UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005
                                       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 22, 2005 THERE WERE 4,737,535 SHARES OF COMMON
                   STOCK, NO PAR VALUE PER SHARE, OUTSTANDING.




<PAGE>


                                 THINKPATH INC.

                  JUNE 30, 2005 QUARTERLY REPORT ON FORM 10-QSB

                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION
                                                                     Page Number


Item 1.  Financial Statements

         Interim Consolidated Balance Sheets as of June 30, 2005 and
         December 31, 2004..................................................F-1
         Interim Consolidated Statements of Operations for the three and six
         months ended June 30, 2005 and 2004................................F-3
         Interim Consolidated Statements of Changes in Stockholders' Equity
         for the six months ended June 30, 2005 and the year ended
         December 31, 2004..................................................F-4
         Interim Consolidated Statements of Cash Flows for the six months
         ended June 30, 2005 and 2004.......................................F-5
         Notes to Interim Consolidated Financial Statements.................F-6

Item 2.  Management's Discussion and Analysis or Plan of Operation............2

Item 3.  Controls and Procedures.............................................16


                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings ..................................................16

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.........16

Item 3.  Defaults Upon Senior Securities ....................................17

Item 4.  Submission of Matters to a Vote of Security Holders ................17

Item 5.  Other Information ..................................................18

Item 6.  Exhibits and Reports on Form 8-K ...................................18


<PAGE>


ITEM 1.  FINANCIAL STATEMENTS

                                 THINKPATH INC.

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               AS OF JUNE 30, 2005
                                   (UNAUDITED)

                        (AMOUNTS EXPRESSED IN US DOLLARS)














<PAGE>

<TABLE>
<CAPTION>

THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2005 (UNAUDITED) AND DECEMBER 31, 2004
(AMOUNTS EXPRESSED IN US DOLLARS)



                                                   30-JUN-05          31-DEC-04
                                                   ---------          ---------
                                                   $                  $
                                     ASSETS
CURRENT ASSETS
<S>                                           <C>                <C>
     Cash                                            607,437            180,121
     Accounts receivable                           2,715,520          2,243,513
     Prepaid expenses                                180,250             88,403
                                                   ---------         ----------

                                                   3,503,207          2,512,037

PROPERTY AND EQUIPMENT                               550,539            494,003

GOODWILL                                           3,967,243          3,748,732

OTHER ASSETS                                         370,715             61,562
                                                   ---------         ----------

                                                   8,391,704          6,816,334
                                                  ==========         ==========







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




                                      F-1
<PAGE>

<TABLE>
<CAPTION>


THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2005 (UNAUDITED) AND DECEMBER 31, 2004
(AMOUNTS EXPRESSED IN US DOLLARS)




                                                          30-JUN-05           31-DEC-04
                                                          ---------           ---------
                                                          $                   $
                                       LIABILITIES
CURRENT LIABILITIES
<S>                                                     <C>            <C>
     Receivable Discount Facility                                  --        723,995
     Laurus Funds                                           1,214,081             --
     Accounts payable                                       1,627,646      1,257,799
     Current portion of long-term debt                        116,495         85,099
     12% Convertible Debentures                                    --        566,653
                                                          -----------    -----------

                                                            2,958,222      2,633,546

LONG-TERM DEBT                                                138,678        182,837
                                                          -----------    -----------

                                                            3,096,900      2,816,383
                                                          ===========    ===========

COMMITMENTS AND CONTINGENCIES (NOTE 21)

                                   STOCKHOLDERS' EQUITY


CAPITAL STOCK                                              51,801,313     49,531,299

DEFICIT                                                   (45,170,552)   (44,204,935)

ACCUMULATED OTHER COMPREHENSIVE LOSS                       (1,335,957)    (1,326,413)
                                                          -----------    -----------

                                                            5,294,804      3,999,951
                                                          -----------    -----------

                                                            8,391,704      6,816,334
                                                          ===========    ===========







          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, 2005 AND 2004
(AMOUNTS EXPRESSED IN US DOLLARS)



                                            Three Months Ended June 30, Six Months Ended June 30,
                                                2005          2004         2005          2004
                                                ----          ----         ----          ----
                                                        $                          $

<S>                                          <C>           <C>           <C>           <C>
REVENUE                                      3,603,870     3,325,184     7,206,809     6,381,885

COST OF SERVICES                             2,535,022     2,050,188     4,865,792     4,107,616
                                             ---------     ---------     ---------     ---------

GROSS PROFIT                                 1,068,848     1,274,996     2,341,017     2,274,269
                                             ---------     ---------     ---------     ---------

EXPENSES
     Administrative                            655,119       579,321     1,244,153     1,152,726
     Selling                                   325,085       346,235       693,119       659,151
     Depreciation and amortization              85,731       138,750       167,269       281,016
     Write down of property and equipment         --            --           3,851          --
     Debt forgiveness                          (66,150)         --         (66,150)         --
                                             ---------     ---------     ---------     ---------
                                               999,785     1,064,306     2,042,242     2,092,893

INCOME (LOSS) FROM CONTINUING OPERATIONS
     BEFORE INTEREST CHARGES                    69,063       210,690       298,775       181,376

     Interest Charges                          849,783     1,028,551     1,212,546     1,777,495
                                             ---------     ---------     ---------     ---------

LOSS FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES                      (780,720)     (817,861)     (913,771)   (1,596,119)

     Income Taxes                               63,502         3,208        70,942         4,476
                                             ---------     ---------     ---------     ---------

LOSS FROM CONTINUING OPERATIONS               (844,222)     (821,069)     (984,713)   (1,600,595)

INCOME (LOSS) FROM DISCONTINUED
     OPERATIONS                                 23,693       (14,319)       19,096       (27,023)

NET LOSS                                      (820,529)     (835,388)     (965,617)   (1,627,618)
                                             =========     =========      ========    ==========

WEIGHTED AVERAGE NUMBER OF
     COMMON STOCK OUTSTANDING
     BASIC AND DILUTED*                      4,000,971       712,614     3,665,040       698,550
                                             =========     =========      ========    ==========

LOSS FROM CONTINUING OPERATIONS
     PER WEIGHTED AVERAGE COMMON
     STOCK BASIC AND DILUTED                     (0.21)        (1.15)        (0.27)        (2.29)
                                             =========     =========      ========    ==========




<FN>
* Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005
</FN>


</TABLE>


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



                                      F-3
<PAGE>

<TABLE>
<CAPTION>

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND THE YEAR ENDED DECEMBER 2004
(AMOUNTS EXPRESSED IN US DOLLARS)



                                               COMMON STOCK                                                  ACCUMULATED
                                                 NUMBER OF     CAPITAL                                          OTHER
                                                  SHARES*       STOCK                      COMPREHENSIVE    COMPREHENSIVE
                                                               AMOUNTS       DEFICIT           LOSS              LOSS

<S>                                              <C>         <C>           <C>             <C>               <C>
Balance as of December 31, 2003                  547,448     43,576,292    (39,999,711)                       (1,315,689)
                                               =========     ==========    ===========                        ==========

Net loss for the year                               --             --       (4,205,224)    (4,205,224)
                                                                                           ----------

Other comprehensive loss, net of tax:
  Foreign currency translation                                                                (10,724)           (10,724)
                                                                                           ----------

Comprehensive loss                                                                         (4,215,948)
                                                                                           ==========

Conversion of 12% senior secured               1,920,611        379,906           --
convertible debentures

Interest on 12% senior secured convertible       126,984         44,813           --
debentures

Common stock and warrants issued for              50,039        175,336           --
services

Warrants issued for cash                          75,411      1,548,120           --

Beneficial conversion on issuance of                --        3,806,832           --
                                               ---------     ----------    -----------                       -----------
convertible debt

Balance as of December 31, 2004                2,720,493     49,531,299    (44,204,935)                       (1,326,413)
                                               =========     ==========    ===========                        ==========

Net loss for the period                             --             --         (965,617)      (965,617)

Other comprehensive loss, net of tax:
  Foreign currency translation                                                                 (9,544)            (9,544)
                                                                                           ----------

Comprehensive loss                                                                           (975,161)
                                                                                           ==========

Common stock repurchased for cancellation       (626,384)      (123,110)

Conversion of 12% senior secured               1,235,100        133,375           --
convertible debentures

Interest on 12% senior secured convertible       131,395         21,448           --
debentures

Common stock issued for investment               246,450        246,609           --

Warrants issued for cash                            --          766,002           --

Beneficial conversion on issuance of                --        1,225,690           --
convertible debt
                                               ---------     ----------    -----------                       -----------


Balance as of June 30, 2005                    3,707,054     51,801,313    (45,170,552)                       (1,335,957)
                                               =========     ==========    ===========                        ==========


* Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005




                 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, 2005 AND 2004
(AMOUNTS EXPRESSED IN US DOLLARS)


                                                                       2005          2004
                                                                          $             $
Cash flows from operating activities
<S>                                                               <C>         <C>
    Net loss                                                      (965,617)   (1,627,618)
                                                                ----------    ----------

    Adjustments to reconcile net loss to net cash
     used in operating activities:
    Amortization                                                   167,269       302,969
    Beneficial conversion on issuance of convertible debt          276,663     1,540,440
    Interest on 12% senior secured convertible debentures           21,448        19,077
    Write off unamortized debt discount                            729,422          --
    Write down of property and equipment                             3,851          --
    Increase in accounts receivable                               (468,688)     (470,466)
    Increase in prepaid expenses                                   (92,468)     (180,990)
    Increase (decrease) in accounts payable                        283,742      (599,646)
    Debt forgiveness                                               (66,150)         --
    Common stock and warrants issued for services                     --         175,336
                                                                ----------    ----------

    Net cash used in operating activities                         (110,528)     (840,898)
                                                                ----------    ----------

Cash flows from investing activities
    Purchase of property and equipment                            (193,016)      (83,904)
                                                                ----------    ----------

    Net cash used in investing activities                         (193,016)      (83,904)
                                                                ----------    ----------

Cash flows from financing activities
    Proceeds from (repayment of) receivable discount facility     (722,331)     (193,196)
    Proceeds from convertible financing facility                 3,100,000          --
    Deferred financing costs incurred                             (230,792)         --
    Repayment of notes payable                                        --          (6,444)
    Repayment of long-term debt                                    (69,396)      (41,683)
    Repayment of convertible debt                               (1,162,700)         --
    Repurchase of shares for cancellation                         (123,110)         --
    Proceeds from issuance of common stock                            --         229,121
    Proceeds from issuance of debentures and warrants                 --       1,175,000
                                                                ----------    ----------

    Net cash provided by financing activities                      791,671     1,162,798
                                                                ----------    ----------

Effect of foreign currency exchange rate changes                   (60,811)       45,060
                                                                ----------    ----------

Net increase (decrease) in cash                                    427,316       283,056
Cash
    Beginning of year                                              180,121       483,443
                                                                ----------    ----------
    End of year                                                    607,437       766,499
                                                                ==========    ==========

SUPPLEMENTAL CASH ITEMS:
    Interest paid                                                  179,579       222,592
                                                                ==========    ==========
    Income taxes paid                                               70,942         8,404
                                                                ==========    ==========



                 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, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



1. MANAGEMENT'S INTENTIONS AND GOING CONCERN

   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 recurring operating losses and working capital
   deficiencies. At June 30, 2005, the Company had a deficit of $45,170,552 and
   has suffered recurring losses from operations.

   With insufficient working capital from operations, the Company's primary
   source of cash is a $3,500,000 convertible financing facility with Laurus
   Master Fund, Ltd. ("Laurus"). At June 30, 2005, the balance on the facility
   was $2,929,111. The convertible financing facility consists of a revolving
   line of credit based on 90% of eligible accounts receivable which matures on
   June 27, 2008 and bears interest at an annual rate equal to The Wall Street
   Journal prime rate plus 3%. The principal outstanding on the secured
   convertible note is convertible into common stock at a fixed conversion price
   ranging from 80% to 110% of the average closing price for the previous ten
   days, subject to certain conditions.

   As at August 22, 2005, management's plans to mitigate and alleviate its
   operating losses and working capital deficiencies include:

   a) Registration of the shares underlying the Laurus convertible financing
      facility, warrants and options to provide additional working capital;
   b) Continued focus on securing customers with high growth potential, such as
      those in the aerospace and defense industries;
   c) Compliment organic growth with the acquisition of profitable engineering
      companies over the next two years; and
   d) Continued expansion of the engineering service offerings in Ontario,
      Canada.

   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.
   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 convertible
   financing facility with Laurus, 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.


   b) Change of Name

   On June 6, 2001, the Company changed its name from Thinkpath.com Inc. to
   Thinkpath Inc.




                                      F-6
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   c) Principal Business Activities

   Thinkpath Inc. is an 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.) and TBM
   Technologies 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 consolidated financial statement presentation

   The 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 acquired prior to June 30, 2001 and
   accounted for by the pooling of interest method, 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 amounts approximates fair values because of the
   short maturity of those instruments.

   f) Other Financial Instruments

   The carrying amounts of the Company's other financial instruments approximate
   fair values 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.

   i) Net Income (Loss) and 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.

   Diluted 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, assuming that all convertible preferred stock,
   stock options and warrants as described in note 14 were converted or
   exercised. Stock conversions, stock options and warrants which are
   anti-dilutive are not included in the calculation of diluted net income
   (loss) per weighted average common stock.

   j) Revenue

   The Company recognizes revenue under engineering service contracts when a
   contract has been executed, the contract price is fixed and determinable,
   delivery of services or products has occurred, and collection of the contract
   price is considered probable and can be reasonably estimated. Revenue is
   earned under time-and-materials, fixed-price and cost-plus contracts.




                                      F-7
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   The Company recognizes revenue on time-and-materials contracts to the extent
   of billable rates times hours delivered, plus expenses incurred. For fixed
   price contracts within the scope of Statement of Position 81-1, Accounting
   for Performance of Construction-Type and Certain Production-Type Contracts
   (SOP 81-1), revenue is recognized on the percentage of completion method
   using costs incurred in relation to total estimated costs or upon delivery of
   specific products or services, as appropriate. For fixed price-completion
   contracts that are not within the scope of SOP 81-1, revenue is generally
   recognized as earned according to contract terms as the service is provided.
   The Company provides its customers with a number of different services that
   are generally documented through separate negotiated task orders that detail
   the services to be provided and the compensation for these services. Services
   rendered under each task order represent an independent earnings process and
   are not dependent on any other service or product sold. The Company
   recognizes revenue on cost-plus contracts to the extent of allowable costs
   incurred plus a proportionate amount of the fee earned, which may be fixed or
   performance-based. The Company considers fixed fees under cost-plus contracts
   to be earned in proportion to the allowable costs incurred in performance of
   the contract, which generally corresponds to the timing of contractual
   billings. The Company records provisions for estimated losses on uncompleted
   contracts in the period in which those losses are identified. The Company
   considers performance-based fees under any contract type to be earned only
   when it can demonstrate satisfaction of a specific performance goal or it
   receive contractual notification from a customer that the fee has been
   earned. In all cases, the Company recognizes revenue only when pervasive
   evidence of an arrangement exists services have been rendered, the contract
   price is fixed or determinable, and collection is reasonably assured.

   Contract revenue recognition inherently involves estimation. From time to
   time, facts develop that requires the Company to revise the total estimated
   costs or revenues expected. In most cases, these changes relate to changes in
   the contractual scope of the work, and do not significantly impact the
   expected profit rate on a contract. The Company records the cumulative
   effects of any revisions to the estimated total costs and revenues in the
   period in which the facts become known.

   k) Goodwill

   In July 2001, the Financial Accounting Standards Board (FASB) 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 impairment test and concluded that there was
   no impairment of recorded goodwill, as the fair value of its reporting units
   exceeded their carrying amount.


   l) Income Taxes

   The Company accounts for income tax under the provision of SFAS 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.

   m) Foreign Currency

   The Company is a foreign private issuer and maintains its books and records
   of its Canadian companies in Canadian dollars (their functional currency).
   The financial statements of the Canadian companies are converted to US
   dollars as the Company has elected to report in US dollars consistent with
   Regulation S-X, Rule 3-20. The translation method used is the current rate
   method which is the method mandated by SFAS No. 52 where the functional
   currency is the foreign currency. Under the current method all assets and
   liabilities are translated at the current rate, stockholders' equity accounts
   are translated at historical rates and revenues and expenses are translated
   at average rates for the year.

   Due to the fact that items in the financial statements are being translated
   at different rates according to their nature, a translation adjustment is
   created. This translation adjustment has been included in accumulated other
   comprehensive income. Gains and losses on foreign currency transactions are
   included in financial expenses.




                                      F-8
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



   n) 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 and these
   differences could be material. These estimates are reviewed periodically and
   as adjustments become necessary, they are reported in earnings in the period
   in which they become known.

   o) 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 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 No. 144 addresses financial accounting
   and reporting for the impairment or disposal of long-lived assets. The
   Company adopted SFAS No. 144, effective January 1, 2002. The adoption of SFAS
   No. 144 did not have a material impact on the Company's results of operations
   or financial condition.

   p) 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.

   q) 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. SFAS No. 123 was
   amended by SFAS No. 148 which requires more prominent disclosure of
   stock-based compensation.

   r) Leases

   Leases are classified as either capital or operating. Those leases that
   transfer substantially all the benefits and risks of ownership of property to
   the Company are accounted for as capital leases. All other leases are
   accounted for as operating leases. Capital leases are accounted for as assets
   and are fully amortized on a straight-line basis over the lesser of the
   period of expected use of the assets or the lease term. Commitments to repay
   the principal amounts arising under capital lease obligations are included in
   current liabilities to the extent that the amount is repayable within one
   year, otherwise the principal is included in long term debt obligations. The
   capitalized lease obligation reflects the present value of future lease
   payments. The financing element of the lease payments is charged to interest
   expense in the consolidated statement of operations over the term of the
   lease. Operating lease costs are charged to administrative expense in the
   consolidated statement of operations on a straight-line basis.

   s) 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-9
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



   t) Recent Pronouncements

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

   In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
   Instruments with Characteristics of Both Liabilities and Equity". This
   statement specifies that certain instruments within its scope embody
   obligations of the issuer and that, therefore, the issuer must classify them
   as liabilities. SFAS No. 150 is effective immediately for all financial
   instruments entered into or modified after May 31, 2003. For all other
   instruments, SFAS No. 150 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 SFAS No. 150 by reporting the cumulative effect of a change in
   an accounting principle. SFAS No. 150 prohibits entities from restating
   financial statements for earlier years presented. The Company does not
   believe that the adoption of SFAS No. 150 will have a material impact, if
   any, on its results of operations or financial position.

   In December 2003, the FASB issued SFAS No. 132 (Revised), "Employers'
   Disclosures about Pensions and Other Postretirement Benefits - an amendment
   of FASB Statements No. 87, 88 and 106". This statement revises employers'
   disclosures about pension plans and other postretirement benefit plans. It
   does not change the measurement or recognition of those plans. SFAS No. 132
   (Revised) will retain and revise the disclosure requirements contained in the
   original SFAS No. 132. It also requires additional disclosures about the
   assets, obligations, cash flows, and net periodic benefit cost of defined
   benefit pension plans and other postretirement benefit plans. SFAS No. 132
   (Revised) generally is effective for fiscal years ending after December 15,
   2003. The Company does not believe that the adoption of SFAS No. 132
   (Revised) will have a material impact, if any, on its results of operations
   or financial position.

   In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an
   amendment of ARB No. 43". This statement clarifies the accounting for
   abnormal amounts of idle facility expense, freight, handling costs, and
   wasted material (spoilage). This statement is effective for inventory costs
   incurred during fiscal years beginning after June 15, 2005. The Company does
   not believe that the adoption of SFAS No. 151 will have a material impact, if
   any, on its results of operations or financial position as it does not have
   inventory.

   In December 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate
   Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67",
   which references the financial accounting and reporting guidance for real
   estate time-sharing transactions in AICPA Statement of Position (SOP) 04-2,
   "Accounting for Real Estate Time-Sharing Transactions". SFAS No. 152 is
   effective for years beginning after June 15, 2005, with restatements of
   previously issued financial statements prohibited. The Company does not
   believe that the adoption of SFAS No. 152 will have a material impact, if
   any, on its results of operations or financial position.

   In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
   Assets, an amendment of APB Opinion No. 29", effective for nonmonetary asset
   exchanges occurring in the fiscal year beginning January 1, 2006. This
   statement requires that exchanges of productive assets be accounted for at
   fair value unless fair value cannot be reasonably determined or the
   transaction lacks commercial substance. The Company does not believe that the
   adoption of SFAS No. 153 will have an impact, if any, on its results of
   operations or financial position.

   In December 2004, the FASB issued SFAS No. 123 (Revised), "Share-based
   Payment". This statement requires employers to expense costs related to
   share-based payment transactions with employees. With limited exceptions,
   SFAS No. 123 (Revised) requires that the fair value of share-based payments
   to employees be expensed over the period service is received. SFAS No. 123
   (Revised) becomes effective for annual reporting periods that begin after
   December 15, 2005.. The Company intends to adopt this standard using the
   modified retrospective method of transition. This method requires that issued
   financial statements be restated based on the amounts previously calculated
   and reported in the pro forma footnote disclosures required by SFAS No. 123.
   SFAS No. 123 (Revised) allows the use of both closed form models (e.g.,
   Black-Scholes Model) and open form models (e.g., lattice models) to measure
   the fair value of the share-based payment as long as that model is capable of
   incorporating all of the substantive characteristics unique to share-based
   awards. In accordance with the transition provisions of SFAS No. 123
   (Revised), the expense attributable to an award will be measured in
   accordance with the company's measurement model at that award's date of
   grant. The Company believes the pro forma disclosures in Note 3 (c) provide
   an appropriate short-term indicator of the level of expense that will be
   recognized in accordance with SFAS No. 123 (Revised). However, the total
   expense recorded in future periods will depend on several variables,
   including the number of shared-based awards that vest and the fair value of
   those vested awards.




                                      F-10
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   In March 2005, the FASB issued FASB Interpretation No. 47, "Accounting for
   Conditional Asset Retirement Obligations". FIN 47 clarifies that the term
   conditional asset retirement obligation as used in FASB Statement No. 143,
   "Accounting for Asset Retirement Obligations", refers to a legal obligation
   to perform an asset retirement activity in which the timing and/or method of
   settlement are conditional on a future event that may or may not be within
   the control of the entity. FIN 47 is effective no later than the end of
   fiscal years ending after December 15, 2005. Retrospective application of
   interim financial information is permitted but is not required. The Company
   does not believe that the adoption of FIN 47 will have an impact, if any, on
   its results of operations or financial position.


   u) Advertising Costs

   Advertising costs are expensed as incurred.



   3. STOCK OPTION PLANS
<TABLE>
<CAPTION>

                                                                                       WEIGHTED
                                                                                        AVERAGE
                                                                   OPTIONS*      EXERCISE PRICE
                                                                   --------      --------------

<S>                                                                <C>          <C>
   a)  Options outstanding at December 31, 2004                       112
                                                                      ===
        Options forfeited during the period                             -
        Options expired during the period                            (16)             $15,371
        Options granted during the period                         379,572              $.0001
        Options outstanding at June 30, 2005                      379,668
                                                                  =======

        Options exercisable December 31, 2004                         112              $6,100
        Options exercisable June 30, 2005                         379,668              $6,579
        Options available for future grant December 31, 2004        1,562
        Options available for future grant June 30, 2005        1,622,006

       * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005
</TABLE>



   b) Range of Exercise Prices at June 30, 2005

<TABLE>
<CAPTION>
                                                               OPTIONS
                                             WEIGHTED      OUTSTANDING                          WEIGHTED
                          OUTSTANDING         AVERAGE          AVERAGE          OPTIONS          AVERAGE
                             OPTIONS*  REMAINING LIFE   EXERCISE PRICE     EXERCISABLE*   EXERCISE PRICE
                             --------  --------------   --------------     ------------   --------------

<S>                                 <C>          <C>           <C>                    <C>        <C>
   $16,250                          9            0.49          $16,250                9          $16,250
   $3,350 to $3,500                87            0.82           $3,470               87           $3,488
   $0.0001                    379,572           10.00          $0.0001          379,572          $0.0001

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005

</TABLE>



                                      F-11
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   c) Pro-forma net income

   At June 30, 2005, the Company has five stock-based employee compensation
   plans, which are described more fully in Note 14(d). 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 in 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. SFAS No.123 was amended by SFAS No. 148 which requires more
   prominent disclosure of stock based compensation.
<TABLE>
<CAPTION>

                                                Three Months Ended June 30,    Six Months Ended June 30,
                                                        2005           2004            2005         2004
                                                        ----           ----            ----         ----
                                                           $              $               $            $

<S>                                                <C>            <C>             <C>        <C>
   Net loss as reported                            (820,529)      (835,388)       (965,617)  (1,627,618)
   Deduct:  Total stock-based employee
   compensation expense determined under
   fair value based method for all awards
   net of related tax effects                              -              -               -      (1,895)
                                                           -              -               -      -------

   Pro forma net loss                              (820,529)      (835,388)       (965,617)  (1,629,513)
                                                   =========      =========       =========  ===========

   Loss per share:
   Basic and diluted loss per share, as               (0.21)         (1.15)          (0.27)       (2.29)
                                                      ======         ======          ======       ======
   reported

   Pro forma loss per share                           (0.21)         (1.15)          (0.27)       (2.33)
                                                      ======         ======          ======       ======
</TABLE>



   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:


                                           2005 GRANTS           2001 GRANTS
                                           -----------           -----------
   Risk free interest                          3.9%                 4.76%
   rates
   Volatility                                  100%                  100%
   factors
   Weighted average expected                 10 years             4.90 years
   life
   Weighted average fair value per            $0.50               $3,700.00
   share
   Expected                                     --                    --
   dividends

   During the six months ended June 30, 2005, the Company granted Laurus Master
   Fund, Ltd. an option to purchase up to 379,572* shares of its common stock,
   no par value per share, at an exercise price of $.0001 per share. The options
   are exercisable at any time and in any amount for a period of ten years from
   the date of issuance.

   There have been no other option grants since 2001.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005




                                      F-12
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)





4. ACQUISITIONS

   On January 17, 2005, the Company acquired TBM Technologies Inc., an Ontario
   Corporation which provides design engineering services. Pursuant to the Share
   Purchase Agreement, the Company purchased TBM for approximately $246,600
   payable in shares of the Company's common stock, no par value. The Share
   Purchase Agreement also provided for price protection for the vendors for a
   period of two years from closing. In the event that the vendors seek to sell
   their shares in an open market transaction within the two years following
   closing and the bid price is less than the price of the shares on issuance,
   the Company will be obligated to issue additional shares of unregistered
   common stock with a value equal to the difference up to a maximum of
   $246,600. The acquisition was accounted for by the purchase method and the
   operations have been included in the consolidated operations from January 17,
   2005.

   The net acquired assets have been valued as follows:

    Current assets                                                 $23,616
    Property and equipment                                          11,240
    Other assets                                                   100,900
    Liabilities assumed                                          (107,667)

    Consideration                                                  246,600
                                                                   -------

    Goodwill                                                      $218,511
                                                                  ========



5. ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>

                                               JUNE 30, 2005         DECEMBER 31, 2004
                                               -------------         -----------------
                                                           $                         $
<S>                                                <C>                       <C>
   Accounts receivable                             2,926,127                 2,423,161
   Less:  Allowance for doubtful accounts          (210,607)                 (179,648)
                                                   ---------                 ---------
                                                   2,715,520                 2,243,513
                                                   =========                 =========

   Allowance for doubtful accounts
   Balance, beginning of period                      179,648                   186,847
   Provision                                          32,459                    25,738
   Recoveries                                        (1,500)                  (32,937)
                                                     -------                  --------
   Balance, end of period                            210,607                   179,648
                                                     =======                   =======
</TABLE>



6. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>

                                                  June 30, 2005                   December 31, 2004
                                    -------------------------------------------   ------------------

                                                       ACCUMULATED
                                            COST      AMORTIZATION         NET                  NET
                                               $                 $           $                    $

<S>                                      <C>               <C>          <C>                  <C>
   Furniture and equipment               170,085           136,414      33,671               35,245
   Computer equipment and software     3,581,401         3,088,327     493,074              448,773
   Leasehold improvements                 56,568            32,774      23,794                9,985
                                          ------            ------      ------                -----

                                       3,808,054         3,257,515     550,539              494,003
                                       =========         =========     =======              =======

   Assets under capital lease            247,664           144,251     103,413               90,689
                                         =======           =======     =======               ======
</TABLE>


   Amortization of property and equipment for the six months ended June 30,
   2005 amounted to $141,948 including amortization of assets under capital
   lease of $30,039.

   Amortization of property and equipment for the year ended December 31, 2004
   amounted to $568,069 including amortization of assets under capital lease
   of $51,278.




                                      F-13
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




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,
                                                                                    2005            2004
                                                                                    ----            ----
                                                                ACCUMULATED
                                               ACCUMULATED       IMPAIRMENT
                                    COST      AMORTIZATION           LOSSES          NET             NET
                               ---------- ----------------- ---------------- ------------ ---------------
                                       $                 $                $            $               $
<S>                                    <C>       <C>             <C>           <C>           <C>
   Technical Publications &
   Engineering (CadCam Inc.
   and TBM Technologies Inc.)  5,737,369           535,164        1,234,962    3,967,243       3,748,732
                               ---------           -------        ---------    ---------       ---------
</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.

   At December 31, 2004 and 2003, the Company performed its annual impairment
   test for goodwill and determined that no adjustment to the carrying value of
   goodwill was needed.

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



8. OTHER ASSETS
<TABLE>
<CAPTION>
                                                JUNE 30, 2005          DECEMBER 31, 2004
                                                -------------          -----------------
                                                            $                          $

<S>                                                    <C>                        <C>
   Cash surrender value of life insurance              64,241                     61,562
   Customer Lists                                      75,682                         --
   Deferred Financing Costs                           230,792                         --
                                                      =======                         ==

   Total                                              370,715                     61,562
                                                      =======                     ======
</TABLE>


   Included in Other Assets are deferred financing costs related to the Laurus
   Convertible Financing Facility to be amortized over three years beginning
   July 1, 2005. Amortization of other assets amounted to $25,320 for the six
   months ended June 30, 2005 and nil for the year ended December 31, 2004.



9. RECEIVABLE DISCOUNT FACILITY

   i) June 30, 2005

   On June 27, 2005, the Company paid down its receivable discount facility with
   Morrison Financial Services Limited in the amount of $1,073,468. The facility
   allowed the Company to borrow up to 75% of the value of qualified accounts
   receivables to a maximum of $1,500,000, and was subject to interest at 24%
   per annum.

   ii) December 31, 2004

   At December 31, 2004, the Company had a receivable discount facility in the
   amount of $723,995 with Morrison Financial Services Limited which allowed the
   Company to borrow up to 75% of the value of qualified accounts receivables to
   a maximum of $1,500,000, bearing interest at 30% per annum.





                                      F-14
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)





10. BANK INDEBTEDNESS

   On April 19, 2005, the Company paid down its revolving line of credit with
   the Royal Bank of Canada in the amount of $52,480. This liability was assumed
   by the Company on January 17, 2005 as a result of the acquisition of TBM
   Technologies Inc. The line was subject to interest at 7% per annum.


11. CONVERTIBLE DEBENTURE

   During the year ended December 31, 2004, the Company sold $2,050,000 in
   convertible debentures with 1,740,485* warrants to various investors. The
   debentures will become due twelve months from the date of issuance at various
   conversion prices and the warrants are exercisable at any time and in any
   amount for a period of seven years from closing at various purchase prices as
   outlined below:
<TABLE>
<CAPTION>

                                                                Original                      New
   Date of        Debenture     Conversion            # of      Exercise            # of      Exercise
    Issuance        Amount          Price         Warrants        Price         Warrants        Price
                                                   Issued*                     Repriced*
   -------------- ------------- -------------- ---------------- ------------ ---------------- ------------
<S>   <C>          <C>           <C>                   <C>       <C>                 <C>        <C>
      1/8/04       $25,000       $87.50**              286       $87.50              286        $2.00
     3/25/04      $350,000       $87.50**          184,800        $2.09           16,800        $1.25
                                                                                 168,000        $1.00
     3/29/04      $100,000       $87.50**           50,000        $2.00               --           --
     5/20/04      $150,000       $87.50**          116,470        $1.25          105,882        $1.00
     5/24/04      $100,000       $87.50**           71,429        $1.40               --           --
     6/18/04      $250,000       $87.50**          220,000        $1.25          200,000        $1.00
     6/18/04      $200,000       $87.50**          160,000        $1.25               --           --
    11/12/04      $875,000       $1.00***          937,500        $1.00               --           --
   -------------- ------------- -------------- ---------------- ------------ ---------------- ------------
                  $2,050,000                     1,740,485                       490,968
   ============== ============= ============== ================ ============ ================ ============
</TABLE>


   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005
   ** Conversion price is the lesser of $87.50 or 50% of the average of the
   three lowest prices on three separate trading days during the sixty-day
   trading period prior to conversion.
   ***Conversion price is the lesser of $1.00 or 80% of the average of the three
   lowest prices on three separate trading days during the twenty-day trading
   period prior to conversion.

   The proceeds of $2,050,000 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
   $1,319,000.

   At December 31, 2004, the value of the beneficial conversion feature on all
   issued convertible debentures was determined to be $3,654,507 which was
   credited to paid in capital and charged to earnings as interest expense.

   At March 31, 2005, the value of the beneficial conversion feature on all
   issued convertible debentures was determined to be $235,833 which was
   credited to paid in capital and charged to earnings as interest expense.

   On June 27, 2005, the Company paid off the principal balance of the 12%
   Senior Secured Convertible Debentures in the amount of $1,162,700. The
   accrued interest of $66,150 was forgiven and a total of 626,384* common
   shares held by the debenture holders were repurchased for cancellation for
   $123,110. In addition a total of 1,671,189 warrants held by the debenture
   holders were cancelled. The unamortized debt discount remaining on the
   convertible debentures of $729,422 was expensed as interest.


   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005



12. CONVERTIBLE FINANCING FACILITY

   On June 27, 2005, the Company closed a $3,500,000 convertible financing
   facility with Laurus Master Fund, Ltd. The facility consists of a revolving
   line of credit based on 90% of eligible accounts receivable which matures on
   June 27, 2008 and bears interest at an annual rate equal to The Wall Street
   Journal prime rate plus 3%. At closing, the Company received $3,100,000 in
   proceeds from the facility based on its eligible accounts receivable. The
   principal outstanding on the secured convertible note is convertible into
   common stock at a fixed conversion price ranging from 80% to 110% of the
   average closing price for the previous ten days, subject to certain
   conditions.



                                      F-15
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   In connection with the financing, the Company issued warrants to purchase up
   to 2,100,000* shares of its common stock with 1,050,000* at an exercise price
   of $0.55 per share and 1,050,000 at an exercise price of $0.60 per share. The
   warrants are exercisable at any time and in any amount for six years from the
   date of closing. The Company also issued an option to purchase up to 379,572*
   shares of its common stock, no par value per share, at an exercise price of
   $.0001 per share. The option is exercisable at any time and in any amount for
   a period of ten years from the date of issuance.

   The proceeds of $3,100,000 received by the Company were allocated between the
   options, warrants and the debenture without warrants on a pro rata basis.
   Paid in capital has been credited by the value of the options and the
   warrants in the amount of $766,002. This unamortized debt discount will be
   amortized over the three year term of the facility. At June 30, 2005, the
   Company has amortized $2,099 in debt discount as interest expense.

   The beneficial conversion feature was determined to be $953,739 which was
   also credited to paid in capital and will be amortized over the three year
   term of the facility. At June 30, 2005, the Company has amortized $2,613 in
   beneficial conversion feature as interest expense.

     At June 30, 2005, the balance on the facility was as follows:

     Principal balance                              $2,929,111
     Unamortized Beneficial Conversion Feature        (951,126)
     Unamortized Debt Discount                        (763,904)
                                                    ----------

     Total                                           1,214,081
                                                    ==========


   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005


13. LONG-TERM DEBT

   i) June 30, 2005

   At June 30, 2005, the Company had a loan balance of $209,837 with Terry Lyons
   with monthly payments of $10,000. The loan bears interest at US prime plus
   14%.


   ii) December 31, 2004

   Effective March 25, 2004, the Company amended its loan agreement with Terry
   Lyons. The balance of accrued interest was added to the original principal
   amount of $259,356 for a new principal balance of $299,768. Monthly payments
   of $10,000 began April 5, 2004 until the full amount of the note, including
   interest is paid in full. The interest rate was reduced from 30% per annum to
   US prime plus 14%.
<TABLE>
<CAPTION>

                                                                JUNE 30, 2005    DECEMBER 31, 2004
                                                                -------------    -----------------
                                                                            $                    $
   a) Included therein:

<S>                                                             <C>                  <C>
   A loan with T. Lyons payable in monthly payments of $10,000
   beginning April 5, 2004 and bearing interest at
   US prime plus 14% per annum.  This loan is subordinated
   to Morrison Financial Services Limited                             209,837              227,951

   Various capital leases with various payment
   terms and interest rates                                            45,336               39,985
                                                                       ------               ------
                                                                      255,173              267,936
   Less:  current portion                                             116,495               85,099
                                                                      -------               ------

                                                                      138,678              182,837
                                                                      =======              =======
</TABLE>




                                      F-16
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   b) Future principal payments obligations as at June 30, 2005, were as
   follows:

                     2005                          56,009
                     2006                         125,487
                     2007                          73,677
                     2008                             --
                     2009                             --
                                                -----------
                                                 $255,173
                                                ===========


   c) Interest expense related to long-term debt was $29,924 for the six months
   ended June 30, 2005 and $69,037 for the year ended December 31, 2004.



14. CAPITAL STOCK

   a) Authorized

      Unlimited   Common stock, no par value
      1,000,000   Preferred stock, issuable in series, rights to be determined
                  by the Board of Directors

   Effective June 29, 2005, the Company implemented a one-for-five thousand
   reverse split of its common stock. At the time of the reverse stock split,
   each five thousand shares of the Company's issued and outstanding common
   stock were combined into one share of its common stock. The reverse stock
   split did not change the number of authorized shares of the Company's common
   stock. The one-for-five thousand reverse split was approved by the Company's
   shareholders at its Annual General Meeting on April 22, 2005, and
   subsequently approved by its Board of Directors. All common share and per
   share amounts throughout these financial statements have been adjusted to
   give effect to this reverse stock split.

   b) Issued

   During the year ended December 31, 2004, the Company issued 50,039* shares of
   common stock, no par value per share, in consideration of consulting services
   in the amount of $175,336. This includes 50,000* shares of common stock, no
   par value per share, issued to Jeffrey Flannery pursuant to a consulting
   agreement with the Company dated May 26, 2004 for the provision of marketing
   and business development consulting services for a period of one year.

   During the year ended December 31, 2004, the Company issued 75,411* shares of
   its common stock to the 12% Senior Secured Convertible Debenture Holders on
   the exercise of warrants.

   During the year ended December 31, 2004, the Company issued 2,047,594* shares
   of its common stock to the 12% Senior Secured Convertible Debenture Holders
   upon the conversion of $1,025,400 principal balance and accrued interest.

   On January 17, 2005, the Company issued 246,450* shares of its common stock,
   no par value per share, to the Vendors of TBM Technologies Inc. for a total
   consideration of $246,600.

   During the six months ended June 30, 2005, the Company issued 1,366,495*
   shares of its common stock to the 12% Senior Secured Convertible Debenture
   holders upon the conversion of $321,900 principal balance and accrued
   interest.

   On June 27, 2005, the Company repurchased for cancellation 626,384* common
   shares held by the debenture holders for $123,110, representing approximately
   a sixty per cent discount to market value.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005



                                      F-17
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




   c) Warrants

   For each of the periods presented, the following warrants for the purchase of
   one common share per warrant (as adjusted for 1:5,000 reverse stock split on
   June 29, 2005) at the following prices per common share and expiry dates were
   outstanding:

              Number of warrants*
     June 30, 2005    December 31, 2004          Exercise price     Expiry date
                                                      per share
   ---------------- -------------------- ----------------------- --------------

                --                   --              $16,200.00           2004
                --                  195           $16,250.00 to           2005
                                                     $18,550.00
                56                   56              $12,300.00           2005
                56                   88  $3,150.00 to $5,000.00           2005
                20                   20               $7,500.00           2006
               213                  213               $2,750.00           2006
                --                1,200                 $400.00           2007
               124                  924                 $200.00           2009
             2,400                5,257                  $87.50           2009
                --                   --                   $3.75           2009
                --                   --                   $2.00           2009
               229                  229                   $1.25           2009
             1,714                4,286                  $87.50           2010
             2,857                2,857                  $43.75           2010
            13,333               33,333                   $3.75           2010
                --                   --                   $2.00           2010
             9,083                9,083                   $1.25           2010
                --               33,449                   $1.00           2010
                --               50,000                   $2.00           2011
                --               51,429                   $1.40           2011
            47,388              375,388                   $1.25           2011
            62,500            1,243,382                   $1.00           2011
         1,050,000                   --                   $0.55           2011
         1,050,000                   --                   $0.60           2011
   ---------------- -------------------- ----------------------- --------------

         2,239,973            1,811,389
   ---------------- -------------------- ----------------------- --------------

   A summary of changes to number of issued warrants is as follows:

   Outstanding at December 31, 2004                        1,811,389
   Issued                                                  2,100,000
   Cancelled                                              (1,671,189)
   Exercised                                                   --
   Expired                                                      (227)
                                                          -----------
   Outstanding at March 31, 2005                           2,239,973*
                                                          ------------


   On January 8, 2004, the Company issued 286* 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
   $87.50 per share. On April 7, 2004 all of these warrants were repriced from
   $87.50 to $2.00 per share.

   On March 25, 2004, the Company issued 184,800* warrants to Bristol Investment
   Fund, Ltd. which are exercisable at any time and in any amount for a period
   of seven years from closing at a purchase price of $2.09 per share. On June
   18, 2004, all of these warrants were repriced from $2.09 to $1.25 per share.
   On November 12, 2004, 168,000 of these warrants were repriced from $1.25 to
   $1.00 per share.

   On March 29, 2004 the Company issued 50,000* warrants to Tazbaz Holdings
   Limited, which are exercisable at any time and in any amount for a period of
   seven years from closing at a purchase price of $2.00 per share.

   On May 20, 2004 and June 18, 2004, the Company issued 336,471* warrants to
   Bristol Investment Fund, Ltd. which are exercisable at any time and in any
   amount for a period of seven years from closing at a purchase price of $1.25
   per share. On November 12, 2004, 305,882* of these warrants were repriced
   from $1.25 to $1.00 per share.

   On May 24, 2004 and June 18, 2004, the Company issued 231,429* warrants to
   Tazbaz Holdings Limited which are exercisable at any time and in any amount
   for a period of seven years from closing at purchase prices of $1.40 and
   $1.25 per share, respectively.



                                      F-18
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



   On November 12, 2004, the Company issued 937,500* warrants to holders of the
   Original Discount 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 $1.00 per share.

   On June 27, 2005, a total of 1,671,189* warrants held by the debenture
   holders were cancelled in consideration of payment in full of the principal
   balance owing of $1,162,700.

   On June 27, 2005 the Company issued Laurus Master Fund, Ltd. warrants to
   purchase up to 2,100,000* shares of its common stock with 1,050,000* at an
   exercise price of $0.55 per share and 1,050,000* at an exercise price of
   $0.60 per share. The warrants are exercisable at any time and in any amount
   for six years from the date of closing.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005


   d) Stock Options

   The Company's Board of Directors and shareholders have approved the adoption
   of the 1998 Stock Option Plan, 2000 Stock Option Plan, 2001 Stock Option
   Plan, 2002 Stock Option Plan and 2005 Stock Option Plan, pursuant to which an
   aggregate of 1,622,006* options may be granted to officers, directors,
   consultants, key employees, advisors and similar parties who provide their
   skills and expertise to the Company

   The plans are administrated by the Compensation Committee of 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.

   Options granted to employees 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.

   On June 27, 2005, the Company issued Laurus Master Fund, Ltd. an option to
   purchase up to 379,572* shares of its common stock, no par value per share,
   at an exercise price of $.0001 per share. The options are exercisable at any
   time and in any amount for a period of ten years from the date of issuance.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005





                                      F-19
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)





15. 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, 2005      DECEMBER 31, 2004
                                                      -------------      -----------------
                                                                  $                      $

<S>                                                       <C>                    <C>
   Losses available to offset future income taxes         4,671,000              4,678,000
   Share and debt issue costs                               440,000                357,000
   Property and equipment                                   874,000                877,000
                                                            -------                -------
                                                          5,985,000              5,912,000

   Less:  valuation allowance                             5,985,000              5,912,000
                                                          ---------              ---------
                                                                 --                     --


   b)     Current Income Taxes

            Current income taxes consist of:
                                                      JUNE 30, 2005      DECEMBER 31, 2004
                                                      -------------      -----------------
                                                                  $                      $
   Amounts calculated at Federal and Provincial           (365,508)            (1,503,170)
                                                          ---------            -----------
   statutory rates

   Permanent differences                                    363,191                763,040
   Valuation allowance                                       73,259                758,000
                                                             ------                -------
                                                            436,450              1,521,040
                                                            -------              ---------

   Current income taxes                                      70,942                 17,870
                                                             ======                 ======

</TABLE>

   Issue expenses totaling approximately $1,090,000 may be claimed at the rate
   of 20% per year until 2005. To the extent that these expenses create a loss,
   which are available to be carried forward for seven years for losses up to
   and including 2003 and for ten years commencing in 2004 from the year the
   loss is incurred. The Company has not reflected the benefit of utilizing
   non-capital losses totaling approximately $11,700,000 nor a capital loss
   totaling $750,000 in the future as a deferred tax asset as at June 30, 2005.
   As at the completion of the June 30, 2005 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.



16. COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
                                                SIX MONTHS ENDED            YEAR ENDED
                                                   JUNE 30, 2005     DECEMBER 31, 2004
                                                   -------------     -----------------
                                                               $                     $
<S>                                                    <C>                 <C>
   Net loss                                            (965,617)           (4,205,224)
   Other comprehensive loss
      Foreign currency translation adjustments           (9,544)              (10,724)
                                                         -------              --------

   Comprehensive income (loss)                         (975,161)           (4,215,948)
                                                       =========           ===========
</TABLE>



   The foreign currency translation adjustments are not currently adjusted for
   income taxes since the Company is located 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-20
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




17. DISCONTINUED OPERATIONS

   Effective March 8, 2002, the Company sold its technology division, Njoyn
   Software Incorporated to Cognicase Inc., a Canadian company. 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 and six months ended June 30, 2005
   and 2004. The net loss for the three and six months ended June 30, 2005 was
   $40 and $4,600 compared to $1,300 and $2,700 in 2004.

   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.

   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.

   There was no training revenue for the three and six months ended June 30,
   2005 and 2004. There were no losses from the training division for the three
   and six months ended June 30, 2005 compared to a net loss of $13,000 and
   $24,000, respectively, in 2004.

   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. Of the $190,627,
   $146,627 was received in cash on closing with the balance of $44,000 due in a
   promissory note payable by June 27, 2004. On June 8, 2005, the Company
   collected approximately $40,000 on the promissory note and forgave the
   balance. 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.

   There was no IT recruitment revenue for the three and six months ended June
   30, 2005 and 2004. Net income from the IT recruitment division for the three
   and six months ended June 30, 2005 was $24,000 reflecting a tax credit
   collected in the second quarter. There was no net income attributable to the
   IT recruitment division for the three and six months ended June 30, 2004.

   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:

<TABLE>
<CAPTION>
                                     Three Months Ended June 30,      Six Months Ended June 30,
                                             2005           2004           2005            2004
                                             ----           ----           ----            ----
                                                               $                              $

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

   Income (loss) from operations
   before income taxes                       (86)       (14,319)           (86)        (26,723)

   Provision for Income Taxes            (23,779)             --       (19,182)             300

   Income (loss) from discontinued
   operations                              23,693       (14,319)         19,096        (27,023)
                                           ======       ========         ======        ========

</TABLE>




                                      F-21
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)




18. SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

   The Company issued common shares and warrants for the following:

                                         SIX MONTHS ENDED         YEAR ENDED
                                            JUNE 30, 2005  DECEMBER 31, 2004
                                            -------------  -----------------
                                                        $                  $
   Services rendered                                   --            175,336
   Accounts payable                                    --                 --
                                                       --                 --
                                                       --            175,336
                                                       ==            =======


19. SEGMENTED INFORMATION
<TABLE>
<CAPTION>

   a) Sales by Geographic Area
                                        Three Months Ended June 30,     Six Months Ended June 30,
                                             2005              2004           2005           2004
                                             ----              ----           ----           ----
                                                $                 $              $              $

<S>                                       <C>               <C>            <C>            <C>
   Canada                                 677,360           122,339        974,004        345,177
   United States of America             2,926,510         3,202,845      6,232,805      6,036,708
                                        ---------         ---------      ---------  --  ---------

                                        3,603,870         3,325,184      7,206,809      6,381,885
                                        =========         =========      =========      =========


   b) Net Income (Loss) by Geographic Area
                                        Three Months Ended June 30,     Six Months Ended June 30,
                                             2005              2004           2005           2004
                                             ----              ----           ----           ----
                                                $                 $              $              $

   Canada                             (1,040,024)       (1,404,561)    (1,718,121)    (2,392,768)
   United States of America               219,495           569,173        752,504        765,150
                                          -------           -------        -------        -------

                                        (820,529)         (835,388)      (965,617)    (1,627,618)
                                        =========         =========      =========    ===========



   c)   Identifiable Assets by Geographic Area
                                                      JUNE 30, 2005             DECEMBER 31, 2004
                                                      -------------             -----------------
                                                                  $                             $

   Canada                                                 1,428,171                       499,483
   United States of America                               6,963,533                     6,316,851
                                                          ---------                     ---------

                                                          8,391,704                     6,816,334
                                                          =========                     =========



    d) Revenue and Gross Profit by Operating Segment

                                        Three Months Ended June 30,     Six Months Ended June 30,
                                             2005              2004           2005           2004
                                             ----              ----           ----           ----
                                                $                 $              $              $
   Revenue
     Tech Pubs and Engineering          3,575,010         3,275,178      7,149,569      6,248,100

   Gross Profit
     Tech Pubs and Engineering          1,060,855         1,261,296      2,326,570      2,246,624
</TABLE>


   No other segment represents 10% of the Company's revenues, operating losses
   or total assets.




                                      F-22
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)





   e) Revenues from Major Customers and Concentration of Credit Risk

   The consolidated entity had the following revenues from major customers:

   For the three and six months ended June 30, 2005, one customer had sales of
   $905,070 and $2,290,288, respectively, representing approximately 25% and
   32%, respectively, of total revenue.

   For the three and six months ended June 30, 2004, one customer had sales of
   $1,247,344 and $1,957,453, respectively, representing approximately 38% and
   31%, respectively, of total revenue.

   f) Purchases from Major Suppliers

   There were no significant purchases from major suppliers.



20. EARNINGS PER SHARE

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

                                              Three Months Ended June 30,      Six Months Ended June 30,
                                                      2005           2004           2005            2004
                                                      ----           ----           ----            ----
                                                         $              $              $               $
   NUMERATOR
<S>                                              <C>            <C>            <C>           <C>
   Net loss from continuing operations           (844,222)      (821,069)      (984,713)     (1,600,595)

   Income (loss) from discontinued                  23,693       (14,319)         19,096        (27,023)
                                                    ------       --------         ------        --------
   operations

   Net loss                                      (820,529)      (835,388)      (965,617)     (1,627,618)
                                                 =========      =========      =========     ===========

   DENOMINATOR
   Weighted Average common stock
   outstanding*                                  4,000,971        712,614      3,665,040         698,550
                                                 =========        =======      =========         =======

   Basic and diluted loss per common
   share from continuing operations                 (0.21)         (1.15)         (0.27)          (2.29)
                                                    ======         ======         ======          ======

   Basic and diluted loss per common
   share after discontinued operations              (0.21)         (1.17)         (0.26)          (2.33)
                                                    ======         ======         ======          ======


   Average common stock outstanding*             4,000,971        712,614      3,665,040         698,550
   Average common stock issuable                        --             --             --              --
                                                        --             --             --              --

   Average common stock outstanding
   assuming dilution*                            4,000,971        712,614      3,665,040         698,550
                                                 =========        =======      =========         =======
</TABLE>


   The outstanding options and warrants as detailed in note 14 were not included
   in the computation of the diluted earnings per common share as the effect
   would be anti-dilutive.

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

   As at June 30, 2005, the Company has issued a total of 3,065,420* shares of
   its common stock to the convertible debenture holders upon the conversion of
   $3,862,300 of debentures and accrued interest.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005




                                      F-23
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



21. 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, 2005, for the next five years are as follows:

                     2005        $158,056
                     2006         171,326
                     2007         171,326
                     2008          87,189
                     2009          45,120
               Thereafter           3,760
                                    -----

                                 $636,777

   The lease commitments do not include an operating lease for premises that the
   Company is currently sub leasing to the purchaser of the United States
   training division. If the purchaser was to default on payment or abandon the
   premises, the Company would be liable for annual payments of $282,096
   expiring August 31, 2006.

   The lease commitments do not include an operating lease for premises located
   in the United States that was 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 expired November 30, 2004.

   b) On March 17, 2004, Johnston & Associates, LLC, a South Carolina
   corporation, filed a statement against the Company with the Superior Court of
   Justice of Ontario, Canada, Court File No. C-294-04, demanding payment of
   $60,000 pursuant to a consulting agreement entered into April 2002. The
   Company intends to defend this claim vigorously. Trial is set to commence
   September 5, 2005, although the Company is still pursuing settlement
   discussions with the plaintiff.

   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.



22. SUBSEQUENT EVENTS

   On July 1, 2005 the Company issued 294,118* shares of its common stock to
   Declan French in consideration of $100,000 extra compensation as approved by
   the shareholders at the Annual General Meeting on April 22, 2005. The shares
   were issued based on the closing price of $0.34 on July 1, 2005. The extra
   compensation was awarded in consideration of Mr. French's personal guarantees
   and indemnification of certain of the Company's debts as well as his
   acceptance of shares in lieu of cash for prior bonuses and debt payments.

   Also, on July 1, 2005, the Company issued 636,363* shares of its common stock
   to Declan French in consideration of $140,000 in accrued bonuses from the
   years 2003 and 2004 as per his employment agreement. The shares were issued
   based on the lowest intraday price of $0.22 on July 1, 2005.

   On July 7, 2005, the Company entered into an agreement with Financial Media
   Relations, LLC, a California company, for the purpose of developing and
   implementing a marketing and investor relations program and the provision of
   business development and strategic advisory services. The term of the
   agreement is twelve months at a cost of $20,500 on execution and $12,500 per
   month thereafter. In addition, the Company issued 100,000* shares of common
   stock, no par value, and warrants to purchase 500,000* shares of common stock
   exercisable at $0.41 per share and 100,000* shares of common stock
   exercisable at $1.20 per share. The warrants shall be exercisable for a
   period of two years, shall vest immediately and be deemed earned upon
   issuance, and all options shall have "piggyback" registration rights.

   * Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005





                                      F-24
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)



23. 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

   Although the Company had one significant customer representing 32% of total
   revenue, the Company continues to actively expand its customer base. The
   Company's revenue is derived from customers of various industries and
   geographic locations reducing its credit risk. Where exposed to credit risk,
   the Company mitigates this risk by routinely assessing the financial strength
   of its customers, establishing billing arrangements and monitoring the
   collectibility of the account on an ongoing basis.

   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 values of the accounts receivable and of the accounts payable on
   acquisition of subsidiary company approximates their fair values because of
   the short-term maturities of 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 based on the estimated
   quoted market prices for the same or similar debt instruments. The fair value
   of the long-term debt approximates the carrying value.



24. COMPARATIVE FIGURES

   Certain figures in the June 30, 2004 financial statements have been
   reclassified to conform with the basis of presentation used at June 30, 2005.






                                      F-25
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         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-QSB.
The statements contained in this Form 10-QSB 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-QSB 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-QSB 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

         Thinkpath provides engineering services including design, build,
drafting, technical publishing and documentation, and on-site engineering
support to customers in the defense, aerospace, automotive, health care and
manufacturing industries.

         We were incorporated under the laws of the Province of Ontario, Canada
in 1994. In September 1999, we acquired an engineering services company CadCam
Inc. and its two subsidiaries, CadCam Michigan Inc. and CadCam Technical
Services Inc. CadCam Inc. was founded in 1977.

         Our principal executive offices are located at 201 Westcreek Boulevard,
Brampton, Ontario, Canada and our website is www.thinkpath.com.


PLAN OF OPERATION

        In 2002 we began to focus our efforts on building relationships with
customers in high growth industries such as defense and aerospace. We have since
been repositioning in growth industries and targeting customers with high growth
potential, such as those in defense. We are poised to benefit from the increased
demand generated by aerospace and defense-related customers who will
increasingly rely on our project engineering design expertise and technical
staffing services. This year we will continue to solidify our relationships to
actively increase new business opportunities with existing customers including
General Dynamics, Lockheed Martin, Boeing, General Electric, United Defense and
TACOM. We will continue to grow organically as well as through acquisitions over
the next year. Acquisitions will be limited to profitable engineering companies,
which must have an immediate accretive impact.





                                      -2-
<PAGE>


                      STATEMENTS OF OPERATIONS--PERCENTAGES
                                   (UNAUDITED)



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

                                            2005      2004      2005      2004
                                           -----     -----     -----     -----


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

COST OF SERVICES                           70 %      62 %      68 %      64 %
                                           -----     -----     -----     -----
GROSS PROFIT                               30 %      38 %      32 %      36 %
                                           -----     -----     -----     -----
EXPENSES
   Administrative                          18 %      17 %      17 %      19 %
   Selling                                 10 %      10 %      10 %      10 %
   Depreciation and amortization            2 %       4 %       2 %       4 %
   Write down of property and equipment     0 %       0 %       0 %       0 %
   Debt forgiveness                        (2)%       0 %      (1)%       0 %
                                           -----     -----     -----     -----

Income (loss) from continuing
operations before interest charges          2 %       7 %       4 %       3 %

  Interest charges                         24 %      31 %      17 %      28 %
                                           -----     -----     -----     -----
Loss from continuing operations
before income taxes                       (22)%     (24)%     (13)%     (25)%

   Income taxes                             2 %      -- %       1 %      -- %
                                           -----     -----     -----     -----
Loss from continuing operations           (24)%     (24)%     (14)%     (25)%

Income (loss) from discontinued
operations                                     1 %       0 %       0 %       0 %

Net Loss                                     (23)%     (24)%     (14)%     (25)%
                                           -----     -----     -----     -----



                                      -3-
<PAGE>


RESULTS OF OPERATIONS

THE THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2004

REVENUE
         For the three months ended June 30, 2005, we derived 81% of our revenue
in the United States compared to 96% for the three months ended June 30, 2004.
The decrease in total revenue derived from the United States is a result of the
increase in engineering sales in Canada to $680,000 for the three months ended
June 30, 2005 from $120,000 for the three months ended June 30, 2004.

         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 99% of total
revenue for the three months ended June 30, 2005 compared to 98% for the same
period last year. No other operating segment represented more than 10% of our
consolidated revenues.

       Consolidated revenues for the three months ended June 30, 2005 increased
by $275,000 or 8%, to $3,600,000 as compared to $3,325,000 for the three months
ended June 30, 2004. The increase is primarily attributable to the increase in
engineering sales in Canada.


COST OF SERVICES
         The cost of services for the three months ended June 30, 2005 increased
by $485,000, or 24%, to $2,535,000, as compared to $2,050,000 for the same
period in 2004. This increase is partially attributable to the increase in
revenue. As a percentage of revenue, the cost of services for the three months
ended June 30, increased from 62% in 2004 to 70% in 2005.


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. Gross profit for the three months ended
June 30, 2005 decreased by $205,000, or 16%, to $1,070,000 compared to
$1,275,000 for the same period in 2004. As a percentage of revenue, gross profit
for the three months ended June 30, 2005 was 30% compared to 38% in 2004. The
decrease in gross profit can be attributed to the addition of lower margin
engineering projects during the second quarter as a means of establishing a new
client base, delayed start dates of higher margin defense projects and the
increase in lower margin contract placement sales compared to higher margin
project sales.

EXPENSES
         Total expenses for the three months ended June 30, 2005 decreased by
$60,000, or 6%, to $1,000,000 compared to $1,060,000 for the three months ended
June 30, 2004.

ADMINISTRATIVE EXPENSES
         Administrative expenses increased by $75,000 or 13% to $655,000 for the
three months ended June 30, 2005 compared to $580,000 for the three months ended
June 30, 2004. As a percentage of revenue, administrative expenses increased
from 17% for the three months ended June 30, 2004 to 18% for the same period in
2005. This increase is largely attributable to increased administrative salaries
and benefits and additional maintenance fees on hardware and software.

SELLING EXPENSES
         Selling expenses decreased by $25,000, or 7%, to $325,000 for the three
months ended June 30, 2005 compared to $350,000 for the same period in 2004.
This decrease is attributable to the reduction of commissions paid to sales
personnel which is driven by gross profit. As a percentage of revenue, selling
expenses for the three months ended June 30, 2005 are 10% which is consistent
with the same period last year.



                                      -4-
<PAGE>


DEPRECIATION AND AMORTIZATION
         For the three months ended June 30, 2005, depreciation and amortization
expenses decreased by $55,000, or 39%, to $85,000 from $140,000 for the three
months ended June 30, 2004. As a percentage of revenue, depreciation and
amortization expenses have decreased from 4% for the three months ended June 30,
2004 to 2% for the same period in 2005. This decrease is the result of the
declining balance of the our property and equipment.

DEBT FORGIVENESS
         Debt forgiveness for the three months ended June 30, 2005 includes
$66,150 of accrued interest on the 12% Senior Secured Convertible Debentures
which was forgiven when the principal balance was repaid on June 27, 2005.


INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST CHARGES
         For the three months ended June 30, 2005, income from continuing
operations before interest charges decreased by $140,000 or 67% to $70,000
compared to $210,000 for the three months ended June 30, 2004.

INTEREST CHARGES
         For the three months ended June 30, 2005, interest charges decreased by
$180,000, or 17%, to $850,000 from $1,030,000 for the three months ended June
30, 2004. This decrease is largely attributable to the reduced interest expense
on the beneficial feature recognized on the convertible debentures. Included in
the interest charges for the three months ended June 30, 2005 is the write off
the unamortized debt discount remaining on the 12% Senior Secured Convertible
Debentures in the amount of $729,422. Also included is $2,099 in amortized debt
discount and $2,613 in beneficial conversion expense related to the Laurus
Convertible Financing Facility. Included in the interest charges for the three
months ended June 30, 2004 is $916,229 beneficial conversion expense related to
the 12% Senior Secured Convertible Debentures.

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
         For the three months ended June 30, 2005, loss from continuing
operations before income taxes decreased by $40,000 or 5% to $780,000 compared
to $820,000 for the same period in 2004.

INCOME TAXES
         Income tax expense for the three months ended June 30, 2005 increased
by $60,000 or 2000% to $63,000 compared to $3,000 for the three months ended
June 30, 2004.

LOSS FROM CONTINUING OPERATIONS
         Loss from continuing operations for the three months ended June 30,
2005 increased by $20,000 or 2% to a loss of $840,000 compared to a loss of
$820,000 for the three months ended June 30, 2004.

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, 2005 and
2004.

       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 staff in our technology division, including the
employees of TidalBeach Inc. We will not have future revenues from either our
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, 2005 and 2004. The net loss for the three months ended June 30,
2005 was $40 compared to $1,300 for the three months ended June 30, 2004.



                                      -5-
<PAGE>


        Effective May 1, 2002, we signed an agreement with triOS Training
Centres Limited, an Ontario company, for the purchase of certain assets of our
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.

          On November 1, 2002, we entered into a series of agreements with
Thinkpath Training LLC, a New York company, for the purchase of certain assets
of our 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 our training division and therefore the operations have been
reported as discontinued.

          There was no training revenue for the three months ended June 30, 2005
and 2004. There were no losses from the training division for the three months
ended June 30, 2005 compared to a net loss of $13,000 for the three months ended
June 30, 2004.

          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. As a result of this transaction, we will not have future
revenues from our IT recruitment division and therefore the operations have been
reported as discontinued.

         There was no IT recruitment revenue for the three months ended June 30,
2005 and 2004. Net income from the IT recruitment division for the three months
ended June 30, 2005 was $24,000 reflecting a tax credit collected. There was no
net income attributable to the IT recruitment division for the three months
ended June 30, 2004.


NET LOSS
         For the three months ended June 30, 2005, net loss decreased by $15,000
or 2% to a net loss of $820,000 compared to a net loss of $835,000 for the same
period in 2004.



THE SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 2004

REVENUE
         For the six months ended June 30, 2005, we derived 86% of our revenue
in the United States compared to 95% for the same period in 2004. The decrease
in total revenue derived from the United States is a result of the increase in
engineering sales in Canada to $970,000 for the six months ended June 30, 2005
from $340,000 for the three months ended June 30, 2004.

         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 99% of total
revenue for the six months ended June 30, 2005 compared to 98% for the same
period last year. No other operating segment represented more than 10% of our
consolidated revenues.

       Consolidated revenues for the six months ended June 30, 2005 increased by
$830,000 or 13%, to $7,210,000 as compared to $6,380,000 for the six months
ended June 30, 2004. The increase is primarily attributable to the increase in
engineering sales in Canada as well as revenue related to the continuing
contracts with existing customers in the defense industry, awarded in 2004. As a
result of these contracts, one customer had sales of approximately 32% of our
consolidated revenues for the six months ended June 30, 2005. The same customer
had sales of approximately 31% of our consolidated revenues for the same period
last year.




                                      -6-
<PAGE>

COST OF SERVICES
         The cost of services for the six months ended June 30, 2005 increased
by $760,000, or 18%, to $4,870,000, as compared to $4,110,000 for the same
period in 2004. This increase is partially attributable to the increase in
revenue. As a percentage of revenue, the cost of services for the six months
ended June 30, increased from 64% in 2004 to 68% in 2005.

 GROSS PROFIT
         Gross profit for the six months ended June 30, 2005 increased by
$70,000, or 3%, to $2,340,000 compared to $2,270,000 for the same period in
2004. This increase is partially attributable to the increase in revenue. As a
percentage of revenue however, gross profit for the six months ended June 30,
2005 was 32% compared to 36% in 2004. This decrease can be attributed to the
addition of lower margin engineering projects during the second quarter as a
means of establishing a new client base, delayed start dates of higher margin
defense projects and the increase in lower margin contract placement sales
compared to higher margin project sales.

EXPENSES
         Total expenses for the six months ended June 30, 2005 decreased by
$50,000, or 2%, to $2,040,000 compared to $2,090,000 for the six months ended
June 30, 2004.

ADMINISTRATIVE EXPENSES
         Administrative expenses increased by $90,000 or 7% to $1,240,000 for
the six months ended June 30, 2005 compared to $1,150,000 for the six months
ended June 30, 2004. As a percentage of revenue, administrative expenses
decreased from 19% for the six months ended June 30, 2004 to 17% for the same
period in 2005.

SELLING EXPENSES
         Selling expenses increased by $30,000, or 5%, to $690,000 for the six
months ended June 30, 2005 compared to $660,000 for the same period in 2004.
This increase is attributable to the increase in commissions paid to sales
personnel which is driven by gross profit. As a percentage of revenue, selling
expenses for the six months ended June 30, 2005 are 10% which is consistent with
the same period last year.

DEPRECIATION AND AMORTIZATION
         For the six months ended June 30, 2005, depreciation and amortization
expenses decreased by $110,000, or 39%, to $170,000 from $280,000 for the six
months ended June 30, 2004. As a percentage of revenue, depreciation and
amortization expenses have decreased from 4% for the six months ended June 30,
2004 to 2% for the same period in 2005. This decrease is the result of the
declining balance of our property and equipment.

WRITE DOWN OF PROPERTY AND EQUIPMENT
         During the six months ended June 30, 2005, we wrote down property and
equipment in the amount of $4,000. The fair value of the impaired asset was
generally estimated by discounting the expected future cash flows of the
individual assets. Impairment was indicated by adverse change in market prices,
current period cash flow losses combined with a history of losses, or a
significant change in the manner in which the asset is to be used.

DEBT FORGIVENESS
         Debt forgiveness for the six months ended June 30, 2005 includes
$66,150 of accrued interest on the 12% Senior Secured Convertible Debentures
which was forgiven when the principal balance was repaid on June 27, 2005.

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST CHARGES
         For the six months ended June 30, 2005, income from continuing
operations before interest charges increased by $120,000 or 67% to $300,000
compared to $180,000 for the six months ended June 30, 2004.




                                      -7-
<PAGE>


INTEREST CHARGES
         For the six months ended June 30, 2005, interest charges decreased by
$570,000, or 32%, to $1,210,000 from $1,780,000 for the six months ended June
30, 2004. This decrease is largely attributable to the reduced interest expense
on the beneficial feature recognized on the convertible debentures. Included in
the interest charges for the six months ended June 30, 2005 is the write off the
unamortized debt discount remaining on the 12% Senior Secured Convertible
Debentures in the amount of $729,422. Also included is $2,099 in amortized debt
discount and $2,613 in beneficial conversion expense related to the Laurus
Convertible Financing Facility. Included in the interest charges for the six
months ended June 30, 2004 is $1,540,440 beneficial conversion expense related
to the 12% Senior Secured Convertible Debentures.

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
         For the six months ended June 30, 2005, loss from continuing operations
before income taxes decreased by $690,000 or 43% to $910,000 compared to
$1,600,000 for the same period in 2004.

INCOME TAXES
         Income tax expense for the six months ended June 30, 2005 increased by
$65,000 or 1300% to $70,000 compared to $5,000 for the six months ended June 30,
2004.

LOSS FROM CONTINUING OPERATIONS
         Loss from continuing operations for the six months ended June 30, 2005
decreased by $615,000 or 38% to a loss of $985,000 compared to a loss of
$1,600,000 for the six months ended June 30, 2004.

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, 2005 and
2004.

       There was no technology revenue for the six months ended June 30, 2005
and 2004. The net loss for the six months ended June 30, 2005 was $4,600
compared to $2,700 for the six months ended June 30, 2004.

       There was no training revenue for the six months ended June 30, 2005 and
2004. There was no loss from the training division for the six months ended June
30, 2005 compared to a loss of $24,000 for the six months ended June 30, 2004.

       There was no IT recruitment revenue or income for the six months ended
June 30, 2005 and 2004. Net income for the IT recruitment division for the six
months ended June 30, 2005 was $24,000 reflecting a tax credit collected in the
second quarter. There was no income attributable to the IT recruitment division
for the six months ended June 30, 2004.

NET LOSS
         For the six months ended June 30, 2005, the net loss decreased by
$660,000 or 40% to $970,000 compared to a net loss of $1,630,000 for the same
period in 2004.



LIQUIDITY AND CAPITAL RESOURCES

         On June 27, 2005, we closed a $3,500,000 convertible financing facility
with Laurus Master Fund, Ltd. The facility consists of a revolving line of
credit based on 90% of eligible accounts receivable which matures on June 27,
2008 and bears interest at an annual rate equal to The Wall Street Journal prime
rate plus 3%. At closing, we received $3,100,000 in proceeds from the facility
based on our eligible accounts receivable at that date. The principal
outstanding on the secured convertible note is convertible into common stock at
a fixed conversion price ranging from 80% to 110% of the average closing price
for the previous ten days, subject to certain conditions.



                                      -8-
<PAGE>




         In connection with the financing, we issued warrants to purchase up to
2,100,000* shares of our common stock with 1,050,000* at an exercise price of
$0.55 per share and 1,050,000 at an exercise price of $0.60 per share. The
warrants are exercisable at any time and in any amount for six years from the
date of closing. We also issued an option to purchase up to 379,572* shares of
our common stock, no par value per share, at an exercise price of $.0001 per
share. The option is exercisable at any time and in any amount for a period of
ten years from the date of issuance.

         The proceeds of $3,100,000 were allocated between the options, warrants
and the debenture without warrants on a pro rata basis. Paid in capital has been
credited by the value of the options and the warrants in the amount of $766,002.
This unamortized debt discount will be amortized over the three year term of the
facility. At June 30, 2005, we have amortized $2,099 in debt discount as
interest expense.

         The beneficial conversion feature was determined to be $953,739 which
was also credited to paid in capital and will be amortized over the three year
term of the facility. At June 30, 2005, we have amortized $2,613 in beneficial
conversion feature as interest expense.

         With insufficient working capital from operations, the convertible
financing facility will be our primary source of cash. At June 30, 2005, the
balance on the facility was $2,929,111.

         From the proceeds of the Laurus facilty, we paid down our receivable
discount facility with Morrison Financial Services Limited in the amount of
$1,073,468. We also paid off the principal balance of the 12% Senior Secured
Convertible Debentures in the amount of $1,162,700. The accrued interest of
$66,150 was forgiven and a total of 626,384* common shares held by the debenture
holders were repurchased for cancellation for $123,110. In addition a total of
1,671,189 warrants held by the debenture holders were cancelled. The unamortized
debt discount remaining on the convertible debentures of $729,422 was expensed
as interest.

         At June 30, 2005, we had cash of $610,000 and working capital of
$540,000. At June 30, 2005, we had a cash flow deficiency from operations of
$110,000. At June 30, 2004, we had cash of $770,000 and a working capital
deficiency of $960,000. At June 30, 2004, we had a cash flow deficiency from
operations of $840,000.

       At June 30, 2005, we had a cash flow deficiency from investing activities
of $190,000 related to the purchase of property and equipment. At June 30, 2004,
we had a cash flow deficiency from investing activities of $80,000 also related
to the purchase of property and equipment.

       At June 30, 2005 we had cash flow from financing activities of $790,000
largely attributable to proceeds from the convertible financing facility with
Laurus Master Fund, Ltd. At June 30, 2004, we had cash flow from financing
activities of $1,160,000 attributable primarily to proceeds of $1,175,000 from
the sale of convertible debentures and $230,000 from the exercise of common
stock purchase warrants.

        At June 30, 2005 we had a loan balance of $209,837 with an individual,
Terry Lyons. We are required to make monthly payments of $10,000 until the full
amount of the note, including interest is paid in full. The loan bears interest
at US prime plus 14% per annum and is subordinated to Laurus Master Fund, Ltd.

         At June 30, 2005, we had approximately $45,000 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.



                                      -9-
<PAGE>


             On January 17, 2005, we acquired TBM Technologies Inc., an Ontario
Corporation which provides design engineering services. Pursuant to the Share
Purchase Agreement, we purchased TBM for approximately $246,600 payable in
shares of our common stock, no par value. The Share Purchase Agreement also
provided for price protection for the vendors for a period of two years from
closing. In the event that the vendors seek to sell their shares in an open
market transaction within the two years following closing and the bid price is
less than the price of the shares on issuance, we will be obligated to issue
additional shares of unregistered common stock with a value equal to the
difference up to a maximum of $246,600. The acquisition was accounted for by the
purchase method and the operations have been included in the consolidated
operations from January 17, 2005.

         As a result of the acquisition of TBM Technologies Inc., we acquired a
revolving line of credit with the Royal Bank of Canada. On April 19, 2005, we
paid down the line of credit with the Royal Bank of Canada in the amount of
$52,480.

         Effective June 29, 2005, we implemented a one-for-five thousand reverse
split of our common stock. At the time of the reverse stock split, each five
thousand shares of our issued and outstanding common stock were combined into
one share of our common stock. The reverse stock split did not change the number
of authorized shares of our common stock. The one-for-five thousand reverse
split was approved by our shareholders at our Annual General Meeting held on
April 22, 2005, and subsequently approved by our Board of Directors. All common
share and per share amounts throughout this quarterly report have been adjusted
to give effect to this reverse stock split.

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




                                      -10-
<PAGE>


         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". This
statement specifies that certain instruments within its scope embody obligations
of the issuer and that, therefore, the issuer must classify them as liabilities.
SFAS No. 150 is effective immediately for all financial instruments entered into
or modified after May 31, 2003. For all other instruments, SFAS No. 150 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 SFAS No. 150 by reporting the
cumulative effect of a change in an accounting principle. SFAS No. 150 prohibits
entities from restating financial statements for earlier years presented. We do
not believe that the adoption of SFAS No. 150 will have a material impact, if
any, on our results of operations or financial position.

         In December 2003, the FASB issued SFAS No. 132 (Revised), "Employers'
Disclosures about Pensions and Other Postretirement Benefits - an amendment of
FASB Statements No. 87, 88 and 106. This statement revises employers'
disclosures about pension plans and other postretirement benefit plans. It does
not change the measurement or recognition of those plans. SFAS No. 132 (Revised)
will retain and revise the disclosure requirements contained in the original
SFAS No. 132. It also requires additional disclosures about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other postretirement benefit plans. SFAS No. 132 (Revised)
generally is effective for fiscal years ending after December 15, 2003. We do
not believe that the adoption of SFAS No. 132 (Revised) will have a material
impact, if any, on our results of operations or financial position.

         In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an
amendment of ARB No. 43". This statement clarifies the accounting for abnormal
amounts of idle facility expense, freight, handling costs, and wasted material
(spoilage). This statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. We do not believe that the adoption
of SFAS No. 151 will have a material impact, if any, on our results of
operations or financial position as it does not have inventory.

         In December 2004, the FASB issued SFAS No. 152, "Accounting for Real
Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66 and
67, which references the financial accounting and reporting guidance for real
estate time-sharing transactions in AICPA Statement of Position (SOP) 04-2,
"Accounting for Real Estate Time-Sharing Transactions. SFAS No. 152 is effective
for years beginning after June 15, 2005, with restatements of previously issued
financial statements prohibited. We do not believe that the adoption of SFAS No.
152 will have a material impact, if any, on our results of operations or
financial position.

         In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets, an amendment of APB Opinion No. 29", effective for
nonmonetary asset exchanges occurring in the fiscal year beginning January 1,
2006. This statement requires that exchanges of productive assets be accounted
for at fair value unless fair value cannot be reasonably determined or the
transaction lacks commercial substance. We do not believe that the adoption of
SFAS No. 153 will have an impact, if any, on our results of operations or
financial position.

         In December 2004, the FASB issued SFAS No. 123 (Revised), "Share-based
Payment". This statement requires employers to expense costs related to
share-based payment transactions with employees. With limited exceptions, SFAS
No. 123 (Revised) requires that the fair value of share-based payments to
employees be expensed over the period service is received. SFAS No. 123
(Revised) becomes effective for annual reporting periods that begin after
December 15, 2005. We intend to adopt this standard using the modified
retrospective method of transition. This method requires that issued financial
statements be restated based on the amounts previously calculated and reported
in the pro forma footnote disclosures required by SFAS No. 123. SFAS No. 123


                                      -11-
<PAGE>

(Revised) allows the use of both closed form models (e.g., Black-Scholes Model)
and open form models (e.g., lattice models) to measure the fair value of the
share-based payment as long as that model is capable of incorporating all of the
substantive characteristics unique to share-based awards. In accordance with the
transition provisions of SFAS No. 123 (Revised), the expense attributable to an
award will be measured in accordance with the company's measurement model at
that award's date of grant. We believe the pro forma disclosures in Note 3 (c)
provide an appropriate short-term indicator of the level of expense that will be
recognized in accordance with SFAS No. 123 (Revised). However, the total expense
recorded in future periods will depend on several variables, including the
number of shared-based awards that vest and the fair value of those vested
awards.

         In March 2005, the FASB issued FASB Interpretation No. 47, "Accounting
for Conditional Asset Retirement Obligations". FIN 47 clarifies that the term
conditional asset retirement obligation as used in FASB Statement No. 143,
"Accounting for Asset Retirement Obligations", refers to a legal obligation to
perform an asset retirement activity in which the timing and/or method of
settlement are conditional on a future event that may or may not be within the
control of the entity. FIN 47 is effective no later than the end of fiscal years
ending after December 15, 2005. Retrospective application of interim financial
information is permitted but is not required. We do not believe that the
adoption of FIN 47 will have an impact, if any, on its results of operations or
financial position.


RECENT EVENTS

         On July 1, 2005 we issued 294,118* shares of our common stock to Declan
French in consideration of $100,000 extra compensation as approved by the
shareholders at the Annual General Meeting on April 22, 2005. The shares were
issued based on the closing price of $0.34 on July 1, 2005. The extra
compensation was awarded in consideration of Mr. French's personal guarantees
and indemnification of certain of the Company's debts as well as his acceptance
of shares in lieu of cash for prior bonuses and debt payments.

         Also, on July 1, 2005, we issued 636,363* shares of our common stock to
Declan French in consideration of $140,000 in accrued bonuses from the years
2003 and 2004 as per his employment agreement. The shares were issued based on
the lowest intraday price of $0.22 on July 1, 2005.

         On July 7, 2005, we entered into an agreement with Financial Media
Relations, LLC, a California company, for the purpose of developing and
implementing a marketing and investor relations program and the provision of
business development and strategic advisory services. The term of the agreement
is twelve months at a cost of $20,500 on execution and $12,500 per month
thereafter. In addition, we issued 100,000* shares of common stock, no par
value, and warrants to purchase 500,000* shares of common stock exercisable at
$0.41 per share and 100,000* shares of common stock exercisable at $1.20 per
share. The warrants shall be exercisable for a period of two years, shall vest
immediately and will be deemed earned upon issuance. All options shall have
"piggyback" registration rights.

         On June 1, 2005, we received notice that the US Securities and Exchange
Commission is reviewing our Form 10-KSB for the fiscal year ended December 31,
2004 and our Form 10-QSB for the quarterly period ended March 31, 2005.
Therefore, we may be required to amend this quarterly report to reflect any
changes required by the Securities and Exchange Commission.


CRITICAL ACCOUNTING ESTIMATES AND POLICIES

         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.



                                      -12-
<PAGE>


         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 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 December 31, 2004, we wrote down our investments in non-related
companies to nil.

REVENUE RECOGNITION

       We recognize revenue under engineering service contracts when a contract
has been executed, the contract price is fixed and determinable, delivery of
services or products has occurred, and collection of the contract price is
considered probable and can be reasonably estimated. Revenue is earned under
time-and-materials, fixed-price and cost-plus contracts.

         We recognize revenue on time-and-materials contracts to the extent of
billable rates times hours delivered, plus expenses incurred. For fixed price
contracts within the scope of Statement of Position 81-1, Accounting for
Performance of Construction-Type and Certain Production-Type Contracts (SOP
81-1), revenue is recognized on the percentage of completion method using costs
incurred in relation to total estimated costs or upon delivery of specific
products or services, as appropriate. For fixed price-completion contracts that
are not within the scope of SOP 81-1, revenue is generally recognized as earned
according to contract terms as the service is provided. We provide our customers
with a number of different services that are generally documented through
separate negotiated task orders that detail the services to be provided and the
compensation for these services. Services rendered under each task order
represent an independent earnings process and are not dependent on any other
service or product sold. We recognize revenue on cost-plus contracts to the
extent of allowable costs incurred plus a proportionate amount of the fee
earned, which may be fixed or performance-based. We consider fixed fees under
cost-plus contracts to be earned in proportion to the allowable costs incurred



                                      -13-
<PAGE>

in performance of the contract, which generally corresponds to the timing of
contractual billings. We record provisions for estimated losses on uncompleted
contracts in the period in which those losses are identified. We consider
performance-based fees under any contract type to be earned only when it can
demonstrate satisfaction of a specific performance goal or it receive
contractual notification from a customer that the fee has been earned. In all
cases, we recognize revenue only when pervasive evidence of an arrangement
exists services have been rendered, the contract price is fixed or determinable,
and collection is reasonably assured.

         Contract revenue recognition inherently involves estimation. From time
to time, facts develop that requires us to revise the total estimated costs or
revenues expected. In most cases, these changes relate to changes in the
contractual scope of the work, and do not significantly impact the expected
profit rate on a contract. We record the cumulative effects of any revisions to
the estimated total costs and revenues in the period in which the facts become
known.

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.

         At December 31, 2004, we performed our annual impairment test for
goodwill and determined that no adjustment to the carrying value of goodwill was
needed.

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


FOREIGN CURRENCY TRANSLATION

         The books and records of our Canadian operations are recorded in
Canadian dollars. The financial statements are converted to US dollars as we
have elected to report in US dollars consistent with Regulation S-X, Rule 3-20.
The translation method used is the current rate method which is the method
mandated by SFAS No. 52 where the functional currency is the foreign currency.
Under the current method all assets and liabilities are translated at the
current rate, stockholders' equity accounts are translated at historical rates
and revenues and expenses are translated at average rates for the year.

         Due to the fact that items in the financial statements are being
translated at different rates according to their nature, a translation
adjustment is created. This translation adjustment has been included in
accumulated other comprehensive income.



                                      -14-
<PAGE>


         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.


* Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005.








                                      -15-
<PAGE>


ITEM 3. 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 the end of the period covered by the
report (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:

         On March 17, 2004, Johnston & Associates, LLC, a South Carolina
corporation, filed a statement against us with the Superior Court of Justice of
Ontario, Canada, Court File No. C-294-04, demanding payment of $60,000 pursuant
to a consulting agreement entered into April 2002. We intend to defend this
claim vigorously. The trial is set to commence on September 5, 2005, although
the Company is still discussing settlement options with the plaintiff.

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



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

            On June 29, 2005, we entered into a security agreement with Laurus
Master Fund, Ltd. Pursuant to the agreement, Laurus established a $3.5 million
convertible financing facility based on eligible accounts receivable. Financing
under the security agreement bears interest at an annual rate equal to the Wall
Street Journal prime rate plus 3%. The principal outstanding on the convertible
note is convertible into common stock at a fixed conversion price ranging from
80% to 110% of the average closing price of the common stock for the previous 10
days, subject to certain conditions.

        In connection with the transaction, we issued Laurus warrants to
purchase up to 1,050,000* shares of common stock at an exercise price of $0.55
per share and 1,050,000 at an exercise price of $0.60 per share. The warrants
are exercisable at any time and in any amount for six years from the date of
closing. We also issued an option to purchase up to 379,572* shares of its
common stock, no par value per share, at an exercise price of $0.0001 per share.
The option is exercisable at any time and in any amount for a period of ten
years from the date of issuance.

        The offering was made pursuant to the exemption under Section 4(2) of
the Securities Act of 1933, as amended.





                                      -16-
<PAGE>



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.


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

         On April 22, 2005, we held an Annual Meeting of Shareholders at which
the shareholders: (i) elected the Board of Directors for the ensuing year; (ii)
ratified the appointment of Schwartz, Levitsky, Feldman, LLP, as our Independent
Certified Public Accountants for the ensuing year; (iii) approved certain
executive compensation; (iv) approved a reverse stock split of 5,000 to 1 of our
outstanding common shares; and, (v) ratified the adoption of our 2005 Stock
Option Plan.


       (i) The following directors were elected to the Board of Directors and
received the votes indicated:
                                  Shares In Favor          Shares Withheld
Declan A. French                   5,122,912,462              253,326,046
Lloyd MacLean                      5,152,304,842              223,933,666
Patrick Power                      5,152,304,842              223,933,666

        Set forth below is a biographical description of each of our directors
elected at our Annual General Meeting and Special Meeting of Shareholders held
on April 22, 2005:

         Declan A. French has served as our Chairman of the Board of Directors,
Chief Executive Officer and President since our inception in February 1994.
Prior to founding Thinkpath, Mr. French was President and Chief Executive
Officer of TEC Partners Ltd., an information technology recruiting firm in
Toronto, Canada. Mr. French has a diploma in Psychology and Philosophy from the
University of St. Thomas in Rome, Italy.

        Lloyd MacLean has served on our Board of Directors since February 14,
2003. Mr. MacLean served as our Chief Financial Officer and a Director from
September 1997 until May 2000, at which time he departed to pursue other
business opportunities. Mr. MacLean is the sole officer and director of Globe
Capital Corporation. From 1996 to 1997, Mr. MacLean was Vice-President and Chief
Financial Officer of ING Direct Bank of Canada. From 1994 until 1996, he was
Vice-President and Chief Financial Officer of North American Trust, Inc., where
he also served as a Vice President from 1990 until 1994. Mr. MacLean has an MBA
from Harvard University and is a member of the Canadian Institute of Chartered
Accountants.

         Patrick Power, is a General Manager at Netlan Technology Center. In
1997, Mr. Power opened our New York IT recruitment office where he served as
Business Development Manager from 1997 until 2001. In 2001, Mr. Power was
transferred to our New York training division. In 2002 we sold this division, to
Thinkpath Training, LLC, a privately held independent company where he was
employed as Director of Business Development 2001 until 2004. Mr. Power has a
National Diploma in Civil Engineering (NDEA) from The Waterford Institute of
Technology in Ireland. Mr. Power is the nephew of Mr. French, our Chief
Executive Officer.




                                      -17-
<PAGE>


       (ii) The appointment of Schwartz, Levitsky Feldman, LLP, to serve as our
independent chartered accountants for the ensuing year was approved by the votes
indicated:

                  For                       Against           Withheld
             5,151,233,747                224,904,761         100,000


       (iii) The resolution to issue certain executive compensation was approved
by the votes indicated:

                  For                       Against           Withheld
             2,749,337,995                416,805,346      2,210,095,167


       (iv) The resolution of a reverse stock split of 5,000 to 1 of our
outstanding common shares was approved by the votes indicated:

                  For                       Against           Withheld
             5,052,525.907                323,712,601            0

         (v) The resolution to adopt the 2005 Stock Option Plan was approved by
the votes indicated:

                  For                       Against           Withheld
             3,658,517,162              1,797,916,751         9,804,595


No other matters were voted upon.


ITEM 5. OTHER INFORMATION

         None.





                                      -18-
<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit 31. Rule 13a-14(a)/15d-14(a) Certifications.
Exhibit 32.1 Certification by the Chief Executive Officer Relating to a Periodic
Report Containing Financial Statements.** Exhibit 32.2 Certification by the
Chief Financial Officer Relating to a Periodic Report Containing Financial
Statements.**

(b) Reports on Form 8-K.

           On July 1, 2005, the Company filed a report on Form 8-K to disclose
its transaction with Laurus Master Fund, Ltd.

* Adjusted for reverse split of Company's stock (1:5,000) on June 29, 2005.

** The Exhibit attached to this Form 10-QSB shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.





                                      -19-
<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 22, 2005       By: /s/ Declan French       By: /s/ Kelly Hankinson
                             ---------------------       -----------------------
                             Declan French               Kelly L. Hankinson
                             Chief Executive Officer     Chief Financial Officer













                                      -20-