedness, and
       accounts payable on acquisition of subsidiary company approximates the
       fair value because of the short-term maturities on these items.

       The carrying amount of the long-term assets approximates the fair value
       of these assets.

       The fair value of the company's long-term debt is estimated on the quoted
       market prices for the same or similar debt instruments. The fair value of
       the long-term debt approximates the carrying value.



27.    COMPARATIVE FIGURES

       Certain figures in the June 30, 2002 financial statements have been
       reclassified to conform with the basis of presentation used at June 30,
       2003.





                                      F-40
<PAGE>




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto and the other historical
financial information of Thinkpath Inc. contained elsewhere in this Form 10-Q.
The statements contained in this Form 10-Q that are not historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended
including statements regarding Thinkpath Inc.'s expectations, intentions,
beliefs or strategies regarding the future. Forward-looking statements include
Thinkpath Inc.'s statements regarding liquidity, anticipated cash needs and
availability and anticipated expense levels. All forward-looking statements
included in this Form 10-Q are based on information available to Thinkpath Inc.
on the date hereof, and Thinkpath Inc. assumes no obligation to update any such
forward-looking statement. It is important to note that Thinkpath Inc.'s actual
results could differ materially from those in such forward-looking statements.
All dollar amounts stated throughout this Form 10-Q are in United States dollars
unless otherwise indicated. Unless otherwise indicated, all reference to
"Thinkpath," "us," "our," and "we," refer to Thinkpath Inc. and its
subsidiaries.

OVERVIEW

         We are a global provider of engineering services including design,
build, drafting, technical publishing and documentation, and on-site engineering
support. Our customers include defense contractors, aerospace, automotive,
health care and manufacturing companies, including Lockheed Martin, General
Dynamics, General Electric, General Motors, Ford Motors, Magna, ABB and Hill-Rom
Company.

On December 12, 2001, the Securities and Exchange Commission issued FR-60,
Cautionary Advice Regarding Disclosure About Critical Accounting Policies, which
encourages additional disclosure with respect to a company's critical accounting
policies, the judgments and uncertainties that affect a company's application of
those policies, and the likelihood that materially different amounts would be
reported under different conditions and using different assumptions.

         Management is required to make certain estimates and assumptions during
the preparation of the consolidated financial statements in accordance with
GAAP. These estimates and assumptions impact the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities as of the date
of the consolidated financial statements. They also impact the reported amount
of net earnings during any period. Actual results could differ from those
estimates. Certain of our accounting policies and estimates have a more
significant impact on our financial statements than others, due to the magnitude
of the underlying financial statement elements.

CONSOLIDATION

         Our determination of the appropriate accounting method with respect to
our investments in subsidiaries is based on the amount of control we have,
combined with our ownership level, in the underlying entity. Our consolidated
financial statements include the accounts of our parent company and our
wholly-owned subsidiaries. All of our investments are accounted for on the cost
method. If we had the ability to exercise significant influence over operating
and financial policies of a company, but did not control such company, we would
account for these investments on the equity method.

         Accounting for an investment as either consolidated or by the equity
method would have no impact on our net income (loss) or stockholders' equity in
any accounting period, but would impact individual income statement and balance
sheet items, as consolidation would effectively "gross up" our income statement
and balance sheet. However, if control aspects of an investment accounted for by
the cost method were different, it could result in us being required to account
for an investment by consolidation or the equity method. Under the cost method,
the investor only records its share of the investee's earnings to the extent
that it receives dividends from the investee; when the dividends received exceed
the investee's earnings subsequent to the date of the investor's investment, the
investor records a reduction in the basis of its investment. Under the cost
method, the investor does not record its share of losses of the investee.
Conversely, under either consolidation or equity method accounting, the investor
effectively records its share of the investee's net income or loss, to the
extent of its investment or its guarantees of the investee's debt.

         At June 30, 2003, all of our investments in non-related companies
totaling $45,669 were accounted for using the cost method. Accounting for an
investment under either the equity or cost method has no impact on evaluation of
impairment of the underlying investment; under either method, impairment losses
are recognized upon evidence of permanent losses of value.



                                      -2-
<PAGE>


Revenue Recognition

         We recognize revenue in accordance with Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements, which has four basic criteria
that must be met before revenue is recognized:

- Existence of persuasive evidence that an arrangement exists; - Delivery has
occurred or services have been rendered; - The seller's price to the buyer is
fixed and determinable; and, - Collectibility is reasonably assured.

         Our various revenue recognition policies are consistent with these
criteria. We have developed proprietary technology in two areas: human capital
management and Web development. Njoyn is a Web-based human capital management
system that automates and manages the hiring process. The revenue associated
with providing this software is allocated to an initial set-up fee,
customization and training fees as agreed with the customer and an ongoing
monthly per user fee. The allocation of revenue to the various elements is based
on our determination of the fair value of the elements as if they had been sold
separately. The set-up fee and customization revenue is recognized upon delivery
of access to the software with customization completed in accordance with
milestones determined by the contract. Revenue for the training is recorded as
the services are rendered and the ongoing monthly fee is recorded each calendar
month. There is no additional fee charged to customers for hosting.

         Effective March 8, 2002, we sold our technology division, Njoyn
Software Incorporated to Cognicase Inc., a Canadian company. As part of the
transaction, Cognicase assumed all of the (eight employees) staff in our
technology division. As a result of the sale to Cognicase, we will not have
future revenues from Njoyn and the operations have been reported as
discontinued.

         Our other proprietary technology, SecondWave, is a Web development
product that allows companies to create, manage and automate their own dynamic,
adaptive Web sites. The software learns from each visitor's behavior and targets
his or her needs and interests with customized content and communications. We
enter into contracts for the customization or development of SecondWave in
accordance with the specifications of our customers. The project plan defines
milestones to be accomplished and the costs associated with this project. These
amounts are billed as they are accomplished and revenue is recognized as the
milestones are reached. The work in progress for costs incurred beyond the last
accomplished milestone is reflected at the period end. To date these amounts
have not been material and have not been set up at the period ends. The
contracts do not include any post-contract customer support. Additional customer
support services are provided at standard daily rates, as services are required.

         As a result of the sale of Njoyn to Cognicase Inc. and their assumption
of all of our technology staff, we will no longer have future revenues from
SecondWave Inc. and the operations have also been reported as discontinued.


Carrying Value Goodwill and Intangible Assets

         Prior to January 1, 2002, our goodwill and intangible assets were
accounted for in accordance with Statement of Financial Accounting Standards No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of. This statement required us to evaluate the carrying
value of our goodwill and intangible assets upon the presence of indicators of
impairment. Impairment losses were recorded when estimates of undiscounted
future cash flows were less than the value of the underlying asset. The
determination of future cash flows or fair value was based upon assumptions and
estimates of forecasted financial information that may differ from actual
results. If different assumptions and estimates were used, carrying values could
be adversely impacted, resulting in write downs that would adversely affect our
earnings. In addition, we amortized our goodwill balances on a straight-line
basis over 30 years. The evaluation of the useful life of goodwill required our
judgment, and had we chosen a shorter time period over which to amortize
goodwill, amortization expense would have increased, adversely impacting our
operations.

         Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets. This statement requires
us to evaluate the carrying value of goodwill and intangible assets based on
assumptions and estimates of fair value and future cash flow information. These
assumptions and estimates may differ from actual results. If different
assumptions and estimates are used, carrying values could be adversely impacted,
resulting in write downs that could adversely affect our earnings.



                                      -3-
<PAGE>


         During the third quarter of 2002, we completed our transitional
goodwill impairment test as of December 31, 2001 and determined that no
adjustment to the carrying value of goodwill was needed.

         The IT recruitment unit was tested for impairment in the third quarter
of 2002, after the annual forecasting process. Due to a decrease in margins and
the loss of key sales personnel, operating profits and cash flows were lower
than expected in the first nine months of 2002. Based on that trend, the
earnings forecast for the next two years was revised. At September 30, 2002, we
recognized a goodwill impairment loss of $57,808 in the IT recruitment unit. The
fair value of that reporting unit was estimated using the expected present value
of future cash flows.

         During the fourth quarter of 2002, the IT recruitment unit experienced
further decline, indicating impairment. The fair value of the unit was estimated
using the expected present value of future cash flows. At December 31, 2002, a
further goodwill impairment loss of $87,589 was recognized.

          The Technical Publications and Engineering unit was also tested for
impairment in the fourth quarter of 2002, as operating profits, cash flows and
forecasts were lower than expected. At December 31, 2002, a goodwill impairment
loss of $1,234,962 was recognized. The fair value of that reporting unit was
estimated using the expected present value of future cash flows.

          On an ongoing basis, absent any impairment indicators, we expect to
perform a goodwill impairment test as of the end of the third quarter during the
fourth quarter of each year.

         The books and records of our Canadian operations are recorded in
Canadian dollars. For purposes of financial statement presentation, we convert
balance sheet data to United States dollars using the exchange rate in effect at
the balance sheet date. Income and expense accounts are translated using an
average exchange rate prevailing during the relevant reporting period. There can
be no assurance that we would have been able to exchange currency on the rates
used in these calculations. We do not engage in exchange rate-hedging
transactions. A material change in exchange rates between United States and
Canadian dollars could have a material effect on our reported results.


THE THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2002

Revenue

          For the three months ended June 30, 2003, we derived 95% of our
revenue in the United States compared to 100% for the three months ended June
30, 2002. The decrease in total revenue derived from the United States is a
result of the slight increase in engineering sales in Canada. At the beginning
of this year, a division was started to focus on building engineering services
in Ontario in lieu of IT recruitment services which had traditionally dominated
our sales in Canada.

               As a result of this shift in focus, effective June 27, 2003, we
sold certain assets of our IT recruitment division to Brainhunter.com, an
Ontario company, for for a nominal amount of cash and the assumption of all
employee liabilities. The gain on disposal of $190,627 has been reflected in the
Income (loss) from discontinued operations in 2003. As a result of this
transaction, the Company will not have future revenues from its IT recruitment
division and therefore the operations have been reported as discontinued.

         For the three months ended June 30, 2003, our primary source of revenue
was engineering services including engineering design and build, technical
publications and documentation and on-site engineering support. Engineering
services represented 96% of total revenue compared to 86% for the three months
ended June 30, 2002. Revenue from engineering services for the three months
ended June 30, 2003 decreased by $640,000 or 21% to $2,370,000 compared to
$3,010,000 for the three months ended June 30, 2002. The decrease in engineering
sales is a result of the reduction of the sales force for this division.



                                      -4-
<PAGE>


         Our engineering services include the complete planning, staffing,
development, design, implementation and testing of a project. It can also
involve enterprise-level planning and project anticipation. Our specialized
engineering services include: design, build and drafting, technical publications
and documentation. We outsource our technical publications and engineering
services on both a time and materials and project basis. For project work, the
services provided are defined by guidelines to be accomplished by milestone and
revenue is recognized upon the accomplishment of the relevant milestone. As
services are rendered, the costs incurred are reflected as Work in Progress.
Revenue is recognized upon the persuasive evidence of an agreement, delivery of
the service, and when the fee is fixed or determinable and collection is
probable. Customers we provide engineering services to include General Dynamics,
General Electric, General Motors, Lockheed Martin, Boeing, Caterpillar, Cummins
Engines, Magna and ABB.

         For the three months ended June 30, 2003, information technology
documentation services represented approximately 4% of our revenue compared to
14% for the three months ended June 30, 2002. Revenue from information
technology documentation services for the three months ended June 30, 2003
decreased by $400,000 or 80% to $100,000 compared to $500,000 for the three
months ended June 30, 2002.

         The substantial decrease in revenue from information technology
documentation services is primarily due to the loss of sales personnel and the
general economic slowdown in this industry. This division offers a very
specialized service, and relied on several key customers in a very localized
market. Many of these customers have either cancelled projects or have put a
number of their projects on hold. In response to these conditions, we terminated
the staff in this division and transferred the existing contracts to another
office.

         We provide outsourced information technology documentation services in
two ways: complete project management and the provision of skilled project
resources to supplement a customer's internal capabilities. Revenue is
recognized on the same basis as technical publications and engineering
outsourcing services. Selected information technology documentation services
customers include Fidelity Investments, SMD Tech Aid Corporation, CDI
Corporation, and the Gillette Company.


Gross Profit

         Gross profit is calculated by subtracting all direct costs from net
revenue. The direct costs of engineering services include wages, benefits,
software training and project expenses. The average gross profit for the
engineering division was 34% for the three months ended June 30, 2003 compared
to 33% for the three months ended June 30, 2002. The increase in gross profit
for technical publications and engineering services is a result of the increase
in higher margin contracts in engineering design, technical publications and
documentation compared to the traditional on-site engineering support. In
addition, we are engaging in more time-and-materials based contracts versus
fixed-cost contracts which prevents against project and costs overruns.

         The direct costs of information technology documentation services
include contractor wages, benefits, and project expenses. The average gross
profit for the information technology division for the three months ended June
30, 2003 was 21% compared to 25% for the three months ended June 30, 2002. The
decline in gross profit in the current period is a result of the decrease in
higher margin permanent placements and increase in lower margin contract
placements of documentation specialists.



THE SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 2002

Revenue

          For the six months ended June 30, 2003, we derived 97% of our revenue
in the United States compared to 100% for the six months ended June 30, 2002.
The decrease in total revenue derived from the United States is a result of the
aforementioned slight increase in engineering sales in Canada.

         For the six months ended June 30, 2003, our primary source of revenue
was engineering services including engineering design and build, technical
publications and documentation and on-site engineering support. Engineering
services represented 95% of total revenue compared to 87% for the six months
ended June 30, 2002. Revenue from engineering services for the six months ended
June 30, 2003 decreased by $1,430,000 or 23% to $4,730,000 compared to
$6,160,000 for the six months ended June 30, 2002. The decrease in engineering
sales is a result of the reduction of the sales force for this division.



                                      -5-
<PAGE>


         For the six months ended June 30, 2003, information technology
documentation services represented approximately 5% of our revenue compared to
13% for the six months ended June 30, 2002. Revenue from information technology
documentation services for the six months ended June 30, 2003 decreased by
$680,000 or 75% to $230,000 compared to $910,000 for the six months ended June
30, 2002.

         The substantial decrease in revenue from information technology
documentation services is primarily due to the loss of sales personnel and the
general economic slowdown in this industry. This division offers a very
specialized service, and relied on several key customers in a very localized
market. Many of these customers have either cancelled projects or have put a
number of their projects on hold. In response to these conditions, we terminated
the staff in this division and transferred the existing contracts to another
office.


Gross Profit

         The average gross profit for the engineering division was 32% for the
six months ended June 30, 2003 which is consistent with the six months ended
June 30, 2002.

         The average gross profit for the information technology division for
the six months ended June 30, 2003 was 20% compared to 26% for the six months
ended June 30, 2002. The decline in gross profit in the current period is a
result of the decrease in higher margin permanent placements and increase in
lower margin contract placements of documentation specialists.











                                      -6-
<PAGE>


RESULTS OF OPERATIONS




                          STATEMENTS OF OPERATIONS--PERCENTAGES
                                    (UNAUDITED)

                                           THREE MONTHS          SIX MONTHS
                                          ENDED JUNE 30,       ENDED JUNE 30,
                                          --------------      ---------------

                                          2003      2002      2003       2002
                                          ----      ----      ----       ----


REVENUE                                   100 %      100 %     100 %      100 %
-------                                  ----       ----      ----       ----

COST OF SALES                              65 %       69 %      68 %       68 %
                                         ----       ----      ----       ----
GROSS PROFIT                               35 %       31 %      32 %       32 %
                                         ----       ----      ----       ----
EXPENSES
   Administrative                          22 %       23 %      24 %       22 %
   Selling                                 10 %       18 %      10 %       19 %
   Depreciation and amortization            7 %        8 %       8 %        8 %
                                         ----       ----      ----       ----

Income (loss) from continuing
  operations before interest charges       (4)%      (18)%     (10)%      (17)%

  Interest charges                         32 %        6 %     102 %        6 %
                                         ----       ----      ----       ----
Income (loss) from continuing
  operations                              (36)%      (24)%    (112)%      (23)%

   Income taxes                            -- %       -- %      -- %       -- %
                                         ----       ----      ----       ----
Income (loss) from continuing
  operations                              (36)%      (24)%    (112)%      (23)%

Income (loss) from discontinued
  operations                               11 %        9 %       6 %        8 %

Net Income (loss)                         (25)%      (15)%    (106)%      (15)%
                                         ----       ----      ----       ----




                                      -7-
<PAGE>



THE THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2002

Results of Operations

          Revenue. Revenue for the three months ended June 30, 2003 decreased by
$1,040,000 or 30%, to $2,470,000, as compared to $3,510,000 for the three months
ended June 30, 2002. The decrease is primarily attributable to the reduction in
sales staff as a result of our cost cutting initiatives undertaken in 2002 and
early 2003.

         Cost of Sales. The cost of sales for the three months ended June 30,
2003 decreased by $780,000, or 33%, to $1,620,000, as compared to $2,400,000 for
the three months ended June 30, 2002. The decrease in cost of sales for the
three months ended June 30, 2003 is consistent with the decrease in revenue. The
cost of sales as a percentage of revenue decreased from 69% for the three months
ended June 30, 2002 to 65% for the three months ended June 30, 2003.

         Gross Profit. Gross profit for the three months ended June 30, 2003
decreased by $240,000, or 22%, to $860,000 compared to $1,100,000 for the three
months ended June 30, 2002. The decrease in gross profit for the three months
ended June 30, 2003 is consistent with the decrease in revenue. As a percentage
of revenue, gross profit increased from 31% for the three months ended June 30,
2002 to 35% for the three months ended June 30, 2003.

         Expenses. Expenses for the three months ended June 30, 2003 decreased
by $790,000, or 46%, to $940,000 compared to $1,730,000 for the three months
ended June 30, 2002.

         Administrative expenses decreased by $250,000 or 32% to $540,000 for
the three months ended June 30, 2003 compared to $790,000 for the three months
ended June 30, 2002. General administrative expenses including salaries and rent
have decreased significantly over last year as a result of restructuring and
general cost cutting.

         Selling expenses for the three months ended June 30, 2003 decreased by
$420,000, or 63%, to $250,000 from $670,000 for the three months ended June 30,
2002. This decrease is attributable to the considerable downsizing in sales
staff and the decrease in commissions, as a result of the reduction in sales. In
addition, in 2003 we continued to eliminate certain advertising and promotional
expenses.

        For the three months ended June 30, 2003, depreciation and amortization
expenses decreased by $80,000, or 30%, to $190,000 from $270,000 for the three
months ended June 30, 2002.

          0perating Loss from Continuing Operations. For the three months ended
June 30, 2003, losses from continuing operations decreased by $500,000 or 81% to
a loss of $120,000 as compared to a loss of $620,000 for the three months ended
June 30, 2002.

         Interest Charges. For the three months ended June 30, 2003, interest
charges increased by $580,000, or 263%, to $800,000 from $220,000 for the three
months ended June 30, 2002. This increase is largely attributable to the
interest expense on the beneficial conversion feature on the convertible
debentures issued in December 2002 and the first six months of 2003, in the
amount of $640,000.

         Loss from Continuing Operations before Income Tax. Loss from continuing
operations before income tax for the three months ended June 30, 2003 increased
by $80,000 or 9% to a loss of $920,000 as compared to a loss of $840,000 for the
three months ended June 30, 2002.

         Income Taxes. Income tax expense for the three months ended June 30,
2003 increased by $8,300 to an expense of $8,400 as compared to an expense of
$100 for the three months ended June 30, 2002.

         Income (Loss) from Continuing Operations. Loss from continuing
operations for the three months ended June 30, 2003 increased by $90,000 or 11%
to a loss of $930,000 compared to a loss of $840,000 for the three months ended
June 30, 2002

         Income (Loss) from Discontinued Operations. Operations of the
technology, training and IT recruitment divisions have been reported as
discontinued for the three months ended June 30, 2003 and 2002.




                                      -8-
<PAGE>


          Effective March 8, 2002, we sold our technology division, Njoyn
Software Incorporated to Cognicase Inc., a Canadian company. Net proceeds after
broker fees were $1,350,000 of which we received $800,000 in cash and $550,000
worth of unrestricted common shares on closing. The shares were sold on March
11, 2002 for value of $524,673. As part of the transaction, Cognicase assumed
all of the staff in our technology division, including the employees of
TidalBeach Inc. We will not have future revenues from either the Njoyn or
SecondWave products.

         There was no technology revenue for the three months ended June 30,
2003 and 2002. The operating loss from the technology division for the three
months ended June 30, 2003 was $9,000 and $15,000 for the same period in 2002.
On disposal, Njoyn had approximately $950,000 in assets consisting primarily of
deferred development charges and approximately $30,000 in liabilities consisting
primarily of capital lease obligations. The gain on disposal of $400,229 has
been reflected in the loss from discontinued operations at June 30, 2002. No
income taxes have been reflected on this disposition as the sale of the shares
gives rise to a capital loss, the benefit of which is more likely than not to be
realized.

         Effective May 1, 2002, we signed an agreement with triOS Training
Centres Limited, an Ontario company, for the sale of certain assets of the
Toronto training division, Thinkpath Training for a nominal amount of cash and
the assumption of all prepaid training liabilities. As part of the transaction,
triOS assumed the Toronto training staff and is subletting the classroom
facilities.

         On November 1, 2002, we entered into a series of agreements with
Thinkpath Training LLC, a New York company, for the sale of certain assets of
the New York training division, Thinkpath Training for a nominal amount of cash
and the assumption of all prepaid training liabilities. As part of the
transaction, Thinkpath Training LLC assumed the New York training staff, some
assets and is subletting the classroom facilities.

          As a result of these two transactions, we will not have future
revenues from either training division. Training revenue for the three months
ended June 30, 2003 was $90,000 and $490,000 for the same period in 2002. The
operating income from the training division for the three months ended June 30,
2003 was $70,000 and $200,000 for the same period in 2002.

           Effective June 27, 2003, we signed an agreement with Brainhunter.com
Ltd., an Ontario company, for the purchase of certain assets of the Toronto IT
recruitment division for a nominal amount of cash and the assumption of all
employee liabilities. The gain on disposal of $190,627 has been reflected in the
Income (loss) from discontinued operations in 2003. As a result of this
transaction, we will not have future revenues from the IT recruitment division
and therefore the operations have been reported as discontinued.

           IT recruitment revenue for the three months ended June 30, was
$630,000 in 2003 and $3,380,000 in 2002. The operating income from the IT
recruitment division for the three months ended June 30, was $30,000 in 2003 and
$50,000 in 2002.

         Net Loss Before Preferred Stock Dividends. Net loss before preferred
stock dividends for the three months ended June 30, 2003 increased by $140,000
or 27% to a net loss of $650,000 compared to a net loss of $510,000 for the
three months ended June 30, 2002.

         Net Loss Applicable to Common Stock. Net loss applicable to common
stock increased by $110,000 or 20% to $650,000 for the three months ended June
30, 2003 compared to $540,000 for the three months ended June 30, 2002. During
the three months ended June 30, 2002 we issued preferred stock dividends of
$30,000.



THE SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 2002

Results of Operations

          Revenue. Revenue for the six months ended June 30, 2003 decreased by
$2,100,000 or 30%, to $4,960,000, as compared to $7,060,000 for the six months
ended June 30, 2002. The decrease is primarily attributable to the reduction in
sales staff as a result of our cost cutting initiatives undertaken in 2002 and
early 2003.

         Cost of Sales. The cost of sales for the six months ended June 30, 2003
decreased by $1,440,000, or 30%, to $3,380,000, as compared to $4,820,000 for
the six months ended June 30, 2002. The decrease in cost of sales for the six
months ended June 30, 2003 is consistent with the decrease in revenue. The cost
of sales as a percentage of revenue for the six months ended June 30, 2003 was
68% which is consistent with the six months ended June 30, 2002.



                                      -9-
<PAGE>


         Gross Profit. Gross profit for the six months ended June 30, 2003
decreased by $660,000, or 30%, to $1,580,000 compared to $2,240,000 for the six
months ended June 30, 2002. The decrease in gross profit for the six months
ended June 30, 2003 is consistent with the decrease in revenue. As a percentage
of revenue, gross profit for the six months ended June 30, 2003 was 32% which is
consistent with the six months ended June 30, 2002.

         Expenses. Expenses for the six months ended June 30, 2003 decreased by
$1,340,000, or 40%, to $2,030,000 compared to $3,370,000 for the six months
ended June 30, 2002.

         Administrative expenses decreased by $350,000 or 23% to $1,190,000 for
the six months ended June 30, 2003 compared to $1,540,000 for the six months
ended June 30, 2002. General administrative expenses including salaries and rent
have decreased significantly over last year as a result of restructuring and
general cost cutting. Included in administrative expenses are the costs of
$226,500 of shares of our common stock and warrants issued to various
consultants for financing services rendered during the six months ended June 30,
2003.

         Selling expenses for the six months ended June 30, 2003 decreased by
$810,000 or 62%, to $500,000 from $1,310,000 for the six months ended June 30,
2002. This decrease is attributable to the considerable downsizing in sales
staff and the decrease in commissions, as a result of the reduction in sales. In
addition, in 2003 we continued to eliminate certain advertising and promotional
expenses.

        For the six months ended June 30, 2003, depreciation and amortization
expenses decreased by $150,000, or 28%, to $380,000 from $530,000 for the six
months ended June 30, 2002.

          0perating Loss from Continuing Operations. For the six months ended
June 30, 2003, losses from continuing operations decreased by $630,000 or 56% to
a loss of $500,000 as compared to a loss of $1,130,000 for the six months ended
June 30, 2002.

         Interest Charges. For the six months ended June 30, 2003, interest
charges increased by $4,640,000, or 1054%, to $5,080,000 from $440,000 for the
six months ended June 30, 2002. This increase is largely attributable to the
interest expense on the beneficial conversion feature on the convertible
debentures issued in December 2002 and the first six months of 2003, in the
amount of $4,670,000.

         Loss from Continuing Operations before Income Tax. Loss from continuing
operations before income tax for the six months ended June 30, 2003 increased by
$3,990,000 or 253% to a loss of $5,570,000 as compared to a loss of $1,580,000
for the six months ended June 30, 2002.

         Income Taxes. Income tax expense for the six months ended June 30, 2003
increased by $37,000 to an expense of $12,000 as compared to a recovery of
$25,000 for the six months ended June 30, 2002.

         Income (Loss) from Continuing Operations. Loss from continuing
operations for the six months ended June 30, 2003 increased by $4,030,000 or
260% to a loss of $5,580,000 compared to a loss of $1,550,000 for the six months
ended June 30, 2002

         Income (Loss) from Discontinued Operations. Operations of the
technology, training and IT recruitment divisions have been reported as
discontinued for the six months ended June 30, 2003 and 2002.

          There was no technology revenue for the six months ended June 30, 2003
and $40,000 for the same period in 2002. The operating loss from the technology
division for the six months ended June 30, 2003 was $10,000 and $120,000 for the
same period in 2002.

           Training revenue for the six months ended June 30, 2003 was $160,000
and $880,000 for the same period in 2002. The operating income from the training
division for the six months ended June 30, 2003 was $90,000 and $40,000 for the
same period in 2002.

              IT recruitment revenue for the six months ended June 30, was
$1,430,000 in 2003 and $6,840,000 in 2002. The operating income from the IT
recruitment division for the six months ended June 30, was $10,000 in 2003 and
$130,000 in 2002.



                                      -10-
<PAGE>


         Net Loss Before Preferred Stock Dividends. Net loss before preferred
stock dividends for the six months ended June 30, 2003 increased by $4,290,000
or 425% to a net loss of $5,300,000 compared to a net loss of $1,010,000 for the
six months ended June 30, 2002.

         Net Loss Applicable to Common Stock. Net loss applicable to common
stock increased by $4,240,000 or 400% to $5,300,000 for the six months ended
June 30, 2003 compared to $1,060,000 for the six months ended June 30, 2002.
During the six months ended June 30, 2002 we issued preferred stock dividends of
$60,000.


LIQUIDITY AND CAPITAL RESOURCES

         With insufficient working capital from operations, our primary sources
of cash are a receivable discount facility with Morrison Financial Services
Limited and proceeds from the sale of equity securities. Our primary capital
requirements include debt service and working capital needs.

           Our facility with Morrison Financial Services Limited is a receivable
discount facility whereby we are able to borrow up to 75% of qualifying
receivables at 30% interest per annum. At June 30, 2003, the balance on the
receivable discount facility was approximately $1,210,000 based on 75% of
qualifying accounts receivable.

           During the six months ended June 30, 2003, we sold $575,000 in
convertible debentures along with 109,777,942 warrants pursuant to a financing
arrangement entered into on December 5, 2002. The debentures will become due
twelve months from the date of issuance. The investors will have the right to
acquire up to $575,000 worth of our common stock at a price the lesser of $.0175
or 50% of the average of the six lowest prices on six separate trading days
during the sixty-day trading period prior to conversion. The warrants are
exercisable at any time and in any amount for a period of seven years from
closing at purchase prices ranging from $.0175 to $.00137 per share. We are
required to pay interest to the debenture holder on the aggregate unconverted
and outstanding principal amount of the debenture at the rate of 12% per annum,
payable on each conversion date and maturity date in cash or shares of common
stock.

           The proceeds of $575,000 were allocated between the warrants and the
debenture without warrants on a pro rata basis. Paid in capital has been
credited by the value of the warrants in the amount of $321,167. At June 30,
2003, the value of the beneficial conversion feature on all issued convertible
debentures was determined to be $539,142 which was credited to paid in capital
and charged to earnings as interest expense.

         At June 30, 2003, we had cash of $580,000 and a working capital
deficiency of $2,470,000. At June 30, 2003, we had a cash flow from operations
of $100,000. At June 30, 2002, we had cash of $60,000 and a working capital
deficiency of $2,920,000. At June 30, 2002, we had a cash flow deficiency from
operations of $710,000.

         At June 30, 2003, we had cash flow from investing activities of $80,000
related to proceeds on the disposal of the IT recruitment division of $150,000
which was offset by the purchase of capital assets of $70,000. At June 30, 2002,
we had cash flow from investing activities of $1,100,000 primarily related to
the proceeds on the disposal of Njoyn of $1,320,000 which was partially offset
by the purchase of capital assets of $220,000.

         At June 30, 2003 we had cash flow from financing activities of $200,000
attributable primarily to a reduction in debt of $1,240,000 related to the
Morrison Financial receivable discount facility and partial repayment of notes
payable of $10,000 which was offset by proceeds of $1,450,000 from the sale of
convertible debentures. At June 30, 2002, we had a cash flow deficit from
financing activities of $825,000 attributable primarily to the repayment of
notes of $75,000, and long-term debt of $130,000 and reduction in bank
indebtedness of $620,000.

         At June 30, 2003, we had a loan balance of $37,878 with the Business
Development Bank of Canada. The loan was assigned to us when we combined with
TidalBeach Inc. in November 2000. The loan is secured by a general security
agreement with monthly payments of $950.00 and interest at 12.5% per annum. No
principal payments have been made since January 2003. On July 17, 2003, the BDC
accepted a one-time payment of $10,000 to settle the Tidalbeach obligation. The
discount amount of approximately $28,000 will be recognized as debt forgiveness
in the 3rd quarter.



                                      -11-
<PAGE>



        At June 30, 2003 we had a loan balance of $259,356 with an individual,
Terry Lyons. The loan is payable in twelve monthly payments of $21,613 beginning
November 30, 2002 and bears interest at 30% per annum. This loan is subordinated
to Morrison Financial Services Limited and no principal payments have been made.

         At June 30, 2003, we had approximately $98,835 outstanding on various
capital leases with various payment terms and interest rates. The average
balance on the terms of leases are 12 months and cover primarily the hardware
and various software applications required to support our engineering division.

         At June 30, 2003, we had a note payable of $224,000 owed to Roger
Walters, the former shareholder of CadCam Inc. Principal payments of $4,000 per
month were to begin September 1, 2002 until August 1, 2007. This loan is
non-interest bearing.

         The loan is subordinated to Morrison Financial Services Limited and the
12% Senior Secured Convertible Debenture holders. We have not made any principal
payments to Mr. Walters since December 2002 and we are currently in default of
the loan agreement. In the event that we default on payment, the principal
balance will bear interest at 12% per annum until payment is made.

         At June 30, 2003, we had a note payable of $663,818 owed to Denise
Dunne-Fushi, the vendor of MicroTech Professionals Inc. Principal payments of
$10,000 per month were to begin November 1, 2002 bearing 5% interest until
October 1, 2007. In addition, we are obligated to cover the monthly expense
associated with Ms. Dunne-Fushi's family health benefits until May 2004 and a
vehicle lease until August 2004.

          The loan is secured under a general security agreement but is
subordinated to Morrison Financial Services Limited and the 12% Senior Secured
Convertible Debenture holders. We have not made any principal payments to Ms.
Dunne-Fushi since December 2002 and are currently in default of the loan
agreement. In the event of default, Ms. Dunne-Fushi has the option of enforcing
the security she holds.

         Although we believe that our current working capital and cash flows
from restructured operations will be adequate to meet our anticipated cash
requirements going forward, we have accrued liabilities and potential
settlements of outstanding claims that may require additional funds. We will
have to raise these funds through equity or debt financing. There can be no
assurance that additional financing will be available at all or that if
available, such financing will be obtainable on terms favorable to us and would
not be dilutive.

         Despite our recurring losses and negative working capital, we believe
that we have developed a business plan that, if successfully implemented, could
substantially improve our operational results and financial condition. However,
we can give no assurances that our current cash flows from operations, if any,
borrowings available under our receivable discount facility, and proceeds from
the sale of securities, will be adequate to fund our expected operating and
capital needs for the next twelve months. The adequacy of our cash resources
over the next twelve months is primarily dependent on our operating results and
our ability to raise additional financing, which are subject to substantial
uncertainties. Cash flow from operations for the next twelve months will depend,
among other things, upon the effect of the current economic slowdown on our
sales and management's ability to implement our business plan. The failure to
return to profitability and optimize operating cash flow in the short term, and
to successfully raise additional financing, could have a material adverse effect
on our liquidity position and capital resources which may force us to curtail
our operations.


RECENT ACCOUNTING PRONOUNCEMENTS

         In April 2002, the FASB issued SFAS No. 145, which, among other
factors, changed the presentation of gains and losses on the extinguishments of
debt. Any gain or loss on extinguishments of debt that does not meet the
criteria in APB Opinion 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions", shall be included in operating
earnings and not presented separately as an extraordinary item. We will adopt
SFAS No. 145 at the beginning of fiscal year 2003 and do not expect the
provisions of SFAS No. 145 to have any impact on our financial position, results
of operations or cash flows.



                                      -12-
<PAGE>


       In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which addresses accounting for
restructuring and similar costs. SFAS No.146 supersedes previous accounting
guidance, principally Emerging Issues Task Force Issue, or EITF, No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit on Activity (including Certain Costs Incurred in a Restructuring)". We
will adopt the provisions of SFAS No. 146 for restructuring activities initiated
after December 31, 2002. SFAS No. 146 may affect the timing of recognizing
future restructuring costs as well as the amounts recognized.

        In January 2003, the FASB issued SFAS No. 148, Accounting for Stock
-Based Compensation - Transition and Disclosures. This statement provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement also amends the disclosure requirements of SFAS No. 123 to require
more prominent and frequent disclosures in the financial statements about the
effects of stock-based compensation. The transitional guidance and annual
disclosure provisions of this Statement is effective for the December 31, 2002
financial statements. The interim reporting disclosure requirements is effective
for our March 31, 2003 financial statements.

        In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("Interpretation"). This Interpretation
elaborates on the existing disclosure requirement for most guarantees including
loan guarantees, and clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair market value of the
obligations it assumes under that guarantee and must disclose that information
in its interim and annual financial statements. The initial recognition and
measurement provisions of the Interpretation apply on a prospective basis to
guarantees issued or modified after December 31, 2002.

        In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities," which
addresses consolidation by business enterprises of variable interest entities.
In general, a variable interest entity is a corporation, partnership, trust, or
any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
A variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in research and development or other
activities on behalf of another company. The objective of Interpretation No. 46
is not to restrict the use of variable interest entities but to improve
financial reporting by companies involved with variable interest entities. Until
now, a company generally has included another entity in its consolidated
financial statements only if it controlled the entity through voting interests.
Interpretation No. 46 changes that by requiring a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. The consolidation
requirements of Interpretation No. 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements apply to
entities created before January 31, 2003, in the first fiscal year or interim
period beginning after June 15, 2003. Certain of the disclosure requirements
apply in all financial statements issued after January 31, 2003, regardless of
when the variable interest entity was established. We do not have any variable
interest entities, and, accordingly, adoption is not expected to have a material
effect on our financial position, results of operations or cash flows.

        In April 2003, the Financial Accounting Standards Board issued Statement
No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities". The Statement amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under Statement 133. The amendments set
forth in Statement 149 improve financial reporting by requiring that contracts
with comparable characteristics be accounted for similarly. In particular, this
Statement clarifies under what circumstances a contract with an initial net
investment meets the characteristic of a derivative as discussed in Statement
133. In addition, it clarifies when a derivative contains a financing component
that warrants special reporting in the statement of cash flows. This Statement
is effective for contracts entered into or modified after June 30, 2003 with
certain exceptions. We do not believe that the adoption of Statement No. 149
will have a material effect on our financial position, results of operations or
cash flows.




                                      -13-
<PAGE>

         In May 2003, the Financial Accounting Standards Board issued Statement
No. 150, "Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity". The Statement specifies that certain instruments
within its scope embody obligations of the issuer and that, therefore, the
issuer must classify them as liabilities. This Statement is effective
immediately for all financial instruments entered into or modified after May 31,
2003. For all other instruments, the Statement goes into effect at the beginning
of the first interim period beginning after June 15, 2003. For contracts that
were created or modified before May 31, 2003 and still exist at the beginning of
the first interim period beginning after June 30, 2003, entities should record
the transition to Statement No. 150 by reporting the cumulative effect of a
change in an accounting principle. Statement No. 150 prohibits entities from
restating financial statements for earlier years presented. We do not believe
that the adoption of Statement No. 150 will have a material effect on our
financial position, results of operations or cash flows.


RECENT EVENTS

         Subsequent to June 30, 2003, we closed an additional $200,000 in
convertible debentures together with 123,588,851 warrants. The funds were used
for various debt settlements and working capital. The debentures will become due
twelve months from the date of issuance. The investors will have the right to
acquire up to $200,000 worth of our common stock at a price the lesser of $.0175
or 50% of the average of the six lowest prices on six separate trading days
during the sixty-day trading period prior to conversion. The warrants are
exercisable at any time and in any amount for a period of 7 years from the
original purchase date at purchase prices ranging from $.0175 to $.00137 per
share. We are required to pay interest to the debenture holder on the aggregate
unconverted and outstanding principal amount of the debenture at the rate of 12%
per annum, payable on each conversion date and maturity date in cash or shares
of common stock.

         The proceeds received were allocated between the warrants and the
debenture without warrants on a pro rata basis. Paid in capital has been
credited by the value of the warrants.

         As of August 14, 2003, we have issued 452,096,517 shares of our common
stock upon to the convertible debenture holders upon the conversion of $945,900
of debentures and accrued interest.

             At June 30, 2003 we had a loan balance with the Business
Development Bank of Canada ("BDC") of $38,000. The loan was assigned to us when
we purchased Tidalbeach Inc. in November 2000. The loan was secured by a general
security agreement with monthly payments of $950 and interest at 12.5% per
annum. No principal payments had been made since January 2003. On July 17, 2003,
the BDC accepted a one-time payment of $10,000 to settle the Tidalbeach
obligation. The discount amount of approximately $28,000 will be recognized as
debt forgiveness in the third quarter.

               On July 29, 2003, we entered into a settlement agreement with
Christopher Killarney, a former employee, in the sum of $3,600. This settlement
was pursuant to a claim filed against us on June 14, 2002, with the Superior
Court of Justice of Ontario, Canada, Court File No. 02- CV-229385CMS, alleging
wrongful dismissal and breach of contract. Mr. Killarney was seeking $650,000 in
damages plus attorney's fees.


         On August 7, 2003, we entered into a settlement agreement with AT&T
Corp. in the sum of $15,000. This settlement was pursuant to a claim filed
against us by AT&T Corp. with the United States District Court for the Southern
District of New York, No. 02 CV 3132, alleging that we breached an agreement to
pay AT&T certain monies in exchange for Internet and web hosting services
purportedly performed by AT&T. AT&T was seeking $153,669.36 in damages, plus
interest and attorneys' fees.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Not applicable.


ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

Our Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-14(c) and 15d-14(c) under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act")) as of a date within 45 days prior to the filing
date of this Form 10-Q filed for the six months ended June 30, 2003 (the
"Evaluation Date"). Based on such evaluation, such officers have concluded that,
as of the Evaluation Date, our disclosure controls and procedures are effective
in alerting the officers on a timely basis to material information relating to
us (including our wholly owned subsidiaries) required to be included in our
reports filed or submitted under the Exchange Act.

(b) Changes in Internal Controls.

Since the Evaluation Date, there have not been any significant changes in our
internal controls or in other factors that could significantly affect such
controls.




                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         We are party to the following pending legal proceedings:


          The Canadian Imperial Bank of Commerce ("CIBC") filed a statement of
claim against one of our subsidiaries, Thinkpath Training Inc., on June 12,
2003, with the Superior Court of Justice of Ontario, Canada, Court File No.
41967, demanding payment of liquidated damages in the sum of approximately
$150,000 pursuant to an operating account overdraft balance. The CIBC is seeking
repayment of the overdraft, accrued interest and legal fees. We intend to defend
this claim vigorously.


         We are not party to any other material litigation, pending or
otherwise.



ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

             During the second quarter 2003, we sold convertible debentures and
warrants for an aggregate of $575,000. The debt is convertible into common stock
at a discount to the market. In connection with the offering, we issued an
aggregate of 109,777,942 warrants to purchase common stock. Pursuant to the
terms of the initial offering as reported in the Form 8-K that we filed with the
SEC on December 9, 2002, investors in that offering were granted the right to
purchase an additional $2,200,000 of convertible debt. As a result of the sales
made during the second quarter of 2003, convertible debentures and warrants for
an aggregate dollar amount of $650,000 remain available for purchase by the
investors as at June 30, 2003. The proceeds from the sale of convertible
debentures and warrants were used to repay debt obligations and for working
capital. The offering, which was made to non-U.S. residents only, was exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act") pursuant to Regulation S promulgated thereunder.

         In addition, during the second quarter 2003, we sold unregistered
securities as described below. There were no underwriters involved in the
transactions and there were no underwriting discounts or commissions paid in
connection therewith, except as disclosed below. The purchasers of the
securities in such transactions represented their intention to acquire the
securities for investment purposes only and not with a view to or for sales in
connection with any distribution thereof and appropriate legends were affixed to
the certificates for the securities issued in such transactions. The purchasers
of the securities in the transactions below were each sophisticated investors
who were provided information about us and were able to bear the risk of loss of
their entire investment.

          On May 27, 2003, we issued 1,067,624 shares of our common stock, no
par value per share, to John Taylor, an employee, in settlement of an employment
bonus.

              We believe all of the above issuances were exempt from
registration pursuant to the exemption provided by Section 4(2) of the
Securities Act.




ITEM 3. DEFAULTS IN SENIOR SECURITIES

         None.

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

         There were no matters submitted to a vote of security holders during
the six months ended June 30, 2003.


ITEM 5.  OTHER INFORMATION


         None.





                                      -14-
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         Exhibit 31.1 - Certification pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

         Exhibit 31.2 - Certification pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K.









                                      -15-
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                               THINKPATH INC.


      Dated: August 14, 2003 By: /s/ Declan French By: /s/ Kelly Hankinson
                             ---------------------       -----------------------
                             Declan French               Kelly L. Hankinson
                             Chief Executive Officer     Chief Financial Officer
















                                      -16-
<PAGE>