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 MARCH 31, 2006
                                       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 |_|

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
                 RULE 12B-2 OF THE EXCHANGE ACT) YES | | NO |X|

            AS OF MAY 19, 2006 THERE WERE 4,738,322 SHARES OF COMMON
                   STOCK, NO PAR VALUE PER SHARE, OUTSTANDING.

    TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE) YES | | NO |X|
<PAGE>

                                 THINKPATH INC.

                 MARCH 31, 2006 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 March 31, 2006 and
         December 31, 2005....................................................
         Interim Consolidated Statements of Operations for the three months
         ended March 31, 2006 and 2005........................................
         Interim Consolidated Statements of Changes in Stockholders' Equity
         for the three months ended March 31, 2006 and the year ended
         December 31, 2005....................................................
         Interim Consolidated Statements of Cash Flows for the three months
         ended March 31, 2006 and 2005........................................
         Notes to Interim Consolidated Financial Statements...................

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

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

                          PART II - OTHER INFORMATION

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

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

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

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

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

Item 6.  Exhibits and Reports on Form 8-K ....................................
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS


                                 THINKPATH INC.


                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                              AS OF MARCH 31, 2006

                        (AMOUNTS EXPRESSED IN US DOLLARS)
<PAGE>

THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2006 (UNAUDITED) AND DECEMBER 31, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)


                                                       3/31/2006      12/31/2005
                                                      ----------      ----------
                                                               $               $
                                     ASSETS

CURRENT ASSETS
     Cash                                                 95,975         123,056
     Accounts receivable (note 5)                      1,763,619       1,841,338
     Prepaid expenses                                    120,188         143,273
                                                      ----------      ----------
                                                       1,979,782       2,107,667
PROPERTY AND EQUIPMENT (note 6)                          551,357         577,689

GOODWILL (note 7)                                      2,507,552       2,507,552

OTHER ASSETS (note 8)                                    240,014         259,344
                                                      ----------      ----------
                                                       5,278,705       5,452,252
                                                      ==========      ==========


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

<PAGE>

THINKPATH INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2006 (UNAUDITED) AND DECEMBER 31, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)

                                                       3/31/2006     12/31/2005
                                                     -----------    -----------
                                                               $              $
                                  LIABILITIES
CURRENT LIABILITIES
     Convertible financing -  Laurus  (note 12)        1,379,109      1,169,156
     Convertible financing - derivatives (note 12)       286,462        424,241
     Accounts payable (note 13)                        1,308,101      1,166,152
     Current portion of long-term debt (note 14)         107,249        124,326
                                                     -----------    -----------
                                                       3,080,921      2,883,875

     LONG-TERM DEBT (note 14)                             90,802         69,826
     CONVERTIBLE FINANCING - DERIVATIVES (note 12)       451,002        480,948
                                                     -----------    -----------
                                                       3,622,725      3,434,649
                                                     ===========    ===========

COMMITMENTS AND CONTINGENCIES (note 22)

                              STOCKHOLDERS' EQUITY

CAPITAL STOCK (note 15)                               40,486,219     40,486,219

DEFICIT                                              (37,890,599)   (37,518,943)

ACCUMULATED OTHER COMPREHENSIVE LOSS (note 17)          (939,640)      (949,673)
                                                     -----------    -----------
                                                       1,655,980      2,017,603
                                                     -----------    -----------
                                                       5,278,705      5,452,252
                                                     ===========    ===========

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

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005 (RESTATED)
(AMOUNTS EXPRESSED IN US DOLLARS)

<TABLE>
<CAPTION>
                                                         Three months ended March 31,

                                                                         Restated
                                                            2006      2005 (note 25)
                                                         ----------   --------------
                                                              $              $
<S>                                                       <C>            <C>
REVENUE                                                   2,910,314      3,602,939

COST OF SERVICES                                          2,088,930      2,330,770
                                                         ----------     ----------
GROSS PROFIT                                                821,384      1,272,169
                                                         ----------     ----------
EXPENSES
     Administrative                                         605,426        584,498
     Selling                                                473,816        368,034
     Depreciation and amortization                           87,932         81,538
     Write down of property and equipment                        --          3,851
     Financing costs and mark-to-market adjustments        (124,208)            --
                                                         ----------     ----------
                                                          1,042,966      1,037,921

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE            (221,582)       234,248
     INTEREST CHARGES AND INCOME TAXES

     Interest Charges                                       142,231        358,494
                                                         ----------     ----------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES        (363,813)      (124,246)

     Income Taxes (note 16)                                   7,843          7,440
                                                         ----------     ----------
LOSS FROM CONTINUING OPERATIONS                            (371,656)      (131,686)

LOSS FROM DISCONTINUED OPERATIONS (note 18)                      --         (9,133)
                                                         ----------     ----------
NET LOSS                                                   (371,656)      (140,819)
                                                         ==========     ==========
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
     OUTSTANDING BASIC AND DILUTED*                       4,369,147      3,685,690
                                                         ==========     ==========
LOSS FROM CONTINUING OPERATIONS PER WEIGHTED
     AVERAGE COMMON STOCK BASIC AND DILUTED                   (0.09)         (0.04)
                                                         ==========     ==========
LOSS FROM DISCONTINUED OPERATIONS PER WEIGHTED
     AVERAGE COMMON STOCK BASIC AND DILUTED                      --          (0.00)
                                                         ==========     ==========
NET LOSS PER WEIGHTED AVERAGE COMMON STOCK
     BASIC AND DILUTED                                        (0.09)         (0.04)
                                                         ==========     ==========
</TABLE>

* 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.
<PAGE>

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND THE YEAR ENDED DECEMBER 31, 2005
(AMOUNTS EXPRESSED IN US DOLLARS)

<TABLE>
<CAPTION>
                                                          COMMON                                                       ACCUMULATED
                                                           STOCK         CAPITAL                                             OTHER
                                                       NUMBER OF           STOCK                    COMPREHENSIVE    COMPREHENSIVE
                                                         SHARES*         AMOUNTS         DEFICIT             LOSS             LOSS
                                                      ----------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>               <C>                <C>
Balance as of December 31, 2004                        2,720,493      39,686,047     (34,683,637)                         (940,764)
                                                      ==========================================                        ==========
Net loss for the period                                       --              --      (2,835,306)      (2,835,306)

Other comprehensive loss, net of tax:
   Foreign currency translation adjustments                                                                (8,909)          (8,909)
                                                                                                      -----------
Comprehensive loss                                                                                     (2,844,215)
                                                                                                      ===========
Common stock repurchased for cancellation (note 11)     (626,384)       (123,110)

Conversion of 12% senior secured convertible
   debentures                                          1,235,100         317,168              --

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

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

Common stock and warrants issued for services            100,787          98,057

Accrued liabilities settled through the issuance
   of common stock                                       930,481         240,000
                                                      ------------------------------------------                        ----------
Balance as of December 31, 2005                        4,738,322      40,486,219     (37,518,943)                         (949,673)
                                                      ==========================================                        ==========
Net loss for the period                                       --              --        (371,656)        (371,656)

Other comprehensive loss, net of tax:
   Foreign currency translation adjustments                                                                10,033           10,033

Comprehensive loss                                                                                       (361,623)

Balance as of March 31, 2006                           4,738,322      40,486,219     (37,890,599)                         (939,640)
                                                      ==========================================                        ==========
</TABLE>

* 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.
<PAGE>

THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005 (RESTATED)
(AMOUNTS EXPRESSED IN US DOLLARS)


<TABLE>
<CAPTION>
                                                                                     Three Months Ended March 31,
                                                                                                        Restated
                                                                                           2006    2005 (note 25)
                                                                                     ----------    -------------
                                                                                              $                $
<S>                                                                                  <C>              <C>
Cash flows from operating activities
    Net loss                                                                           (371,656)        (140,819)
    Adjustments to reconcile net loss to net cash used in operating activities:
    Loss from discontinued operations                                                        --           (9,133)
    Depreciation and amortization                                                        87,932           81,538
    Beneficial conversion on issuance of convertible debt                                    --          267,682
    Interest on 12% senior secured convertible debentures                                    --           21,448
    Amortization of deferred financing costs                                            142,105               --
    Mark-to-market of derivatives                                                      (266,313)              --
    Write down of property and equipment                                                     --            3,851
    Decrease (increase) in accounts receivable                                           31,172         (462,788)
    Decrease (increase) in prepaid expenses                                              22,913          (90,729)
    Increase in accounts payable                                                        148,283          241,449
                                                                                     ----------       ----------
    Net cash used in operating activities                                              (205,564)         (87,501)
                                                                                     ----------       ----------
Cash flows from investing activities
    Purchase of property and equipment                                                   (5,470)        (134,702)
                                                                                     ----------       ----------
    Net cash used in investing activities                                                (5,470)        (134,702)
                                                                                     ----------       ----------
Cash flows from financing activities
    Proceeds from receivable discount facility                                               --          300,614
    Proceeds from convertible financing facility                                        165,891               --
    Repayment of long-term debt                                                         (20,072)         (42,512)
                                                                                     ----------       ----------
    Net cash provided by financing activities                                           145,819          258,102
                                                                                     ----------       ----------
Cash flow from used by discontinued operations                                               --            9,133

Effect of foreign currency exchange rate changes                                         38,134             (517)
                                                                                     ----------       ----------
Net increase (decrease) in cash                                                         (27,081)          44,515
Cash
    Beginning of period                                                                 123,056          180,121
                                                                                     ----------       ----------
    End of period                                                                        95,975          224,636
                                                                                     ==========       ==========
SUPPLEMENTAL CASH ITEMS:
    Interest paid                                                                       142,231           73,947
                                                                                     ==========       ==========
    Income taxes paid                                                                     7,843           12,037
                                                                                     ==========       ==========
</TABLE>

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

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(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 March 31, 2006, the Company had a deficit of $37,890,599
      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 March 31, 2006, the balance on the
      facility was $2,688,110 (note 12) . 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 105% of the average
      closing price for the previous ten days, subject to certain conditions.

      As at May 19, 2006, 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 in the current year and following 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 Master Fund, Ltd., 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 effectiveness of a
      registration statement registering the shares and warrants underlying the
      Laurus facility, 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) 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 100% (unless otherwise noted) of 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.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      c) 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.

      d) 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 approximate fair values because of
      the short maturity of those instruments.

      e) 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.

      f) 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.

      g) 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.

      h) 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 15 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.

      i) 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.

      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.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      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.

      j) 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.

      At December 31, 2005, the Company recorded a charge of $1,459,691 for the
      impaired goodwill of the Technical Publications and Engineering unit based
      on reduced cash flow estimates.

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

      k) 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.

      l) 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.

      m) 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.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      n) 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.

      o) 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.

      p) Accounting for Stock-Based Compensation

      Effective January 1, 2006, the Company's stock based employee compensation
      plans are accounted for in accordance with the recognition and measurement
      provisions of Statement of Financial Accounting Standards ("FAS") No. 123
      (revised 2004), Share-Based Payment ("FAS 123(R)"). See Note 3 (c) for
      further details.

      q) 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.

      r) 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.


      <PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

     s) Recent Pronouncements

     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 Non-monetary
     Assets, an amendment of APB Opinion No. 29", effective for non-monetary
     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. Effective January 1, 2006, the Company adopted this
     standard using the modified prospective 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 total expense of stock based
     employee compensation 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 May 2005, the FASB issued Statement No. 154, "Accounting Changes and
     Error Corrections", applying to all voluntary accounting principle changes
     as well as the accounting for and reporting of such changes. SFAS No. 154
     requires voluntary changes in accounting principle be retrospectively
     applied to financial statements from previous periods unless such
     application is impracticable. SFAS No. 154 requires that changes in
     depreciation, amortization, or depletion methods for long-lived,
     non-financial assets must be accounted for as a change in accounting
     estimate due to a change in accounting principle. By enhancing the
     consistency of financial information between periods, the requirements of
     FASB 154 improves financial reporting. FASB 154 replaces APB Opinion No. 20
     and FASB 3. FASB 154 carries forward many provisions of Opinion 20 and FASB
     3 without change including those provisions related to reporting a change
     in accounting estimate, a change in reporting entity, correction of an
     error and reporting accounting changes in interim financial statements.
     FASB 154 is effective for accounting changes and corrections of errors made
     in fiscal years beginning after December 15, 2005.



<PAGE>




     In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
     Hybrid Financial Instruments" ("SFAS 155"). SFAS 155 allows any hybrid
     financial instrument that contains an embedded derivatives that otherwise
     would require bifurcation under SFAS No. 133, "Accounting for Derivative
     Instruments and Hedging Activities" to be carried at fair value in its
     entirety, with changes in fair value recognized in earnings. In addition,
     SFAS 155 requires that beneficial interests in securitized financial assets
     be analyzed to determine whether they are freestanding derivatives or
     contain an embedded derivative. SFAS 155 also eliminates a prior
     restriction on the types of passive derivatives that a qualifying special
     purpose entity is permitted to hold. SFAS 155 is applicable to new or
     modified financial instruments in fiscal years beginning after September
     15, 2006, though the provisions related to fair value accounting for hybrid
     financial instruments can also be applied to existing instruments. Early
     adoption, as of the beginning of an entity's fiscal year, is also
     permitted, provided interim financial statements have not yet been issued.
     The company is currently evaluating the potential impact, if any, that the
     adoption of SFAS 155 will have on its consolidated financial statements.

     In March 2006, the FASB issued SFAS 156, "Accounting for Servicing of
     Financial Assets-an amendment of FASB Statement No. 140". This statement
     amends FASB Statement No. 140, "Accounting for Transfers and Servicing of
     Financial Assets and Extinguishments of Liabilities", with respect to the
     accounting for separately recognized servicing assets and servicing
     liabilities. This statement: (1) requires an entity to recognize a
     servicing asset or servicing liability each time it undertakes an
     obligation to service a financial asset by entering into a servicing
     contract in any of the following situations: (a) a transfer of the
     servicer's financial assets that meets the requirements for sale
     accounting, (b) a transfer of the servicer's financial assets to a
     qualifying special-purpose entity in a guaranteed mortgage securitization
     in which the transferor retains all of the resulting securities and
     classifies them as either available-for-sale securities or trading
     securities in accordance with FASB Statement No. 115, "Accounting for
     Certain Investments in Debt and Equity Securities", (c) an acquisition or
     assumption of an obligation to service a financial asset that does not
     relate to financial assets of the servicer or its consolidated affiliates;
     (2) requires all separately recognized servicing assets and servicing
     liabilities to be initially measured at fair value, if practicable; (3)
     permits an entity to choose either of the following subsequent measurement
     methods for each class of separately recognized servicing assets and
     servicing liabilities: (a) Amortization method-Amortize servicing assets or
     servicing liabilities in proportion to and over the period of estimated net
     servicing income or net servicing loss and assess servicing assets or
     servicing liabilities for impairment or increased obligation based on fair
     value at each reporting date, or (b) Fair value measurement method-Measure
     servicing assets or servicing liabilities at fair value at each reporting
     date and report changes in fair value in earnings in the period in which
     the changes occur; (3) at its initial adoption, permits a one-time
     reclassification of available-for-sale securities to trading securities by
     entities with recognized servicing rights, without calling into question
     the treatment of other available-for-sale securities under Statement 115,
     provided that the available-for-sale securities are identified in some
     manner as offsetting the entity's exposure to changes in fair value of
     servicing assets or servicing liabilities that a servicer elects to
     subsequently measure at fair value; and (5) requires separate presentation
     of servicing assets and servicing liabilities subsequently measured at fair
     value in the statement of financial position and additional disclosures for
     all separately recognized servicing assets and servicing liabilities. An
     entity should adopt this statement as of the beginning of its first fiscal
     year that begins after September 15, 2006. Earlier adoption is permitted as
     of the beginning of an entity's fiscal year, provided the entity has not
     yet issued financial statements, including interim financial statements,
     for any period of that fiscal year. The effective date of this Statement is
     the date an entity adopts the requirements of this statement.




<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)



      t) Advertising Costs

      Advertising costs are expensed as incurred.

3.    STOCK OPTION PLANS

                                                                       WEIGHTED
                                                                        AVERAGE
                                                                       EXERCISE
                                                          OPTIONS*        PRICE
                                                         ---------     --------
      a) Options outstanding at December 31, 2004              112
                                                         =========
         Options forfeited during the period                    --
         Options expired during the period                     (25)     $15,688
         Options granted during the period               1,864,572      $   .19
                                                         ---------
         Options outstanding at December 31, 2005        1,864,659
                                                         =========
         Options forfeited during the period                     -
         Options expired during the period                     (5)      $ 3,350
         Options granted during the period                       -
                                                                 -
         Options outstanding at March 31, 2006           1,864,654
                                                         =========


         Options exercisable December 31, 2005           1,864,659      $   .19
         Options exercisable March 31, 2006              1,864,654      $   .19
         Options available for future grant
           December 31, 2005                               137,015
         Options available for future grant
           March 31, 2006                                  137,020

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

      b) Range of Exercise Prices at March 31, 2006

                                      Weighted                         Weighted
                  Outstanding          Average         Options          Average
                     Options*   Remaining Life    Exercisable*   Exercise Price
                     --------   --------------    ------------   --------------

$3,350 to $3,500           82             0.07              82           $3,496
$0.0001 to $0.27    1,864,572             9.57       1,864,572            $0.19

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


<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

c)    Change in Accounting Policy and Pro-forma net income

       At March 31, 2006, the Company has five stock-based employee compensation
       plans, which are described more fully in Note 15(d). Effective January 1,
       2006, the Company's plans are accounted for in accordance with the
       recognition and measurement provisions of Statement of Financial
       Accounting Standards ("FAS") No. 123 (revised 2004), Share-Based Payment
       ("FAS 123(R)"), which replaces FAS No. 123, Accounting for Stock-Based
       Compensation, and supersedes Accounting Principles Board Opinion ("APB")
       No. 25, Accounting for Stock Issued to Employees, and related
       interpretations. FAS 123 (R) requires compensation costs related to
       share-based payment transactions, including employee stock options, to be
       recognized in the financial statements. In addition, the Company adheres
       to the guidance set forth within Securities and Exchange Commission
       ("SEC") Staff Accounting Bulletin ("SAB") No. 107, which provides the
       Staff's views regarding the interaction between SFAS No. 123(R) and
       certain SEC rules and regulations and provides interpretations with
       respect to the valuation of share-based payments for public companies.

       Prior to January 1, 2006, the Company accounted for similar transactions
       in accordance with APB No. 25 which employed the intrinsic value method
       of measuring compensation cost. Accordingly, compensation expense was not
       recognized for fixed stock options if the exercise price of the option
       equaled or exceeded the fair value of the underlying stock at the grant
       date.

       While FAS No. 123 encouraged recognition of the fair value of all
       stock-based awards on the date of grant as expense over the vesting
       period, companies were permitted to continue to apply the intrinsic
       value-based method of accounting prescribed by APB No. 25 and disclose
       certain pro-forma amounts as if the fair value approach of SFAS No. 123
       had been applied. In December 2002, FAS No. 148, Accounting for
       Stock-Based Compensation-Transition and Disclosure, an amendment of SFAS
       No. 123, was issued, which, in addition to providing alternative methods
       of transition for a voluntary change to the fair value method of
       accounting for stock-based employee compensation, required more prominent
       pro-forma disclosures in both the annual and interim financial
       statements. The Company complied with these disclosure requirements for
       all applicable periods prior to January 1, 2006.

       In adopting FAS 123(R), the Company applied the modified prospective
       approach to transition. Under the modified prospective approach, the
       provisions of FAS 123 (R) are to be applied to new awards and to awards
       modified, repurchased, or cancelled after the required effective date.
       Additionally, compensation cost for the portion of awards for which the
       requisite service has not been rendered that are outstanding as of the
       required effective date shall be recognized as the requisite service is
       rendered on or after the required effective date. The compensation cost
       for that portion of awards shall be based on the grant-date fair value of
       those awards as calculated for either recognition or pro-forma
       disclosures under FAS 123.

       There was no stock compensation expense for employee options recorded
       under FAS 123 (R) in the Consolidated Statement of Operations for the
       three months ended March 31, 2006. There was no stock compensation
       expense for employee options recorded under APB No. 25 in the
       Consolidated Statements of Operations for the three months ended March
       31, 2005.

       The Company previously accounted for options granted to its non-employee
       consultants using the fair value cost in accordance with FAS 123 and EITF
       No. 96-18. The adoption of FAS 123(R ) and SAB 107 as of January 1, 2006,
       had no material impact on the accounting for non-employee awards. The
       Company continues to consider the additional guidance set forth in EITF
       Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to
       Other Than Employees" ("EITF 96-18").

       There was no stock compensation expense related to non-employee options
       for the three month periods ended March 31, 2006 or 2005.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)


       Pro Forma Information under SFAS No. 123 for Periods Prior to Adoption of
       FAS 123 ( R):
       -------------------------------------------------------------------------

       The following table illustrates the effect on net income and earnings per
       share as if the fair value recognition provisions of FAS No. 123 had been
       applied to all outstanding and unvested awards in the prior year
       comparable period.

                                                    Three months ended March 31,
                                                                        Restated
                                                                  2005 (note 25)
                                                                  --------------
                                                                               $

       Net loss as reported                                            (140,819)
       Deduct:  Total stock-based employee
       compensation expense determined under
       fair value based method for all awards                              --
       net of related tax effects

       Pro forma net loss                                              (140,819)

       Loss per share:
       Basic and diluted loss per share, as reported                      (0.04)

       Pro forma loss per share                                           (0.04)





 <PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      d) Black-Scholes Assumptions

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

                                            2005 Grants           2001 Grants
                                            -----------           -----------
      Risk free interest rates              4.43 - 4.56%             4.76%
      Volatility factors                     116 - 137%               100%
      Weighted average expected life          10 years             4.90 years
      Weighted average fair value per share     $0.25               $3,700.00
      Expected dividends                         --                    --

      On June 27, 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.

      On November 22, 2005, the Company issued a total of 1,460,000 options at
      an exercise price of $.24 per share to its Management and Directors under
      the 2005 Stock Option Plan which was approved by the Company's
      shareholders at its Annual General Meeting on April 22, 2005, and
      subsequently approved by its Board of Directors. The options vest
      immediately and expire in 2015.

      On December 12, 2005, the Company issued 25,000 options at an exercise
      price of $.27 per share to Mr. Tom Luther, Vice President Sales, under the
      2005 Stock Option Plan. The options vest immediately and expire in 2015.

      There have been no other options granted since 2001.

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

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 $246,609
      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 $246,609. 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 were valued as follows:

      Current assets                                              $  23,616
      Property and equipment                                         11,240
      Other assets                                                  100,909
      Liabilities assumed                                         (107,667)
                                                                  ---------
      Less: consideration                                           246,609
                                                                  ---------
      Goodwill                                                    $ 218,511
                                                                  =========

      At December 31, 2005, the Company wrote off the goodwill from the
      acquisition of TBM Technologies Inc., for impairment based on reduced cash
      flow estimates.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

5.    ACCOUNTS RECEIVABLE
                                                    3/31/06        12/31/05
                                                  ---------       ---------
                                                          $               $
      Accounts receivable                         1,971,497       2,043,214
      Less:  Allowance for doubtful accounts       (207,878)       (201,876)
                                                  ---------       ---------
                                                  1,763,619       1,841,338
                                                  =========       =========
      Allowance for doubtful accounts
      Balance, beginning of period                  201,876         179,648
      Provision                                       6,002          42,051
      Recoveries                                         --         (19,823)
                                                  ---------       ---------
      Balance, end of period                        207,878         201,876
                                                  =========       =========

6.    PROPERTY AND EQUIPMENT

                                                 3/31/06                12/31/05
                                  -----------------------------------   --------
                                               ACCUMULATED
                                       COST   AMORTIZATION        NET        NET
                                  ----------------------------------------------
                                          $              $          $          $

Furniture and equipment             174,746        143,791     30,955     31,734
Computer equipment and software   3,825,629      3,325,120    500,509    524,474
Leasehold improvements               57,422         37,529     19,893     21,481
                                     ------         ------     ------     ------

                                  4,057,797      3,506,440    551,357    577,689
                                  =========      =========    =======    =======

Property and equipment
 under capital lease                257,509        163,336     94,173     99,408
                                    =======        =======     ======     ======

      Amortization of property and equipment for the three months ended March
      31, 2006 amounted to $68,608 including amortization of property and
      equipment under capital lease of $4,933.

      Amortization of property and equipment for the year ended December 31,
      2005 amounted to $280,837 including amortization of property and equipment
      under capital lease of $44,275.

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>
                                                                        3/31/06    12/31/05
                                                                        -------    --------
                                                        ACCUMULATED
                                          ACCUMULATED    IMPAIRMENT
                                  COST   AMORTIZATION        LOSSES         NET         NET
                             --------------------------------------------------------------
<S>                          <C>              <C>         <C>         <C>         <C>
Technical Publications &
Engineering (CadCam Inc.
and TBM Technologies Inc.)   5,955,880        535,164     2,913,164   2,507,552   2,507,552
                             ---------        -------     ---------   ---------   ---------
</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.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      At December 31, 2005, the Company performed its annual impairment test for
      goodwill by first comparing the carrying value of the net assets to the
      fair value of the Technical Publications and Engineering unit. The fair
      value was determined to be less than the carrying value, and therefore a
      second step was performed to compute the amount of the impairment. In this
      process, a fair value for goodwill was estimated, based in part on the
      fair value of the operations, and was compared to its carrying value. The
      shortfall of the fair value below carrying value was $1,241,180 which
      represents the amount of goodwill impairment.

      During the fourth quarter 2005, conditions were present that clearly
      indicated an impairment of the goodwill of TBM Technology Inc., including
      adverse changes in legal factors (see note 22) and business climate as
      well as the projection of continued cash flow losses. As a result of these
      conditions, the full amount of goodwill of $218,511 was written off.

      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

                                                      3/31/06       12/31/05
                                                      -------       --------
                                                            $              $

      Cash surrender value of life insurance           66,920         66,920
      Deferred Financing Costs                        173,094        192,424
                                                      =======        =======

      Total                                           240,014        259,344
                                                      =======        =======

      Included in Other Assets are deferred financing costs related to the
      Laurus Convertible Financing Facility to be amortized over the three-year
      term of the debt, beginning July 1, 2005. Amortization of other assets for
      the three months ended March 31, 2006 amounted to $19,324. Amortization of
      other assets for the year ended December 31, 2005 amounted to $89,919
      including amortization of $51,551 on customer lists acquired on January
      17, 2005 (Note 4) the balance of which $53,799 was written off for
      impairment at year-end.

9.    RECEIVABLE DISCOUNT FACILITY

      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.

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 6.75% per
      annum.

11.   12% CONVERTIBLE DEBENTURE

      At December 31, 2005, the amortization of the beneficial conversion
      feature on all issued convertible debentures was determined to be $474,302
      which was 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 $505,340 was expensed as interest.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

12.   CONVERTIBLE FINANCING FACILITY

      On June 27, 2005, the Company closed a $3,500,000 convertible financing
      facility with Laurus Master Fund, Ltd. ("Laurus"). The facility consists
      of a secured convertible note ("Minimum Borrowing Note") 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% ("contract rate") but never less than 8%. At closing, the Company
      received $2,100,000 in proceeds from the facility based on its eligible
      accounts receivable ("formula amount") and an additional $1,000,000
      ("overadvance") granted in excess of the formula amount. The overadvance
      bears interest at the prime rate as published by the Wall Street Journal
      plus 2% and held an expiration date of December 27, 2005. In the event
      that the overadvance was not repaid in full by this date, the interest
      rate was to increase by an additional 1% per month.

      Laurus has the option to convert into common stock at anytime all or any
      portion of the principal and interest and fees payable at a fixed
      conversion price as follows:

      -     first $1,000,000 in principal convertible at a fixed price of $0.40
            (80% of the average price for 10 days prior to closing of debt);
      -     next $1,000,000 in principal convertible at a fixed price of $0.50
            (100% of the average price for 10 days prior to closing of debt);
      -     and, any remaining principal convertible at a fixed price of $0.53
            (105% of the average price for 10 days prior to closing of debt).

      Should the Company complete a subsequent financing at a lower price than
      the original issue, the conversion prices of the three tranches above will
      be adjusted to 80%, 100% and 105% of the new lower price. This feature
      would modify the number of shares that the Company will issue on
      conversion of the notes.

      The Company has the option of prepaying the note at any time by paying to
      the holder a sum of money equal to 130% of the principal amount of the
      note.

      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 vest immediately and expire on June 27, 2011. The
      Company also issued options 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 vest immediately and expire on June 27, 2015.

      The financing included a Registration Rights Agreement which prescribes
      that the Company shall have caused a registration statement to be filed
      with the SEC, in respect of the securities covered by the Minimum
      Borrowing Note, Warrants and Options within 30 days of closing and to
      cause the registrations to become effective within 90 days of closing. In
      the event that the Company fails to file such registration statement, the
      agreement also provides that the Company shall pay to Laurus, as partial
      damages, for each day that an Event has occurred and is continuing, an
      amount in cash equal to one-thirtieth (1/30th) of the product of: (A) the
      original principal amount of each Minimum Borrowing Note outstanding at
      such time multiplied by (B) 0.02. In the event the Company fails to make
      any such payments in a timely manner, Section 1 of the Registration Rights
      Agreement also provides that such payments shall bear interest at the rate
      of 1.5% per month (prorated for partial months) until paid in full.

      Assuming a successful registration of the shares and warrants, if the
      market price of the Company's common stock exceeds the then applicable
      fixed conversion price by at least 25%, the contract rate for the
      succeeding calendar month shall automatically be reduced by 100 basis
      points (1%) for each incremental 25% increase in the market price of the
      common stock above the then applicable fixed conversion price.

      The Company determined that the conversion option embedded in the note and
      the warrants and options attached to the note qualify as embedded
      derivatives under the guidance of SFAS No. 133, "Accounting for Derivative
      Instruments and Hedging Activities" and EITF Issue No. 00-19, "Accounting
      for Derivative Financial Instruments Indexed to, and Potentially Settled
      in, a Company's Own Stock" and as such should be accounted for separately
      at inception at their fair value and subsequently marked to market. The
      total of the embedded derivatives was separated from the debt based on the
      initial amount of $3,100,000. The initial value of the derivatives and
      "embedded derivatives" is offset against the Laurus financing and will be
      amortized over a 3-year period subject to the expected availability. The
      conversion right and interest adjustment clause found in the note were
      considered one embedded derivative and the warrants and options were each
      considered separate derivatives.

      As the embedded derivatives are not standard and are not publicly quoted,
      a combination of Black-Scholes methodologies and Monte Carlo simulations
      were used. Valuations were performed at each quarter end and the
      conversion option, warrants and options were each valued separately. As
      the Company has no public rating or no public debt, it is very difficult
      to estimate the potential change of the credit spread between the issue
      date and valuation dates. Moreover, there is no evidence of any material
      event that could change significantly the credit spread of the issue. A
      constant credit spread equal to 300 basis points as per the issue date was
      therefore assumed in the valuation. For the valuation as of December 31,
      2005 an assumption of 158% volatility was used and for the valuation at
      March 31, 2006, an assumption of 142% volatility was used.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      Conversion Option

      As the issue is a floating rate note, it is inferred that it will
      substantially be always equal to par ($3,100,000 USD). The implied number
      of conversion options will be derived by dividing the notional by the
      average conversion price. As showed in the table below, the conversion
      price was calculated using the weighted average conversion price for each
      tranche. This option was valued using a standard Black-Scholes model.

                                                                 Weighted
             Tranche         Notional      Conversion Price      Average
             -------         --------      ----------------      -------
            Tranche 1       1,000,000             0.4             0.1290
            Tranche 2       1,000,000             0.5             0.1613
            Tranche 3       1,100,000            0.53             0.1881
                            =========                            =======
              Total         3,100,000                             0.4784

      The interest rate adjustment clause contained in the conversion option
      sets that if the stock price exceeds the prevailing conversion price by a
      certain level, interest payments on the floating rate note will be
      reduced. This clause diminishes the conversion options fair value as the
      holder will be penalized when the conversion option will be in the money.
      The fair value for this clause is dependant on the expected behaviour of
      the prime rate and the Company's stock price. This clause was valued using
      a Monte Carlo simulation model using a mean reversion process to simulate
      the prime rate and a standard Geometric Brownian motion process for the
      Company's stock price.

      The 8% floor on interest rate clause contained in the conversion option
      was valued using a Monte Carlo simulation model with a mean reversion
      process to simulate the prime rate. As the value of the floor option was
      determined to be relatively insignificant ($29,000 liability as of
      December 31, 2005 and $700 liability as of March 31, 2006 representing an
      impact on the fair value of 1% and .025%respectively for the valuations),
      it was ignored in the valuation of the conversion option. The impact of
      this analysis will be performed at each valuation date. If the model shows
      that the floor option would have a significant impact on the market value,
      the conversion option will have to be valued using a different model that
      will implicitly account for the floor option such as the binomial model.

      The 5% limitation upon issuance of shares was ignored in this valuation
      based on the assumption that it is a liquidity feature that would not
      significantly impact the valuation.

      Warrants and Options

      Valuation of the warrants and options were performed separately using
      standard Black-Scholes methodology. As the Company would be required to
      issue new shares for these instruments it used a valuation with a dilution
      effect.

      Valuation Results

          Derivative                         3/31/06       12/31/05
          ----------                         -------       --------
          Conversion Options                $302,640       $452,928
          Interest Adjustment Clause        ($16,178)      ($28,687)
          Warrants                          $380,729       $393,100
          Options                             70,273        $87,848
                                            --------       --------
                                            $737,464       $905,189
                                            ========       ========

      During the three months ended March 31, 2006, the Company amortized
      $142,105 of the initial value of the derivatives and embedded derivatives
      which are included in financing costs. The mark to market of the
      derivatives including the embedded derivatives at the end of each period
      was credited to financing costs in the amount of $266,313.

      During the year ended December 31, 2005 the Company amortized $275,135 of
      the initial value of the derivatives and embedded derivatives which is
      included in financing costs. The mark to market of the derivatives
      including the embedded derivatives at the end of each period was credited
      to financing costs in the amount of $723,008.

      On December 8, 2005, the Company and Laurus entered into an amendment of
      the Security Agreement pursuant to which Laurus agreed to waive (i) any
      event of default by the Company relating to the Company's non-payment of
      any liquidated damages associated with its non-filing of its Registration
      Statement and (ii) any liquidated damages associated with its non-filing
      of its Registration Statement that had accrued and were due and payable as
      of the date of December 8, 2005. In addition, the filing and effective
      dates for the Registration Statement were extended to January 31, 2006 and
      March 30, 2006, respectively.

      Due to its ongoing discussion with the SEC, the Company failed to file and
      cause to be effective a registration statement by March 30, 2006. Laurus
      has agreed to waive the event of default and associated liquidated damages
      and to extend the filing deadline until July 1, 2006.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      On January 26, 2006, the Company and Laurus executed an Overadvance Side
      Letter whereby Laurus increased the overadvance amount on the revolving
      note to $1,200,000 ("Second Overadvance"). The second overadvance bears
      interest at the prime rate as published by the Wall Street Journal plus
      2%. The second overadvance expires on July 27, 2006. In the event that the
      overadvance is not repaid in full by this date, the interest rate will be
      increased by an additional 1% per month. In consideration of the Second
      Overadvance, the Company issued 500,000 additional common stock purchase
      warrants with an exercise price of $0.01 per share which expire on January
      26, 2012. Using the standard Black-Scholes methodology, these warrants
      were valued to be $98,588 which is being offset against the Laurus
      financing and will be amortized over the remaining term of the debt.

      At the end of each period, the balance on the Laurus facility was as
      follows:

                                                    3/31/06          12/31/05
                                                    -------          --------
                                                          $                 $
      Principal balance                           2,688,110         2,522,219
                                                 ----------        ----------
      Deferred Financing Costs                   (1,309,001)       (1,353,063)
                                                 ----------        ----------
      Total                                       1,379,109         1,169,156
                                                 ==========        ==========

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

13.   ACCOUNTS PAYABLE

      Included in accounts payable at the end of each period are the following:

                                                    3/31/06          12/31/05
                                                    -------          --------
                                                          $                 $
     Trade payables                                 306,093           276,486
     Accrued payroll and payroll liabilities        510,363           266,343
     Accrued bonuses                                 86,537           130,866
     Accrued professional fees                      234,425           245,368
     Other                                          170,682           247,189
                                                 ----------        ----------
                                                  1,308,100         1,166,152
                                                 ==========         =========

14.   LONG-TERM DEBT

      i) March 31, 2006

      At March 31, 2006, the Company had a loan balance of $168,775 with Terry
      Lyons with monthly payments of $10,000. The loan bears interest at US
      prime plus 14%. Mr. Lyons agreed to defer the monthly payments from
      February to June 2006, to assist the Company with cash flow. The increase
      in the principal balance reflects the accrued and unpaid interest as at
      March 31, 2006.

      ii) December 31, 2005

      At December 31, 2005, the Company had a loan balance of $163,987 with
      Terry Lyons with monthly payments of $10,000. The loan bears interest at
      US prime plus 14%.

                                                    3/31/06          12/31/05
                                                    -------          --------
                                                          $                 $
      a) Included therein:

      A secured 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 Laurus Master Fund, Ltd.
      and matures July 2007.                       $168,775           163,987

      Various capital leases secured by
      property and equipment with various
      payment terms and interest rates ranging
      from 10-22%. These leases mature between
      April 2006 and July 2007.                      29,276            30,165
                                                 ----------        ----------
                                                    198,051           194,152

      Less: current portion                         107,249           124,326
                                                 ----------        ----------
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

                                                     90,802            69,826
                                                 ==========        ==========

      b) Future principal payments obligations as at March 31, 2006, were as
      follows:

            2006              85,285
            2007             105,813
            2008               6,953
            2009                  --
            2010                  --
                            --------
                            $198,051
                            ========

      c) Interest expense related to long-term debt was $19,585 for the three
      months ended March 31, 2006 and $53,132 for the year ended December 31,
      2005.

15.   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

      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 $246,609.

      During the year ended December 31, 2005, the Company issued 1,366,495*
      shares of its common stock to the 12% Senior Secured Convertible Debenture
      holders upon the conversion of $338,616 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.

      On July 1, 2005 the Company issued 294,118* shares of its common stock, no
      par value per share, 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, no par value per share, 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 per share, 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 warrants shall
      have "piggyback" registration rights. Using the Black-Scholes pricing
      model, the fair value of the warrants was determined to be $57,057 and is
      included in selling expenses at December 31, 2005.

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

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(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*
             3/31/06        12/31/05     Exercise price per share    Expiry date
      --------------------------------------------------------------------------
                  --              --                   $16,200.00           2004
                  --              --                $16,250.00 to           2005
                                                       $18,550.00
                  --              --                   $12,300.00           2005
                  --              --       $3,150.00 to $5,000.00           2005
                  --              20                    $7,500.00           2006
                 133             213                    $2,750.00           2006
                  --              --                      $400.00           2007
             500,000         500,000                        $0.41           2007
             100,000         100,000                        $1.20           2007
                 124             124                      $200.00           2009
               2,400           2,400                       $87.50           2009
                  --              --                        $3.75           2009
                  --              --                        $2.00           2009
                 229             229                        $1.25           2009
               1,714           1,714                       $87.50           2010
               2,857           2,857                       $43.75           2010
              13,333          13,333                        $3.75           2010
                  --              --                        $2.00           2010
               9,083           9,083                        $1.25           2010
                  --              --                        $1.00           2010
                  --              --                        $2.00           2011
                  --              --                        $1.40           2011
              47,388          47,388                        $1.25           2011
              62,500          62,500                        $1.00           2011
           1,050,000       1,050,000                        $0.55           2011
           1,050,000       1,050,000                        $0.60           2011
             500,000              --                        $0.01           2012
      --------------------------------------------------------------------------
           3,339,761       2,839,861
      --------------------------------------------------------------------------

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

      Outstanding at December 31, 2004            1,811,389*
                                                 ----------
      Issued                                      2,700,000
      Cancelled                                  (1,671,189)
      Exercised                                          --
      Expired                                          (339)
                                                 ----------
      Outstanding at December 31, 2005            2,839,861*
                                                 ----------
      Issued                                        500,000
      Cancelled                                          --
      Exercised                                          --
      Expired                                          (100)
                                                 ----------
      Outstanding at December 31, 2005            3,339,761*
                                                 ==========

      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.

      As disclosed in Note 15(b), on July 7, 2005, the Company issued 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 to
      Financial Media Relations LLC. The warrants shall be exercisable for a
      period of two years, shall vest immediately and be deemed earned upon
      issuance, and all warrants shall have "piggyback" registration rights.
      Using the Black-Scholes pricing model, the fair value of the warrants was
      determined to be $57,057 and is included in selling expenses.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      As disclosed in Note 12, on January 26, 2006, the Company issued 500,000*
      additional common stock purchase warrants to Laurus Master Fund, Ltd. with
      an exercise price of $0.01 per share and expire on January 26, 2012.

      * 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. Under the
      plans, a total of 2,001,674 options were authorized to be granted to
      officers, directors, consultants, key employees, advisors and similar
      parties who provide their skills and expertise to the Company. At March
      31, 2006, 1,864,654 options remain outstanding and 137,020 options are
      available for future grant. At December 31, 2005, 1,864,659 options remain
      outstanding and 137,015 options are available for future grant.

      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.

      On November 22, 2005, the Company issued a total of 1,460,000 options at
      an exercise price of $.24 per share to its Management and Directors under
      the 2005 Stock Option Plan which was approved by the Company's
      shareholders at its Annual General Meeting on April 22, 2005, and
      subsequently approved by its Board of Directors. The options vest
      immediately and expire in 2015.

      On December 12, 2005, the Company issued 25,000 options at an exercise
      price of $.27 per share to Mr. Tom Luther, Vice President Sales, under the
      2005 Stock Option Plan. The options vest immediately and expire in 2015.

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

16.   DEFERRED INCOME TAXES AND INCOME TAXES

      a) Deferred Income Taxes

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

                                                          3/31/06      12/31/05
                                                          -------      --------
                                                                $             $
      Losses available to offset future income taxes    5,477,000     5,221,000
      Deferred costs and customer lists                    33,000        33,000
      Share and debt issue costs                          (14,000)      126,000
      Property and equipment                              958,000       949,000
                                                       ----------     ---------
                                                        6,454,000     6,329,000

      Less: valuation allowance                         6,454,000     6,329,000
                                                       ----------     ---------
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      b) Current Income Taxes

      Current income taxes consist of:

                                                          3/31/06      12/31/05
                                                          -------      --------
                                                                $             $
      Amounts calculated at statutory rates              (148,662)     (581,881)
                                                       ----------     ---------
      Permanent differences                                31,505       304,304
      Valuation allowance                                 125,000       417,000
                                                       ----------     ---------
                                                          156,505       721,304
                                                       ----------     ---------
      Current income taxes                                  7,843       139,423
                                                       ==========     =========

      Issue expenses totaling approximately $508,000 may be claimed at the rate
      of 20% per year with $322,000 until 2006, and $186,000 until 2009. 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 $13,000,000, nor a capital loss totaling $750,000
      in the future as a deferred tax asset as at March 31, 2006. As at the
      completion of the March 31, 2006 financial statements, management believed
      it was more likely than not that the results of future operations would
      not generate sufficient taxable income to realize the deferred tax assets.

17.   COMPREHENSIVE LOSS

                                                          3/31/06      12/31/05
                                                          -------      --------
                                                                $             $
      Net loss                                           (371,656)   (2,835,306)
      Other comprehensive loss
         Cumulative adjustment to market value                 --            --
         Foreign currency translation adjustments          10,033        (8,909)
                                                         --------    ----------
      Comprehensive loss                                 (361,623)   (2,844,215)
                                                         ========    ==========

      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.

18.   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 months ended
      March 31, 2006 and 2005. The net loss for the technology operations for
      the three months ended March 31, was nil in 2006 and $4,600 in 2005.

      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 months ended March 31, 2006
      and 2005. The net loss for the training division for the three months
      ended March 31, was nil in 2006 and $4,500 in 2005.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      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 revenue or losses attributable to the IT recruitment division
      for the three months ended March 31, 2006 and 2005.

      The following table presents the revenues, income (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:

                                                    Three months ended March 31,
                                                                       Restated
                                                           2006   2005 (note 25)
                                                           ----   --------------
                                                                              $
      Revenues                                               --              --
                                                           ----         -------
      Loss from operations before income taxes               --          (4,536)

      Provision for Income Taxes                             --           4,597
                                                           ----         -------
      Loss from discontinued operations                      --          (9,133)
                                                           ====         =======

19.   SCHEDULE OF NON-CASH ITEMS PER STATEMENT OF CASH FLOW

      The Company issued common shares and warrants for the following:

                                                    Three months ended March 31,
                                                                       Restated
                                                           2006   2005 (note 25)
                                                           ----   --------------
                                                              $               $
      Services rendered                                      --              --
      Accounts payable                                       --              --
                                                           ----         -------
                                                             --              --
                                                           ====         =======

20.   SEGMENTED INFORMATION

      a) Revenue and Gross Profit by Geographic Area

                                                    Three months ended March 31,
                                                                       Restated
                                                           2006   2005 (note 25)
                                                           ----   --------------
                                                              $               $
      Revenue
        Canada                                          432,910         296,644
        United States of America                      2,477,404       3,306,295
                                                      ---------       ---------
                                                      2,910,314       3,602,939
                                                      =========       =========
      Gross Profit
        Canada                                          166,133         100,243
        United States of America                        655,251       1,171,926
                                                      ---------       ---------
                                                        821,384       1,272,169
                                                      =========       =========

      b) Net Income (Loss) by Geographic Area

                                                    Three months ended March 31,
                                                                       Restated
                                                           2006   2005 (note 25)
                                                           ----   --------------
                                                              $               $
      Canada                                           (153,010)       (673,827)
      United States of America                         (218,646)        533,008
                                                      ---------       ---------
                                                       (371,656)       (140,819)
                                                      =========       =========
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      c) Identifiable Assets by Geographic Area

                                                        3/31/06        12/31/05
                                                      ---------       ---------
                                                              $               $
      Canada                                            765,124         811,119
      United States of America                        4,513,581       4,641,133
                                                      ---------       ---------
                                                      5,278,705       5,452,252
                                                      =========       =========

      d) Revenues from Major Customers and Concentration of Credit Risk

      The consolidated entity had the following revenues from major customers:

      For the three months ended March 31, 2006, one customer had sales of
      $412,614, representing approximately 14% of total revenue. For the three
      months ended March 31, 2005, one customer had sales of $1,385,218,
      representing approximately 38% of total revenue.

      e) Purchases from Major Suppliers

      There were no significant purchases from major suppliers.

21.   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.

                                                    Three months ended March 31,
                                                                       Restated
                                                           2006   2005 (note 25)
                                                           ----   --------------
                                                              $               $

      NUMERATOR
      Loss from continuing operations                  (371,656)       (131,686)

      Loss from discontinued operations                      --          (9,133)
                                                      ---------       ---------
      Net loss                                         (371,656)       (140,819)
                                                      =========       =========
      DENOMINATOR
      Weighted Average common stock outstanding*      4,369,147       3,685,690
                                                      =========       =========
      Basic and diluted loss per common share from
      continuing operations                               (0.09)          (0.04)
                                                      =========       =========
      Basic and diluted loss per common share after
      discontinued operations                             (0.09)          (0.04)
                                                      =========       =========
      Average common stock outstanding*               4,369,147       3,685,690
      Average common stock issuable                          --              --
                                                      ---------       ---------
      Average common stock outstanding assuming
      dilution*                                       4,369,147       3,685,690
                                                      =========       =========

      The outstanding options and warrants as detailed in note 15 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.

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

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

22.   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 March 31, 2006, for the next five years are as follows:

                     2006        $275,919
                     2007         400,903
                     2008         260,861
                     2009         140,477
                     2010         140,477
               Thereafter              --
                               ----------
                               $1,218,636
                               ==========

      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. Subsequent to the year end, the Company was notified by
      the purchaser that they had failed to meet their rent obligations and
      currently had rent arrears of approximately $80,000. The lessor has filed
      a claim against the purchaser and the Company demanding payment of the
      rent arrears and for the purchaser to vacate the premises immediately.
      Although the Company intends to defend this claim vigorously, it may be
      held liable for the rent arrears plus the balance of the lease which
      expires August 31, 2006 for an additional amount of $115,000.

      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 November 3, 2005, the Company terminated the service agreement of
      the vendors of TBM Technologies Inc., acquired on January 17, 2005, for
      what it believes is a material breach of the agreement by the vendors. The
      vendors are seeking termination pay from the Company in the amount of
      approximately $40,000. The Company intends to defend this claim vigorously
      and counterclaim for losses suffered as well as jeopardy to its reputation
      by the actions of the vendors.

      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.

23.   SUBSEQUENT EVENTS

      On January 3, 2006, the Company executed a Letter of Intent to acquire an
      engineering services firm located in New Jersey. The purchase price will
      be calculated at five times audited 2005 EBIT of the Seller and will be
      payable as follows: thirty percent in cash; twenty per cent in a two year
      subordinated note bearing annual interest at US prime, payable quarterly
      and guaranteed by the Company; twenty-five per cent in the Company's
      common shares; and, twenty-five per cent in the Company's preferred shares
      which will be convertible into common shares. The acquisition is subject
      to due diligence and the audit of the Seller's 2005 and 2004 financial
      statements which is currently being performed.

24.   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 14% 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.
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2006
(AMOUNTS EXPRESSED IN US DOLLARS)

      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.

      The fair value of the Company's debt instruments with embedded derivatives
      are measured separately at the end of each period using a combination of
      Black-Scholes methodologies and Monte Carlo simulations. As the Company
      has no public rating or no public debt, it is very difficult to estimate
      the potential change of the credit spread between the issue date and
      valuation dates. Moreover, there is no evidence of any material event that
      could change significantly the credit spread of the issue. A constant
      credit spread equal to 300 basis points as per the issue date was
      therefore assumed in the valuation and current volatility rates were used.
      Changes in the fair value of derivates are charged to current earnings.

25.   RESTATEMENTS

      The accompanying financial statements for the three months ended March 31,
      2005 have been restated to correct accounting errors for the beneficial
      conversion feature on convertible debentures.

      During the period December 2002 until November 2004, the Company issued
      12% Senior Secured Convertible Debentures in the aggregate principal
      amount of $5,025,000, which debentures were subsequently converted or
      repaid by June 27, 2005. The value assigned to the beneficial conversion
      feature on the debentures was credited to paid in capital and charged to
      earnings as interest expense on the date of issuance. The Company has
      determined, in accordance with Issue 6 of Emerging Task Force No. 00-27
      "Application of Issue No. 98-5 to Certain Convertible Instruments" ("EITF
      00-27"), that the value of the beneficial conversion feature should be
      accreted to interest expense from the date of issuance to the stated
      redemption date.

      The Company recorded the value of the beneficial conversion feature in
      excess of the amount of proceeds allocated to the convertible instruments.
      The Company has determined, in accordance with Paragraph 6 of Emerging
      Task Force No. 98-5 "Accounting for Convertible Securities with Beneficial
      conversion Features or Contingently Adjustable Conversion Ratios"
      ("EITF98-5"), that the calculated amount of the beneficial conversion
      feature should be limited to the amount of proceeds allocated to the
      convertible instrument.

      The Company has amended its financial statements for the three months
      ended March 31, 2005 to limit the value of the beneficial conversion
      feature to the amount of proceeds allocated to the convertible debenture
      and to amortize the beneficial conversion feature from the date of
      issuance to the stated redemption date.

      The effect of this restatement was to decrease the Company's net loss by
      $4,269. This restatement concerns a non-cash item.

      The following table quantifies the EPS impact of this restatement:

                                                                 Operating
                                                                 Earnings (Loss)
                                                       Amount    per Share
      --------------------------------------------------------------------
      Net loss, as reported in March 31, 2005
        Form 10Q-SB to correct accounting error
        for recording beneficial conversion
        feature on convertible debentures           $(145,088)       (0.04)
      Revised net loss                                  4,269        (0.00)
                                                    ----------------------
                                                    $(140,819)       (0.04)
                                                    ======================

26.   COMPARATIVE FIGURES

      Certain figures in the March 31, 2005 financial statements have been
      reclassified to conform with the basis of presentation used at March 31,
      2006.
<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

      We focus 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 believe we are poised to benefit from the increased demand
generated by aerospace and defense-related customers who we expect 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 intend to 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.
<PAGE>

                      STATEMENTS OF OPERATIONS--PERCENTAGES
                      FOR THE THREE MONTHS ENDED MARCH 31,

                                                           2006         2005
                                                           ----         ----
                                                              %            %
REVENUE                                                     100          100

COST OF SERVICES                                             72           65
                                                           ----         ----
GROSS PROFIT                                                 28           35

EXPENSES
  ADMINISTRATIVE                                             21           16
  SELLING                                                    16           10
  DEPRECIATION AND AMORTIZATION                               3            2
  WRITE DOWN OF PROPERTY AND EQUIPMENT                       --           --
  FINANCING COSTS                                            (4)          --
                                                           ----         ----
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INTEREST CHARGES AND INCOME TAXES                            (8)           7

  INTEREST CHARGES                                            5           10
                                                           ----         ----
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES         (13)          (3)

INCOME TAXES                                                 --           --
                                                           ----         ----
LOSS FROM CONTINUING OPERATIONS                             (13)          (3)

INCOME (LOSS) FROM DISCONTINUED OPERATIONS                   --           (1)
                                                           ----         ====
NET LOSS                                                    (13)          (4)
                                                           ====         ====
<PAGE>

RESULTS OF OPERATIONS

THE THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2005

REVENUE

Our revenue is comprised of engineering services including the complete
planning, staffing, development, design, implementation and testing of a
project. It can also involve enterprise-level planning and project anticipation.
Our specialized engineering services include: design, build and drafting,
technical publications and documentation. We outsource our technical
publications and engineering services on both a time and materials and project
basis. Customers we provide engineering services to include General Dynamics,
General Electric, General Motors, Lockheed Martin, Cummins Engines, ABB, Eaton
Aerospace, Remy, America Inc., Toyota, Atlas Copco and Comdev Space Group.

For the three months ended March 31, 2006, we derived 85% of our revenue in the
United States compared to 92% for the three months ended March 31, 2005. This
decrease is a result of our focus on expanding our engineering service offerings
in Ontario, Canada and the increase in sales from this location of $135,000 or
46% from $295,000 for the three months ended March 31, 2005 to $430,000 for the
three months ended March 31, 2006.

Consolidated revenues for the three months ended March 31, 2006 decreased by
$690,000 or 19% to $2,910,000 as compared to $3,600,000 for the three months
ended March 31, 2005. This decrease is largely attributable to the decline in
sales of approximately $970,000 from one major customer located in the United
States who represented 38% of our consolidated revenue for the three months
ended March 31, 2005 compared to 14% for the three months ended March 31, 2006.

COSTS OF SERVICES

The direct costs of engineering services include wages, benefits, software
training and project expenses. Costs of services for the three months ended
March 31, 2006 decreased by $240,000 or 10% to $2,090,000 as compared to
$2,330,000 for the three months ended March 31, 2005. This decrease is largely
attributable to the decrease in revenue. As a percentage of revenue, however,
the cost of services for the three months ended March 31, 2006 increased from
65% in 2005 to 72% in 2006. This increase is related to the additional hardware
and software expenses originally procured in 2005 to support our major customer
and which were not utilized and therefore non-billable during the three months
ended March 31, 2006.

GROSS PROFIT

Gross profit is calculated by subtracting all direct costs from net revenue.
Gross profit for the three months ended March 31, 2006 decreased by $450,000, or
35%, to $820,000 compared to $1,270,000 for the three months ended March 31,
2005. As a percentage of revenue, gross profit for the three months ended March
31, 2006 was 28% compared to 35% in 2005. The decrease in gross profit can be
attributed to the aforementioned non-billable expenses as well as the addition
of lower margin engineering projects as a means of establishing new clients and
the increase in lower margin contract placement sales.

EXPENSES

Total expenses for the three months ended March 31, 2006 were $1,040,000 which
is the same as 2005.

ADMINISTRATIVE EXPENSES

Administrative expenses increased by $20,000 or 3% to $600,000 for the three
months ended March 31, 2006 compared to $580,000 for the three months ended
March 31, 2005. This increase is largely attributable to an increase in legal
and accounting fees. As a percentage of revenue, administrative expenses for the
three months ended March 31, 2006 was 21% compared to 16% in 2005.
<PAGE>

SELLING EXPENSES

Selling expenses increased by $100,000, or 27%, to $470,000 for the three months
ended March 31, 2006 compared to $370,000 for the three months ended March 31,
2005. This increase is attributable to the additional salaries of new sales
staff hired during the later part of 2005 and early 2006. As a percentage of
revenue, selling expenses for the three months ended March 31, 2006 was 16%
compared to 10% in 2005.

DEPRECIATION AND AMORTIZATION

For the three months ended March 31, 2006, depreciation and amortization
expenses increased by $10,000, or 12%, to $90,000 compared to $80,000 for the
three months ended March 31, 2005. As a percentage of revenue, depreciation and
amortization expenses increased to 3% for the three months ended March 31, 2006
compared to 2% in 2005.

WRITE DOWN OF PROPERTY AND EQUIPMENT

During the three months ended March 31, 2005, we wrote down property and
equipment in the amount of $3,851. 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.

FINANCING COSTS

During the three months ended March 31, 2006, we amortized $142,105 of the
initial value of the derivatives and embedded derivatives attached to the Laurus
Master Fund, Ltd. convertible debt financing closed on June 27, 2005. At March
31, 2006, the fair value of the derivates and embedded derivatives were
marked-to-market with a total of $266,313 credited to financing costs. There
were no financing costs during the three months ended March 31, 2005.

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INTEREST CHARGES AND INCOME
TAXES

For the three months ended March 31, 2006, loss from continuing operations
before interest charges and income taxes increased to a loss of $220,000
compared to income of $230,000 for the three months ended March 31, 2005.

INTEREST CHARGES

For the three months ended March 31, 2006, interest charges decreased by
$220,000, or 61%, to $140,000 from $360,000 for the three months ended March 31,
2005. This decrease is largely attributable to the reduced interest expense on
the beneficial conversion feature recognized on convertible debt. Included in
the interest charges for the three months ended March 31, 2006 is $110,000 paid
on the revolving convertible note balance and overadvance with Laurus Master
Fund, Ltd. and $30,000 on various loans and leases. Included in the interest
charges for the three months ended March 31, 2005 is $270,000 in beneficial
conversion expense and $20,000 in interest paid to the convertible debenture
holders in share on conversion. Also included in interest charges for the three
months ended March 31, 2005 is interest of $70,000 paid on the receivable
discount facility with Morrison Financial Services Limited as well as various
loans and leases.

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

For the three months ended March 31, 2006, loss from continuing operations
before income taxes increased by $240,000 or 200% to a loss of $360,000 compared
to a loss of $120,000 in 2005.

INCOME TAXES

Income tax expense for the three months ended March 31, 2006 was $8,000 which is
the same for 2005.

LOSS FROM CONTINUING OPERATIONS

Loss from continuing operations for the three months ended March 31, 2006
increased by $240,000 or 184% to a loss of $370,000 compared to a loss of
$130,000 for the three months ended March 31, 2005.
<PAGE>

LOSS FROM DISCONTINUED OPERATIONS

Operations of the technology, training and IT recruitment divisions have been
reported as discontinued for the three months ended March 31, 2006 and 2005.

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. As we will not have future revenues from either its
Njoyn or Secondwave products, the technology operations have been reported as
discontinued. There was no technology revenue for the three months ended March
31, 2006 and 2005. The net loss for the technology operations for the three
months ended March 31, was nil in 2006 and $5,000 in 2005.

Effective May 1, 2002, we 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, we 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, 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 March 31,
2006 and 2005. The net loss for the training division for the three months ended
March 31, was nil in 2006 and $5,000 in 2005.

Effective June 27, 2003, we signed an agreement with Brainhunter.com Ltd., an
Ontario company, for the purchase of certain assets of the Toronto IT
recruitment division for a nominal amount of cash and the assumption of all
employee liabilities. The gain on disposal was $190,627 of which we received
$146,627 on closing with the balance of $44,000 due in a promissory note payable
by June 27, 2004. On June 8, 2005, we collected approximately $40,000 on the
promissory note and forgave the balance. As a result of this transaction, we
will not have future revenues from its IT recruitment division and therefore the
operations have been reported as discontinued.

There was no revenue or losses attributable to the IT recruitment division for
the three months ended March 31, 2006 and 2005.

NET LOSS

For the three months ended March 31, 2006, net loss increased by $230,000 or
164% to a net loss of $370,000 compared to a net loss of $140,000 for the three
months ended March 31, 2005.

LIQUIDITY AND CAPITAL RESOURCES

With insufficient working capital from operations, our primary source of cash is
a convertible financing facility with Laurus Master Fund, Ltd. At March 31,
2006, the principal balance on the loan facility was $2,690,000.

At March 31, 2006, we had cash of $100,000 and a working capital deficiency of
$1,100,000. At March 31, 2006, we had a cash flow deficiency from operations of
$200,000. At March 31, 2005, we had cash of $220,000 and a working capital
deficiency of $30,000. At March 31, 2005, we had a cash flow deficiency from
operations of $90,000.
<PAGE>

At March 31, 2006, we had a cash flow deficiency from investing activities of
$5,000 related to the purchase of property and equipment. At March 31, 2005, we
had a cash flow deficiency from investing activities of $130,000 also related to
the purchase of property and equipment.

At March 31, 2006 we had cash flow from financing activities of $150,000 largely
attributable to proceeds from the convertible financing facility with Laurus. At
March 31, 2005, we had cash flow from financing activities of $260,000
attributable primarily to proceeds from the receivable discount facility with
Morrison Financial Services Limited.

At March 31, 2006 we had a loan balance of $170,000 with an individual, Terry
Lyons. The loan is payable in monthly installments of $10,000 and bears interest
at US prime plus 14% per annum. The loan is secured and is subordinated to
Laurus. Mr. Lyons agreed to defer the monthly payments from February to June
2006 to assist with cash flow.

At March 31, 2006, we had approximately $30,000 outstanding on various capital
leases secured by property and equipment with various payment terms and interest
rates ranging from 10% to 22%. The maturity dates on these leases range from
April 2006 to July 2007.

Although we believe that our current working capital and cash flows from
continuing 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 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 the
effectiveness of a registration statement registering the shares and warrants
underlying the Laurus facility, 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.
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

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 we do not hold 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.
Effective January 1, 2006 the Company adopted this standard using the modified
prospective 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 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.
<PAGE>


In May 2005, the FASB issued Statement No. 154, "Accounting Changes and Error
Corrections", applying to all voluntary accounting principle changes as well as
the accounting for and reporting of such changes. SFAS No. 154 requires
voluntary changes in accounting principle be retrospectively applied to
financial statements from previous periods unless such application is
impracticable. SFAS No. 154 requires that changes in depreciation, amortization,
or depletion methods for long-lived, non-financial assets must be accounted for
as a change in accounting estimate due to a change in accounting principle. By
enhancing the consistency of financial information between periods, the
requirements of FASB 154 improves financial reporting. FASB 154 replaces APB
Opinion No. 20 and FASB 3. FASB 154 carries forward many provisions of Opinion
20 and FASB 3 without change including those provisions related to reporting a
change in accounting estimate, a change in reporting entity, correction of an
error and reporting accounting changes in interim financial statements. FASB 154
is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments" ("SFAS 155"). SFAS 155 allows any hybrid financial
instrument that contains an embedded derivatives that otherwise would require
bifurcation under SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" to be carried at fair value in its entirety, with changes in
fair value recognized in earnings. In addition, SFAS 155 requires that
beneficial interests in securitized financial assets be analyzed to determine
whether they are freestanding derivatives or contain an embedded derivative.
SFAS 155 also eliminates a prior restriction on the types of passive derivatives
that a qualifying special purpose entity is permitted to hold. SFAS 155 is
applicable to new or modified financial instruments in fiscal years beginning
after September 15, 2006, though the provisions related to fair value accounting
for hybrid financial instruments can also be applied to existing instruments.
Early adoption, as of the beginning of an entity's fiscal year, is also
permitted, provided interim financial statements have not yet been issued. We
are currently evaluating the potential impact, if any, that the adoption of SFAS
155 will have on our results of operations or financial position.

In March 2006, the FASB issued SFAS 156, "Accounting for Servicing of Financial
Assets-an amendment of FASB Statement No. 140". This statement amends FASB
Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities", with respect to the accounting for
separately recognized servicing assets and servicing liabilities. This
statement: (1) requires an entity to recognize a servicing asset or servicing
liability each time it undertakes an obligation to service a financial asset by
entering into a servicing contract in any of the following situations: (a) a
transfer of the servicer's financial assets that meets the requirements for sale
accounting, (b) a transfer of the servicer's financial assets to a qualifying
special-purpose entity in a guaranteed mortgage securitization in which the
transferor retains all of the resulting securities and classifies them as either
available-for-sale securities or trading securities in accordance with FASB
Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", (c) an acquisition or assumption of an obligation to service a
financial asset that does not relate to financial assets of the servicer or its
consolidated affiliates; (2) requires all separately recognized servicing assets
and servicing liabilities to be initially measured at fair value, if
practicable; (3) permits an entity to choose either of the following subsequent
measurement methods for each class of separately recognized servicing assets and
servicing liabilities: (a) Amortization method-Amortize servicing assets or
servicing liabilities in proportion to and over the period of estimated net
servicing income or net servicing loss and assess servicing assets or servicing
liabilities for impairment or increased obligation based on fair value at each
reporting date, or (b) Fair value measurement method-Measure servicing assets or
servicing liabilities at fair value at each reporting date and report changes in
fair value in earnings in the period in which the changes occur; (3) at its
initial adoption, permits a one-time reclassification of available-for-sale
securities to trading securities by entities with recognized servicing rights,
without calling into question the treatment of other available-for-sale
securities under Statement 115, provided that the available-for-sale securities
are identified in some manner as offsetting the entity's exposure to changes in
fair value of servicing assets or servicing liabilities that a servicer elects
to subsequently measure at fair value; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the statement of financial position and additional disclosures for all
separately recognized servicing assets and servicing liabilities. An entity
should adopt this statement as of the beginning of its first fiscal year that
begins after September 15, 2006. Earlier adoption is permitted as of the
beginning of an entity's fiscal year, provided the entity has not yet issued
financial statements, including interim financial statements, for any period of
that fiscal year. The effective date of this Statement is the date an entity
adopts the requirements of this statement.
<PAGE>

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.

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.
<PAGE>

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
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 OF 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.
<PAGE>

At December 31, 2005, we performed our annual impairment test for goodwill by
first comparing the carrying value of the net assets to the fair value of the
Technical Publications and Engineering unit. The fair value was determined to be
less than the carrying value, and therefore a second step was performed to
compute the amount of the impairment. In this process, a fair value for goodwill
was estimated, based in part on the fair value of the operations, and was
compared to its carrying value. The shortfall of the fair value below carrying
value was $1,241,180 which represents the amount of goodwill impairment.

During the fourth quarter 2005, conditions were present that clearly indicated
an impairment of goodwill of TBM Technologies Inc., including adverse changes in
legal factors and business climate as well as the projection of continued cash
flow losses. As a result of these conditions, the full amount of the goodwill of
$218,511 was written off.

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.

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.

RISK FACTORS

Investors should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing the Company. Additional risks not presently known to us or that
we currently believe are immaterial may also impair our business operations. If
any of the following risks actually occurs, our business, financial condition or
operating results could be seriously impaired. This section should be read in
conjunction with the Financial Statements and Notes thereto, and Management's
Discussion and Analysis or Plan of Operation contained in this report.

If we are unable to compete effectively with existing or new competitors, the
loss of our competitive position could result in price reductions, fewer
customer orders, reduced revenues, reduced margins, reduced levels of
profitability, and loss of market share. If we are unable to manage our
inventory, we will not be able to satisfy customer demand. Our reliance on one
or a few suppliers for inventory components could delay shipments and increase
our costs. Our future operating results depend on our ability to purchase a
sufficient amount of components to meet the demands of our customers. Since we
may order components from suppliers in advance of receipt of customer orders for
our products that include these components, we could face a material inventory
risk. Our products may have quality issues that could adversely affect our sales
and reputation. We are dependent on significant customers, as noted in
Management's Discussion and Analysis.
<PAGE>

We depend on key employees and face competition in hiring and retaining
qualified employees. Recent and proposed regulations related to equity
compensation could adversely affect our ability to attract and retain key
personnel.

We expect our quarterly revenues, cash flows and operating results to fluctuate
due to the large size and timing of some orders that can materially affect our
financial statements from quarter to quarter, either obscuring or presenting
trends that do or do not exist. This makes prediction of revenues, earnings and
working capital for each financial period especially difficult and uncertain and
increases the risk of unanticipated variations in quarterly results and
financial condition.

Our stock price can be volatile. Our stock price can be affected by many factors
such as quarterly increases or decreases in our earnings, speculation in the
investment community about our financial condition or results of operations,
technological developments, or the loss of key management or technical
personnel.

RECENT EVENTS

On January 3, 2006, the Company executed a Letter of Intent to acquire an
engineering services firm located in New Jersey. The purchase price will
calculated at five times audited 2005 EBIT of the Seller and will be payable as
follows: thirty percent in cash; twenty per cent in a two year subordinated note
bearing annual interest at US prime, payable quarterly and guaranteed by the
Company; twenty-five per cent in the Company's common shares; and, twenty-five
per cent in the Company's preferred shares which will be convertible into common
shares. The acquisition is subject to due diligence and the audit of the
Seller's 2005 and 2004 financial statements which are currently being performed.
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report, the Company carried out an
evaluation of the effectiveness of the design and operation of its disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. This evaluation
was done under the supervision and with the participation of the Company's
Principal Executive Officer and Principal Financial Officer. Based upon that
evaluation, the Principal Executive Officer and Principal Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
gathering, analyzing and disclosing information needed to satisfy the Company's
disclosure obligations under the Exchange Act.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect those controls since the most recent
evaluation of such controls.

(b) Changes in Internal Controls.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect those controls since the most recent
evaluation of such controls.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may become involved in various lawsuits and legal
proceedings which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm the Company's business. Except
for the following, the Company is currently not aware of nor has any knowledge
of any such legal proceedings or claims that we believe will have, individually
or in the aggregate, a material adverse affect on our business, financial
condition or operating results:

On November 3, 2005, the Company terminated the service agreement of the vendors
of TBM Technologies Inc., acquired on January 17, 2005, for what it believes is
a material breach of the agreement by the vendors. The vendors are seeking
termination pay from the Company in the amount of approximately $40,000. The
Company intends to defend this claim vigorously and counterclaim for losses
suffered as well as jeopardy to its reputation by the actions of the vendors.

In November 2002, we sold certain assets of our training division to Thinkpath
Training LLC. Pursuant to this agreement, Thinkpath Training LLC assumed certain
liabilities including the property lease for this division which expires August
31, 2006. In April 2006, we were notified by Thinkpath Training LLC that they
had failed to meet their rent obligations and currently had rent arrears of
approximately $80,000. The lessor has filed a claim against us and Thinkpath
Training LLC demanding that the rent arrears be paid and the premises vacated
immediately. Although we intend to defend this claim vigorously, we may be held
liable for the rent arrears plus the balance of the lease which expires August
31, 2006 for an additional amount of $115,000.
<PAGE>

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

      None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5. OTHER INFORMATION

      None.
<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.

** 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.
<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: May 19, 2006     By: /s/ Declan French         By: /s/ Kelly Hankinson
                        ---------------------         -----------------------
                        Declan French                 Kelly L. Hankinson
                        Chief Executive Officer       Chief Financial Officer