UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
                                       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.)

                         55 UNIVERSITY AVENUE, SUITE 400
                        TORONTO, ONTARIO, CANADA M5J 2H7
               ---------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (416) 364-8800
                                 --------------
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

     CHECK WHETHER THE ISSUER: (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
 SECTION 13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH
     SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
                                    AND (2)
       HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
                                 YES |X| NO |_|

          AS OF AUGUST 19, 2002 THERE WERE 28,602,791 SHARES OF COMMON
                   STOCK, NO PAR VALUE PER SHARE, OUTSTANDING.



<PAGE>


                                 THINKPATH INC.
                  JUNE 30, 2002 QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION
                                                                     Page Number


Item 1.  Financial Statements

Interim Consolidated Balance Sheets as of June 30, 2002,
         December 31, 2001...................... ............................5,6
Interim Consolidated Statements of Income for the three and six months ended
         June 30, 2002 and 2001 ...............................................7
Interim Consolidated Statements of Stockholders' Equity for the three and six
         months ended June 30, 2002............................................8
Interim Consolidated Statements of Cash Flows for the six months ended
         June 30, 2002 and 200 1............. .................................9
Notes to Interim Consolidated Financial Statements............................10

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................18

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...........27

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings ...................................................27
Item 2.  Changes in Securities and Use of Proceeds ...........................28
Item 3.  Defaults Upon Senior Securities .....................................28
Item 4.  Submission of Matters to a Vote of Security Holders .................28
Item 5.  Other Information ...................................................29
Item 6.  Exhibits and Reports on Form 8-K ....................................29


<PAGE>


ITEM 1.  FINANCIAL STATEMENTS





                                 THINKPATH INC.

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                         AS OF JUNE 30, 2002 (UNAUDITED)

                        (AMOUNTS EXPRESSED IN US DOLLARS)


<PAGE>

<TABLE>
<CAPTION>

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



                                                      June 30,      December 31,
                                                         2002              2001
                                                         ----              ----
                                                          $                  $
                                     ASSETS
CURRENT ASSETS


<S>                                                      <C>             <C>
    Cash                                                 56,330          482,233
    Accounts receivable                               5,167,076        5,502,113
    Inventory                                            39,003           40,057
    Income taxes receivable                             162,100          431,817
    Prepaid expenses                                    877,514          345,341
                                                     ----------       ----------

                                                      6,302,024        6,801,561

CAPITAL ASSETS                                        2,522,697        2,859,340

GOODWILL                                              5,128,991        5,128,991


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

LONG-TERM RECEIVABLE                                     83,450           83,450

OTHER ASSETS                                            436,390        1,287,710

                                                     ----------       ----------
                                                     15,487,477       17,174,978
                                                     ==========       ==========



</TABLE>







                                      -5-
<PAGE>


<TABLE>
<CAPTION>



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



                                                      June 30,     December 31,
                                                         2002             2001
                                                         ----             ----
                                                           $               $
                                   LIABILITIES
CURRENT LIABILITIES


<S>                                                    <C>            <C>
    Bank indebtedness                                  4,478,367      5,039,171
    Accounts payable                                   3,667,110      4,073,444
    Deferred revenue                                     242,045        365,023
    Current portion of long-term debt                    607,010        528,285
    Current portion of notes payable                     230,000        150,000
                                                     -----------    -----------
                                                       9,224,532     10,155,923



DEFERRED INCOME TAXES                                    150,380        150,380

LONG-TERM DEBT                                           398,284        582,432

NOTES PAYABLE                                          2,185,000      2,340,000

LIABILITIES PAYABLE IN CAPITAL STOCK                     225,000        699,297
                                                     -----------    -----------
                                                      12,183,196     13,928,032
                                                     -----------    -----------


                              STOCKHOLDERS' EQUITY

CAPITAL STOCK                                         27,906,817     26,571,481

DEFICIT                                              (23,780,992)   (22,719,044)

ACCUMULATED OTHER COMPREHENSIVE LOSS                    (821,544)      (605,491)

                                                     -----------    -----------
                                                       3,304,281      3,246,946
                                                     -----------    -----------
                                                      15,487,477     17,174,978
                                                     ===========    ===========

</TABLE>

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


                                      -6-
<PAGE>











<PAGE>


<TABLE>
<CAPTION>



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


                                              THREE MONTHS    THREE MONTHS    SIX MONTHS     SIX MONTHS
                                                 ENDED           ENDED          ENDED          ENDED
                                             JUNE 30, 2002   JUNE 30, 2001  JUNE 30, 2002   JUNE 30, 2001
                                             -------------   -------------  -------------   -------------
                                                  $               $             $             $
<S>                                            <C>            <C>           <C>            <C>
REVENUE                                        7,377,052      9,740,937     14,782,729     20,239,138

COST OF SERVICES                               5,622,032      6,585,033     11,120,434     13,453,559
                                             -----------    -----------    -----------    -----------
GROSS PROFIT                                   1,755,020      3,155,904      3,662,295      6,785,579
                                             -----------    -----------    -----------    -----------
EXPENSES
  Administrative                                 875,058      2,254,873      2,026,133      2,925,818
  Selling                                        926,000      1,606,838      1,967,162      3,196,378
  Financing Expenses                                --          (51,111)          --          573,525
  Depreciation and amortization                  307,430        471,902        605,585        951,218
  Restructuring costs                               --           62,006           --          303,457
                                             -----------    -----------    -----------    -----------
                                               2,108,488      4,344,508      4,598,879      7,950,396
                                             -----------    -----------    -----------    -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INTEREST CHARGES                       (353,468)    (1,188,604)      (936,584)    (1,164,817)

  Interest Charges                               232,892        241,787        468,471        474,493
                                             -----------    -----------    -----------    -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                           (586,360)    (1,430,391)    (1,405,055)    (1,639,310)

  Income taxes                                       110        200,030        (25,300)       403,992
                                             -----------    -----------    -----------    -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS        (586,470)    (1,630,421)    (1,379,755)    (2,043,302)

INCOME (LOSS) FROM DISCONTINUED OPERATIONS
 (INCLUDING GAIN ON DISPOSAL OF $497,579)         79,165         11,387        372,980        (66,028)
                                             -----------    -----------    -----------    -----------
NET INCOME (LOSS)                               (507,305)    (1,619,034)    (1,006,775)    (2,109,330)

PREFERRED STOCK DIVIDEND REQUIREMENTS             31,493        438,231         55,173        664,731

EARNINGS APPLICABLE TO COMMON STOCK             (538,798)    (2,057,265)    (1,061,948)    (2,774,061)
                                             ===========    ===========    ===========    ===========
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
  OUTSTANDING BASIC AND FULLY DILUTED         24,511,005     14,713,383     21,182,368     13,869,253
                                             ===========    ===========    ===========    ===========
INCOME (LOSS) PER WEIGHTED AVERAGE
  COMMON STOCK BEFORE PREFERRED DIVIDENDS
                                                   (0.02)         (0.11)         (0.05)         (0.15)

  BASIC AND FULLY DILUTED
                                             ===========    ===========    ===========    ===========
INCOME (LOSS) PER WEIGHTED AVERAGE
  COMMON STOCK AFTER PREFERRED DIVIDENDS
  BASIC AND FULLY DILUTED                          (0.02)         (0.14)         (0.05)         (0.20)
                                             ===========    ===========    ===========    ===========


</TABLE>


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




                                      -7-
<PAGE>
<TABLE>
<CAPTION>


THINKPATH INC.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND THE YEAR ENDED DECMEBER 31, 2001
(AMOUNTS EXPRESSED IN US DOLLARS)
                                                                                                                       ACCUMULATED
                                  COMMON STOCK       PREFERRED STOCK           CAPITAL                                     OTHER
                                    NUMBER OF        NUMBER OF SHARES          STOCK        RETAINED   COMPREHENSIVE COMPREHENSIVE
                                     SHARES         A         B        C       AMOUNTS      EARNINGS   INCOME (LOSS) INCOME (LOSS)
                                  ----------- --------- -------- -------- ------------ -------------                ------------

<S>                                  <C>             <C>        <C>    <C>       <C>          <C>            <C>          <C>
Balance as of December 31, 2000      11,915,138      1,050      750      --     23,759,415   (12,306,862)                 (653,547)


Net loss for the year                     --           --        --      --         --        (9,683,442)   (9,683,442)
                                                                                                            -----------
Other comprehensive income (loss),
   net of tax:
   Foreign currency translation           --           --        --       --         --            --          209,506
   Adjustment to market value             --           --        --       --         --            --         (161,450)
                                                                                                           -----------
 Other comprehensive income                                                                                     48,056      48,056
                                                                                                           -----------
Comprehensive loss                                                                                          (9,635,386)
                                                                                                           ===========
Issuance of common stock for cash       525,000        --        --       --       400,000         --

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

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

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

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

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

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

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

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

Allowance for deferred taxes
recoverable on issue expenses             --          --         --       --      (790,000)        --
                                     ----------   --------  -------   -------    ---------   -----------
Balance as of December 31, 2001      17,731,711       --         --       945   26,571,481  (22,719,044)                  (605,491)
                                     ==========   ========  =======   =======   ==========   ===========                 =========
Net loss for the period                   --          --         --       --           --      (499,470)      (499,470)
                                                                                                           -----------
Other comprehensive income (loss),
  net of tax:
   Foreign currency translation           --         --          --       --           --         --          (277,058)
   Adjustment to market value             --         --          --       --           --         --            --
                                                                                                           -----------
 Other comprehensive income                                                                                   (277,058)   (277,058)
                                                                                                           -----------
Comprehensive loss                                                                                            (776,528)
                                                                                                           ===========
 Reduction in common stock payable    1,756,655      --          --       --       474,297        --

Dividend on preferred stock               --         --          --       --        21,617      (21,617)

Conversion of preferred stock to
common stock                            541,593      --          --       (65)        --          --

Beneficial conversion on
Issuance of preferred stock               --         --          --       --         2,063       (2,063)

Debt settled through the issuance
of common stock                       1,253,752      --          --       --       226,956        --
                                     ----------   --------  -------   -------   ----------   -----------                ----------
Balance as of March 31, 2002         21,283,711      --          --       880   27,296,414  (23,242,194)                  (882,549)
                                     ==========   ========  =======   =======   ==========   ==========                 ==========
Net loss for the period                  --          --          --       --          --       (507,305)      (507,305)
                                                                                                            ----------
Other comprehensive income (loss),
  net of tax:
   Foreign currency translation          --         --           --       --          --          --            61,005
   Adjustment to market value            --         --           --       --          --          --              --
                                                                                                            ----------
Other comprehensive income                                                                                      61,005      61,005
                                                                                                            ----------
Comprehensive loss                                                                                            (446,300)
                                                                                                           ===========
Common stock and warrants issued
in consideration of services          3,681,818     --           --       --       578,910       --

Dividend on preferred stock              --         --           --       --         7,842       (7,842)

Conversion of preferred stock to
common stock                          3,253,534     --           --      (280)        --         --

Beneficial conversion on
Issuance of preferred stock              --         --           --       --        23,651      (23,651)
Debt settled through the issuance
of common stock                                     --           --                               --
                                     ----------   --------  -------   -------   ----------   -----------                ----------
Balance as of June 30, 2002          28,219,063     --           --       600   27,906,817   (23,780,992)                (821,544)
                                     ==========   ========  =======   =======   ==========   ==========                 ==========

</TABLE>


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




                                      -8-
<PAGE>




<TABLE>
<CAPTION>



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




                                                                   2002           2001
                                                                   ----          ----
                                                                     $             $
Cash flows from operating activities
<S>                                                              <C>          <C>
Net income (loss)                                                1,006,775)   (2,109,330)
     Adjustments to reconcile net loss to net cash (used in)     ---------    ----------
     provided by operating activities:

          Amortization                                             692,134     1,123,705
          Decrease (increase) in accounts receivable               483,589       840,226
          Decrease (increase) in prepaid expenses                 (599,840)      (50,568)
          Increase (decrease) in accounts payable                 (512,012)      167,969
          Decrease (increase) in deferred income taxes                --         397,362
          Decrease (increase) in inventory                           1,122        30,472
          Increase (decrease) in deferred revenue                 (124,036)      (44,685)
          Increase in income taxes payable (receivable)            269,699          --
          Common stock and warrants issued for services            578,909       354,682
          Long-term investment received for services                  --        (205,242)
          Gain on disposal of subsidiary                          (497,579)         --
                                                                 ---------    ----------
     Total adjustments                                             291,986     2,613,921
                                                                 ---------    ----------
     Net cash used in operating activities                        (714,789)      504,591
                                                                 ---------    ----------

Cash flows from investing activities
     Purchase of capital assets                                   (246,570)     (214,691)
     Disposal (purchase) of other assets                            16,156      (294,202)
     Increase in long-term receivable                                 --        (188,626)
     Proceeds on disposal of subsidiary                          1,320,786          --
                                                                 ---------    ----------
     Net cash used in investing activities                       1,090,372      (697,519)
                                                                 ---------    ----------


Cash flows from financing activities
     Repayment of notes payable                                    (75,000)     (192,164)
     Repayment of long-term debt                                  (390,768)     (475,845)
     Cash received (paid) on long-term debt                        259,350       225,000
     Proceeds from issuance of common stock                           --         400,000
     Proceeds from issuance of preferred stock                        --       1,100,000
     Increase (decrease) in bank indebtedness                     (617,516)     (812,515)
                                                                 ---------    ----------
     Net cash provided by financing activities                    (823,934)      244,476
                                                                 ---------    ----------
Effect of foreign currency exchange rate changes                    22,448       (51,548)
                                                                 ---------    ----------

Net increase (decrease) in cash and cash equivalents              (425,903)        --
Cash and cash equivalents
     -Beginning of period                                          482,233         --
                                                                 ---------    ----------
     -End of period                                                 56,330         --
                                                                 =========    ==========

SUPPLEMENTAL CASH ITEMS:
     Interest paid                                                 476,838       300,434
                                                                 =========    ==========
     Income taxes paid (recovered)                                 (25,300)        3,992
                                                                 =========    ==========

SUPPLEMENTAL NON-CASH ITEM:
     Preferred stock dividend                                       55,173       664,731
     Common shares issued for liabilities                          701,253          --
                                                                 =========    ==========



</TABLE>







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



                                      -9-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


1.  MANAGEMENT'S INTENTIONS

    Certain principal conditions and events are prevalent which indicate that
    there could be substantial doubt about the company's ability to continue as
    a going concern for a reasonable period of time. These conditions and events
    include significant operating losses, working capital deficiencies, and
    violation of certain loan covenants. At June 30, 2002, the Company had a
    working capital deficiency of $2,920,000, a deficit of $23,780,992 and has
    suffered recurring losses from operations.

    With insufficient working capital from operations, the Company's primary
    sources of cash have been a revolving line of credit with Bank One and
    proceeds from the sale of equity securities. At June 30, 2002, the revolving
    line of credit was $4,400,000 including an overdraft of approximately
    $300,000. Eligible receivables allowed for a maximum borrowing of
    $4,100,000. The revolving line of credit agreement requires the Company to
    meet various restrictive covenants, including a senior debt to EBITDA ratio,
    debt service coverage ratio, debt to tangible net worth ratio and certain
    other covenants. At June 30, 2002 and thereafter, the company did not comply
    with the covenants contained in the revolving line of credit agreement.

    On July 1, 2002 and as amended on August 1, 2002 and August 15, 2002, the
    company entered into a Forbearance and Modification Agreement with its
    senior lender, Bank One whereby the Bank agreed to forebear from exercising
    its rights and remedies against the company as a result of its violation of
    certain loan covenants, until the period ending August 31, 2002. In the
    event that the company defaults under the agreement including the failure to
    make payment when due, the Bank is entitled to exercise any and all of its
    security rights including foreclosing on collateral.

    On August 13, 2002, the company received a commitment from Morrison
    Financial Services Limited for a syndicated financing arrangement that will
    provide the funding necessary to purchase Bank One's debt and security. The
    partners in the syndicate are Maple Partners America Inc., Morrison
    Financial Services Limited and MFI Export Finance Inc. Bank One has agreed
    to extend the expiration of the Forbearance and Modification Agreement until
    August 31, 2002 to allow the syndicate to complete the financing
    arrangement.


    As at August 19, 2002, management's plans to mitigate and alleviate these
    adverse conditions and events include:

      A.  Commitment from a new lender to purchase Bank One's debt and security.
      B.  Ongoing restructuring of debt obligations and settlement of
          outstanding claims.
      C.  Ongoing restructuring of operations relating to the closure of
          non-profitable offices, termination of redundant staff and the
          institution of other cost cutting measures. See Note 14. 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 partial payments to vendors and interest payments on all
          debt.
      D.  Ongoing efforts to procure cash through a private placement of debt,
          equity or warrant securities.
      E.  Settlement of an outstanding insurance claim related to the loss of
          assets and business for two offices impacted by the terrorist events
          of September 11, 2001.
      F.  Focus on growth in the technical publications, e-learning and
          engineering services divisions.
      G.  Sale of non-profitable and non-complimentary business units.

    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 revolving line of credit, 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, the bank's continued
    forbearance, the closing of new financing, and settlement of its insurance
    claim, all of which are subject to substantial uncertainties. Cash flows
    from operations for the next twelve months will be dependent, among other
    things, 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 to successfully procure forbearance from
    the bank and close alternate financing, could have a material adverse effect
    on the company's liquidity position and capital resources.



                                      -10-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    a) Going Concern

       These interim 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 interim 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
       interim 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 interim consolidated financial statements do not
       include any adjustments that might result from the outcome of this
       uncertainty.

    b) Change of Name

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


    c) Principal Business Activities

       Thinkpath Inc. is an information technology and engineering services
       company which, along with its 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.), Thinkpath Training US Inc.(formerly ObjectArts US Inc.),
       MicroTech Professionals Inc., and TidalBeach Development Inc., provides
       engineering, staffing, training and technology services to enhance the
       resource performance of clients.

    d) Basis of interim consolidated financial statement presentation

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


    e) Cash and Cash Equivalents

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

    f) Other Financial Instruments

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

    g) Long-Term Financial Instruments

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



                                      -11-
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


    h) Capital Assets

       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 assets and to record the occurrences of corresponding
       obligations as long-term liabilities. Obligations under capital leases
       are reduced by rental payments net of imputed interest.


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

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

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

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

    k) Revenue
       1) The company provides the services of engineering and information
          technology staff on a project basis. The services provided are defined
          by guidelines to be accomplished by milestone and revenue is
          recognized upon the accomplishment of the relevant milestone. As
          services are rendered, the costs incurred are reflected as Work in
          Progress. Revenue is recognized upon the persuasive evidence of an
          agreement, delivery has occurred, the fee is fixed or determinable and
          collection reasonably assured.
       2) The company provides the services of information technology
          consultants on a contract basis and revenue is recognized as services
          are performed.
       3) The company places engineering and information technology
          professionals on a permanent basis and revenue is recognized upon
          candidates' acceptance of employment. If the company receives
          non-refundable upfront fees for "retained searches", the revenue is
          recognized upon candidates' acceptance of employment.
       4) The company provides advanced training and certification in a variety
          of technologies and revenue is recognized on delivery.
       5) The company licenses software in the form of a Human Capital
          Management System called Njoyn. The revenue associated with providing
          this software consists of an initial set up fee, customization and
          training as agreed and an ongoing monthly per user fee. The allocation
          of revenue to the various elements is based on the company's
          determination of the fair value of the elements if they had been sold
          separately. The set-up fee and customization revenue is recognized
          upon delivery of access to the software with customization completed
          in accordance with milestones determined by the contract. Revenue is
          recognized on a percentage of completion basis for contracts with
          significant amounts of customization and clearly defined milestones
          agreed to by the customer and an enforceable right to invoice and
          collect on a partial completion basis. For contracts which require
          significant customization, without clearly defined milestones, and an
          inability to estimate costs, revenue is reflected on a completed
          contract basis. On March 1, 2002 the Company sold its subsidiary,
          Njoyn Software Incorporated to Cognicase Inc, a Canadian company. The
          net proceeds after broker fees were $1,350,000 of which $800,000 was
          received in cash and $550,000 was received in unrestricted common
          shares. The shares were sold on March 11, 2002 for value of
          $524,673.19. As part of the transaction, Cognicase assumed the entire
          staff in the technology division. As a result, the company has had no
          further Njoyn revenue.
       6) The company also signs contracts for the customization or development
          of SecondWave, a web development software in accordance with
          specifications of its clients. The project plan defines milestones to
          be accomplished and the costs associated. These amounts are billed as
          they are accomplished and revenue is recognized as the milestones are
          reached. The work in progress for costs incurred beyond the last
          accomplished milestone is reflected at the period end. To date these
          amounts have not been material and have not been set up at the period
          ends. The contracts do not include any post-contract customer support.
          Additional customer support services are provided at standard daily
          rates, as services are required. After the sale of Njoyn and the
          assumption of the technology division, the company has had no further
          SecondWave revenue.



                                      -12-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


       In December 1999, the Securities and Exchange Commission ("SEC") issued
       Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
       Financial Statements." SAB 101 summarizes the SEC's view in applying
       generally accepted accounting principles to selected revenue recognition
       issues. The effects, if any, of applying this guidance must be adopted by
       SEC registrants no later than December 31, 2000 and must be reported as a
       cumulative effect adjustment as of January 1, 2000, resulting from a
       change in accounting principle. Restatement of previously reported
       results of the earlier quarters of fiscal 2000, if necessary, is also
       required. The adoption of SAB 101 did not have a material effect on the
       Company's consolidated financial statements.

   l)  Goodwill

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

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

       The Company is currently assessing the financial impact SFAS No. 141 and
       No. 142 will have on its Consolidated Financial Statements. Any
       transitional impairment loss will be recognized as the cumulative effect
       of a change in accounting principle in the Company's statement of
       earnings.


    m) Income Taxes

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

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

    n) Foreign Currency

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

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




                                      -13-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)

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

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

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

    s) Computer software costs

       The company accounts for the cost of developing computer software for
       internal use, which may be sold as a separate product, as a research and
       development expense until the technological feasibility of the product
       has been established. At the end of each year the company compares the
       unamortized capital costs represented by Deferred development costs in
       Other Assets to the net realizable value of the product to determine if a
       reduction in carrying value is warranted. Included in the software
       developed for own use which may be sold as a separate product is the
       Njoyn and Secondwave software and therefore for these products, the costs
       incurred after technological feasibility was reached has been treated as
       Deferred Development costs and the amount evaluated on an annual basis to
       determine if a reduction in carrying value is warranted.

       The company has developed computer software for internal use which is
       reflected in deferred development costs for which the company has
       commenced marketing in 2001.

    t) Investments in Non-Related Companies

       The company records its investment in companies in which it holds less
       than 20% interest at fair market value. Changes in fair market value are
       adjusted in comprehensive income.

    u) Recent Pronouncements

       In June 1998 the Financial Accounting Standards Board (FASB) issued
       Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
       for Derivative Instruments and Hedging Activities" which was amended by
       SFAS No. 138 and became effective on January 1, 2001. This statement
       requires that an entity recognizes all derivatives as either assets or
       liabilities and measure those instruments at fair value. If certain
       conditions are met, a derivative may be specifically designated as a
       hedge. The accounting for changes in the fair value of a derivative
       depends on the intended use of the derivative and the resulting
       designation. The adoption of this standard will not have a material
       impact on the consolidated financial statements of the company.

       In September 2000, the FASB issued SFAS No. 140, "Accounting for
       Transfers and Servicing of Financial Asset and Extinguishments of
       Liabilities. SFAS No. 140 provides accounting and reporting standards for
       transfers and servicing of financial assets and extinguishments of
       liabilities. It is effective for transfers and servicing of financial
       assets and extinguishments of liabilities occurring after March 31, 2001
       and is effective for recognition and reclassification of collateral and
       for disclosures relating to securitization transactions and collateral
       for fiscal years ending after December 15, 2000. The Company does not
       believe that this statement will materially impact its results of
       operations.



                                      -14-
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


       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 the Company's application of those policies, and the
       likelihood that materially different amounts would be reported under
       different conditions and using different assumptions.

v)     Advertising Costs
       Advertising costs are expensed as incurred. For the three months ended
       June 30, 2002, advertising expense was $80,232 compared to $224,545 for
       the three months ended June 30, 2001.

       For the three months ended March 31, 2002, advertising expense was
       $68,772 compared to $123,240 for the three months ended March 31, 2001.


3.  ACQUISITIONS

    Systemsearch Consulting Services Inc. was acquired on January 2, 1997 for
    $391,313. This amount was paid by the issuance of common stock and a cash
    payment of $97,828. The purchase has been reflected as follows:

           Consideration                              $ 391,313
           Assumption of net liabilities                 57,321
                                                      ---------

           Goodwill                                   $ 448,634
                                                      =========

    On December 31, 2001, the Company had written off a portion of the goodwill
    related to its investment in Systemsearch Consulting Services Inc.

    International Career Specialists Ltd. was acquired on January 1, 1998 for
    $652,188. This amount was paid by the issuance of common stock and a cash
    payment of $326,094. The purchase was reflected as follows:

           Consideration                              $ 652,188
           Assumption of net liabilities                198,409
                                                      ---------

           Goodwill                                   $ 850,597
                                                      =========

    On December 31, 2000, the Company had written off the goodwill related to
    its investment in International Career Specialists Ltd.

    The assets of Southport Consulting Company, a New Jersey corporation, were
    acquired by Thinkpath Inc. in a transaction effective October 31, 1998. The
    consideration for the acquisition was as follows:

           Cash                                       $  50,000
           Shares                                       200,000
                                                      ---------

                                                      $ 250,000
                                                      =========

           The assets acquired are valued as follows:

           Software                                   $ 130,000
           Office furniture and equipment                20,000
           Other assets                                 100,000
                                                      ---------

                                                      $ 250,000
                                                      =========




                                      -15-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


    Cad Cam Inc. and its subsidiaries Cad Cam of Michigan Inc., Cad Cam
    Technical Services Inc., and Cad Cam Integrated Systems Inc. was acquired
    during 1999 for $6,000,000. This amount was paid as follows: $2,000,000 paid
    in cash and $500,000 in common stock on the date of closing. The balance
    consists of three notes payable totaling $2,500,000 and $1,000,000 in the
    form of common stock to be issued with the final note payable. The documents
    were executed at the end of September 1999 and the operations consolidated
    with the company from October 1, 1999. The terms of the note payable were
    subsequently restructured.(Note 12)

           The assets acquired are valued as follows:

           Current assets                             $ 2,468,029
           Fixed assets                                 2,267,539
           Other assets                                   817,004
           Liabilities assumed                         (5,071,430)
           Consideration                               (6,000,000)
                                                      -----------

           Goodwill                                   $ 5,518,858
                                                      ===========


    MicroTech Professionals Inc., was acquired effective April 1, 2000 for
    $4,500,000.The amount was to be paid in two installments, based on certain
    revenue requirements to be met by MicroTech Professionals Inc. The
    requirements have been met. First Installment: 133,333 common stock issued
    on closing, $1,250,000 cash paid on closing, $750,000 by a three year
    promissory note bearing interest at 1/2% above prime paid semi-annually
    issued on closing. Second Installment: $625,000 in common stock, $875,000
    cash, $500,000 by a three-year promissory note bearing interest at 1/2%
    above prime paid semi-annually. The acquisition was accounted for by the
    purchase method and the operations have been included in the consolidated
    operations from April 1, 2000. Refer to note 21(a) for supplemental
    information. The terms of payment were subsequently restructured. (Note 12)

     The net acquired assets are valued as follows:

           Current assets                             $ 1,769,478
           Other assets                                   850,000
           Fixed assets                                   104,851
           Liabilities assumed                         (1,073,527)

           Consideration including
           acquisition costs                           (4,660,000)
                                                       -----------

           Goodwill                                   $ 3,009,198
                                                       ===========


    On December 31, 2001, the Company had written off the goodwill related to
    its investment in MicroTech Professionals Inc.

    On March 6, 2000, Thinkpath Inc. completed the acquisition of 80% of E-Wink,
    Inc., a Delaware corporation, in consideration of: i) 300,000 shares of our
    common stock valued at $975,000; and ii) warrants to purchase an aggregate
    of 500,000 shares of our common stock at a price of $3.25 per share for a
    period of five years valued at $1,458,700. E-Wink was formed to match
    providers of venture capital, bridge loans and private placement capital
    with members of the brokerage community. The full purchase price of
    $2,433,700 has been allocated to goodwill. On December 31, 2000,the company
    has written off the goodwill related to its investment in E-Wink, Inc.





                                      -16-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


4. POOLING OF INTEREST

    Effective January 1, 2000. Thinkpath Inc. entered into a merger and
    acquisition agreement with a technical training provider, ObjectArts Inc.
    and its subsidiary ObjectArts (US) Inc. ObjectArts (US) Inc., was merged
    with IT Staffing New York Ltd., an inactive subsidiary of Thinkpath Inc. In
    exchange for all of the outstanding shares of ObjectArts Inc., the company
    issued 527,260 common stock. The merger was accounted for as a pooling of
    interests and the results of ObjectArts Inc. and ObjectArts (US) Inc. have
    been included for all periods presented.

    On November 15, 2000, Thinkpath Inc. combined with TidalBeach Inc., a
    software developer, and in exchange for all of the outstanding shares of
    TidalBeach Inc., issued 250,000 common stock. The combination has been
    accounted for as a pooling of interests and the results of TidalBeach Inc.
    have been included for all periods presented. Refer to note 20(b) for
    supplemental information concerning TidalBeach Inc.



5. ACCOUNTS RECEIVABLE
                                                    June 30,       December 31,
                                                       2002               2001
                                                          $                  $

    Accounts receivable                           5,483,229          6,079,676
    Less: Allowance for doubtful accounts          (316,153)          (577,563)
                                                  ---------          ---------
                                                  5,167,076          5,502,113
                                                  =========          =========


6. CAPITAL ASSETS
                                             June 30,               December 31,
                                              2002                         2001
                               -----------------------------------   -----------
                                   Accumulated
                                  COST     AMORTIZATION       NET         NET
                                   $           $               $           $

   Furniture and equipment        771,107      460,128      310,979      344,693
   Computer equipment
     and software               6,358,499    4,296,640    2,061,859    2,322,887
   Leasehold improvements         475,963      326,104      149,859      191,760
                                ---------    ---------    ---------    ---------
                                7,605,569    5,082,872    2,522,697    2,859,340
                                =========    =========    =========    =========
   Assets under capital lease     853,590      378,911      474,679      474,485
                                =========    =========    =========    =========

  Amortization for the three months ended June 30, 2002 was $204,720 including
  amortization of assets under capital lease of $32,929.

  Amortization for the three months ended March 31, 2002 amounted to $222,358
  including amortization of assets under capital lease of $33,927.

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


7. INVESTMENT IN NON-RELATED COMPANIES

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

                                                     June 30,       December 31,
                                                        2002               2001

                Conexys                             $667,511           $667,511
                Digital Cement                       346,415            346,415
                                                  ----------         ----------
                Total                             $1,013,926         $1,013,926
                                                  ==========         ==========


                                      -17-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


      i) Conexys
      During the year ended December 31, 1999, $383,146 of the Conexys
      investment was included as a short-term investment as the company had
      intended to sell these shares on the open market. During fiscal 2000, the
      company acquired additional shares of Conexys at a cost of approximately
      $284,365 in consideration of services rendered and reclassified the total
      investment as available for sale. Since the shares of Conexys trade on the
      Bermuda Stock Exchange, the fair value was determined based on the stock
      price.

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

      iii) Lifelogix
      During 2000, the company acquired a twenty percent interest in LifeLogix
      in consideration of the source code for Secondwave, the software which
      supports LifeLogix's human stress and emotions management systems. The
      value of these shares is approximately $142,715. This investment has been
      accounted for on the cost basis as the company does not have significant
      influence over LifeLogix. This investment was written off in 2001.

      The acquisition of additional shares in 2000 of Conexys and the
      acquisition of shares of Digital Cement and the investment in LifeLogix
      were reflected at the estimated fair market value of the shares received
      which represents the more determinable value in the exchange. Revenue
      includes $932,927 arising from these transactions was reported in 2000.


      8. GOODWILL

         Goodwill is the excess of cost over the value of assets acquired over
         liabilities assumed in the purchase of the following companies:


<TABLE>
<CAPTION>

                                                              June 30,                  December 31,
                                                                  2002                          2001
                                                --------------------------------------    ----------
                                                              Accumulated
                                                   COST      AMORTIZATION      NET            NET
                                                     $            $             $              $

<S>                                                <C>          <C>            <C>           <C>
           Systemsearch Consulting Services        448,634      303,337        145,297       145,297
           International Career Specialists        850,597      850,597           --              --
           Cad Cam Inc.                          5,518,858      535,164      4,983,694     4,983,694
           MicroTech Professionals Inc.          3,009,198    3,009,198           --              --
           E-Wink Inc.                           2,433,700    2,433,700           --              --
                                                ----------   ----------     ----------    ----------

                                                12,260,987    7,131,996      5,128,991     5,128,991
                                                ==========   ==========     ==========    ==========
</TABLE>


          Effective January 1, 2002, the Company adopted Statements of Financial
          Accounting Standards No. 141, Business Combinations, No. 142, Goodwill
          and Other Intangible Assets and No. 144, Accounting for the Impairment
          or Disposal of Long-Lived Assets. These statements require the Company
          to evaluate the carrying value of our 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 writedowns that could
          adversely affect the Company's earnings. As of June 30, 2002, the
          company had not determined the effect of impairment tests on its
          earnings and financial position. In accordance with the requirements
          of SFAS No. 142, the company has not amortized goodwill in the current
          period. For the three and six months ended June 30, 2001, the company
          recorded amortization of goodwill of $132,000 and $280,000
          respectively. The adjusted net loss for the three and six months ended
          June 30, 2001 without amortization of goodwill would have been
          $1,487,034 and $1,829,330 respectively. The adjusted loss per share
          before preferred dividends for the three and six months ended June 30,
          2001 without amortization of goodwill would have been $0.10 and $0.13
          respectively. The adjusted loss per share after preferred dividends
          for the three and six months ended June 30, 2001 without amortization
          of goodwill would have been $0.13 and $0.18.

          Amortization for the year ended December 31, 2001 was $454,908.
          Effective July 1, 2001, the Company changed its amortization period
          from 30 to 15 years on a prospective basis.


                                      -18-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


       In accordance with the requirements of SFAS 121, the impairment of
       goodwill resulted in the writedown of the following amounts;
                                                     2001           2000
                                                    --------      ---------
           Systemsearch Consulting Services           238,673           --
           MicroTech Professionals Inc.             2,762,718           --
           International Career Specialists              --          679,568
           E-Wink Inc.                                   --        2,433,700
                                                    ---------     ----------
                                                    3,001,391      3,113,268
                                                    =========     ==========

           The Systemsearch Consulting Services office was closed on April 8,
           2002 and its staff terminated. The balance of its contracts have been
           transferred to head office. MicroTech Professionals Inc. has had
           ongoing operating losses since February 2001 and has had the majority
           of its staff terminated subsequent to December 31, 2001.

           In 2000, the International Career Specialists office was closed and
           the balance of its contracts transferred to head office. Also in
           2000, the start-up operations of E-wink were abandoned.


9. OTHER ASSETS
                                                     June 30,      December 31,
                                                        2002              2001
                                                         $                $

    Deferred development cost                          58,620          993,765
    Deferred financing costs                          181,146               --
    Deferred contract(net of accumulated
         amortization of $690,000)                    150,000          250,000
    Cash surrender value of life insurance             46,624           43,945
                                                    ---------        ---------
                                                      436,390        1,287,710
                                                    =========       ==========

    Amortization for the three months ended June 30, 2002 amounted to $112,789.
    Amortization for the three months ended March 31, 2002 amounted to $152,267.
    Amortization for the year ended December 31, 2001 amounted to $510,038.


10.BANK INDEBTEDNESS

    i)  June 30, 2002
    At June 30, 2002, the balance of the revolving line of credit was $4,400,000
    including an overdraft of approximately $300,000. The revolving line of
    credit provided for a maximum borrowing amount of $4,100,000 at variable
    interest rates based on eligible accounts receivable. The revolving line of
    credit agreement requires the Company to meet various restrictive covenants,
    including a senior debt to EBITDA ratio, debt service coverage ratio, debt
    to tangible net worth ratio and certain other covenants. At June 30, 2002
    and thereafter, the Company was not in compliance with the covenants
    contained in the revolving line of credit agreement.

    On July 1, 2002 and as amended on August 1, 2002, and August 15, 2002 the
    company entered into a Forbearance and Modification Agreement with its
    senior lender, Bank One whereby the Bank agreed to forebear from exercising
    its rights and remedies against the company as a result of its violation of
    certain loan covenants, until the period ending August 31, 2002. Under the
    terms of the agreement, the Bank is entitled to a forbearance fee of $50,000
    and payment of related legal fees and expenses. The interest rate on the
    revolving line facility was increased to prime plus 3%. The company has
    continued to borrow from the revolving line facility subject to eligible
    accounts receivables as monitored weekly by the Bank. In the event that the
    company defaults under the agreement including the failure to make payment
    when due, the Bank is entitled to exercise any and all of its security
    rights including foreclosing on collateral.

    Bank One has agreed to extend the expiration of the Forbearance and
    Modification Agreement until August 31, 2002 to allow the company's new
    lender to complete the financing arrangement required to purchase Bank
    One's debt and security.

ii)  December 31, 2001
    At December 31, 2001, the Company had $4,870,000 outstanding with Bank One.
    The revolving line of credit provided for a maximum borrowing amount of
    $4,760,000 at variable interest rates based on eligible accounts receivable.
    At December 31, 2001, the Company had an




                                      -19-
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


    overdraft of $110,000. The Company does not have an authorized overdraft
    facility with Bank One, however the bank has allowed an overdraft of up to
    $500,000 on a regular basis for approximately ten weeks. At December 31,
    2001 and thereafter, the Company was not in compliance with the covenants
    contained in the revolving line of credit agreement.

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


11.LONG-TERM DEBT

i)  June 30, 2002
    At June 30, 2002, the Company had $402,670 in subordinated debt outstanding
    to the Business Development Bank of Canada. The loan agreements require the
    Company to meet a certain working capital ratio. At June 30, 2002 and
    thereafter, the Company was not in compliance with the covenant contained in
    the loan agreements. In March 2002, the Business Development Bank
    consolidated the Company's loans and established a new repayment schedule
    with extended maturity dates after a nine month payment deferment. However,
    the company's ability to make subordinated debt and interest payments
    continues to be restricted by its senior lender, Bank One.

    In May 2002, the company secured a loan of $259,375 from an individual,
    Terry Lyons which was secured by the company's IRS refund. The company paid
    a placement fee of 10% to Mr. Lyons and the loan bears interest at 30% per
    cent per annum. Although the company received its IRS refund in July 2002,
    Mr. Lyons agreed to an extension of the loan until August 31, 2002.

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

                                                           June 30,       December 31,
                                                             2002               2001
                                                              $                  $
     a) Included therein:

<S>                                                     <C>                <C>
     Several loans with Business Development Bank of
     Canada ("BDC") secured by a general security
     agreement at various interest rates and royalties.    402,670           419,079

     A loan with T. Lyons payable by August 31, 2002       259,375                --
     bearing interest at 30% per annum.

     A loan with Bank One that was payable in 19
     remaining monthly payments of $13,889 with
     interest at 6% at December 31, 2001.
     In March 2002, this loan was paid in full.                 --           263,889

     Various capital leases with various payment terms
     and interest rates                                    343,249           427,749
                                                        ----------        ----------
                                                         1,005,294         1,110,717
     Less: current portion                                 607,010           528,285
                                                        ----------        ----------
                                                        $  398,284        $  582,432
                                                        ==========        ==========
</TABLE>


     b) Future principal payments obligations as at June 30, 2002, were as
        follows:

                2002                      $  485,209
                2003                         325,838
                2004                         139,841
                2005                          50,588
                2006                           3,818
                                          ----------
                                           1,005,294
                                          ==========






                                      -20-
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)



      c) Interest expense with respect to the long-term debt for the three
         months ended June 30, 2002 amounted to $67,673. Interest expense
         related to long-term debt was $21,638 for the three months ended March
         31, 2002 and $99,651 for the year ended December 31, 2001.

     d) Pursuant to the BDC loan agreement, BDC had the option to acquire 22,122
        common stock for an aggregate consideration of $1. The fair market value
        of these options at the time of issuance was $62,393 ($2.82 per option).
        The imputed discount on these options has been amortized over the term
        of the loan as interest and was fully amortized prior to January 1,
        1999. The options were exercised in July 2001.


12. NOTES PAYABLE

      In September 2001, the company restructured its note payable to Roger
      Walters, the vendor of Cad Cam Inc. The principal was reduced from
      $1,200,000 to $750,000 in consideration of capital stock payable of
      $450,000. The company agreed to price protection on the 1,756,655 shares
      that were issued to Mr. Walters to a maximum floor price of $.14 per
      share. All principal payments were postponed until January 1, 2002 at
      which time, the Company began making principal payments of $12,500 per
      month plus interest at 4.5% until December 31, 2006.

      Subsequent to June 30, 2002, the company restructured its note payable to
      Roger Walters, reducing the principal from $675,000 to $240,000 in
      consideration of the issuance of 1,000,000 shares of its common stock. The
      company agreed to issue and register the shares upon obtaining shareholder
      approval of an amendment to its Articles of Incorporation increasing its
      authorized capital stock. Principal payments of $4,000 per month will
      begin September 1, 2002 bearing no interest until August 1, 2007.

      In September 2001, the company restructured its note payable to Denise
      Dunne-Fushi, the vendor of MicroTech Professionals Inc. The principal was
      reduced from $1,965,000 to $1,740,000 in consideration of capital stock
      payable of $225,000. In addition, all principal payments were postponed
      until January 1, 2003, at which time, the Company will pay $20,000 per
      month plus interest at 5% until December 31, 2006. The balance of $781,287
      will be due on January 1, 2007. The Company is currently making interest
      payments of $14,397 per month until December 30, 2002.

      Subsequent to June 30, 2002, the company restructured its note payable to
      Denise Dunne-Fushi, reducing the principal from $1,740,000 to $600,000 in
      consideration of the issuance of 3,000,000 shares of its common stock. The
      company agreed to issue and register the shares upon obtaining shareholder
      approval of an amendment to its Articles of Incorporation increasing its
      authorized capital stock. Principal payments of $10,000 per month will
      begin November 1, 2002 bearing 5% interest until October 1, 2007. In
      addition, the company agreed to cover the monthly expense associated with
      Ms. Dunne-Fushi's family health benefits and vehicle lease for a period of
      four years.

                                                  June 30,           December 31
                                                     2002                   2001
                                                        $                      $

     Note Payable to Roger Walters                675,000                750,000

     Note Payable to Denise Dunne               1,740,000              1,740,000
                                               ----------             ----------
                                                2,415,000              2,490,000
     Less: current portion                        230,000                150,000
                                               ----------             ----------
                                                2,185,000             $2,340,000
                                               ==========             ==========

    c)   Capital repayments as at June 30, 2002

         2002                   95,000
         2003                  390,000
         2004                  390,000
         2005                  390,000
         2006                  370,000
         2007                  780,000
                            ----------
                            $2,415,000
                            ==========



                                      -21-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)



13. CAPITAL STOCK

   a)  Authorized

      30,000,000   Common stock, no par value (15,000,000 at December 31, 2000)
       1,000,000   Preferred stock, issuable in series,
                   rights to be determined by the Board of Directors

   b)  Issued

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

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

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

          Original Balance as of December 31, 1998      1,717,875    1,448,368
          Issuance of Shares for pooling of interest      777,260      344,576
                                                        ---------    ---------

          Revised Balance as of December 31, 1998       2,495,135    1,792,944
                                                        =========    =========

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

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

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

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

       During 2000, 3,533,111 common stock were issued for services rendered
       totaling $3,160,288. An amount of $110,000 has been included in the
       acquisition of MicroTech and the balance of $3,050,288 has been included
       in financing expenses as of December 31, 2000.

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

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

       On September 13, 2000, the Company. entered into an agreement with
       Burlington Capital Markets Inc. to aid the company in further
       acquisitions. A total of 425,000 common shares has been reflected as
       issued for an aggregate cost of $717,250. This amount has been expensed
       in the year ended December 31, 2000 and is included in Acquisition costs
       and financing expenses.

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




                                      -22-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)



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

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

       During the year ended December 31, 2001, the Company issued 30,632 shares
       of its common stock in consideration of legal services, 300,000 shares of
       its common stock in consideration of investment banking services, 596,667
       shares to reduce common stock payable of $709,005, and 93,883 shares in
       settlement of accounts payable.

       During the three months ended March 31, 2002, the Company issued 588,235
       shares of its common stock as payment of an executive bonus, 1,756,655
       shares to reduce common stock payable of $474,297, and 665,517 shares in
       settlement of accounts payable.

       During the three months ended June 30, 2002, the Company issued 250,000
       shares of its common stock in consideration of public relations services,
       and 181,818 shares of its common stock in consideration of marketing and
       communications services.

       On May 24, 2002, the company entered into a loan agreement with Tazbaz
       Holdings Inc., an Ontario Corporation. Pursuant to the agreement, Tazbaz
       securitized an overdraft position of the company with Bank One in the
       amount of $650,000 in consideration of an aggregate of 5,000,000 shares
       of its common stock to be issued upon an amendment to the company's
       Articles of Incorporation permitting an increase in the company's
       authorized capital stock.

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

    c) Liabilities payable in common stock

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

       During the three months ended March 31, 2002, the company issued
       1,756,655 shares to reduce a note payable of $474,297 to Roger Walters
       related to the purchase of CadCam Inc. The balance at June 30, 2002
       represents $225,000 to Denise Dunne in settlement of a note payable.


    d) Preferred Stock

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

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

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




                                      -23-
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)

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

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

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

       The preferred stock are convertible into common stock at the option of
       the holders under certain conditions, at any time after the effective
       date of the registration statement. As of December 31, 2000, 1,050 Series
       A preferred stock and 750 Series B preferred stock were not yet converted
       into common stock.

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

       The holders of the shares of Series C Preferred Stock are entitled to
       receive preferential dividends in cash, on a quarterly basis commencing
       on June 30, 2001, out of any of the Company's funds legally available at
       the time of declaration of dividends before any other dividend
       distribution will be paid or declared and set apart for payment on any
       shares of the Company's common stock, or other class of stock presently
       authorized, at the rate of 7% simple interest per annum on the stated
       value per share plus any accrued but unpaid dividends, when as and if
       declared. The Company has the option to pay such dividends in shares of
       the Company's common stock to be paid (based on an assumed value of
       $1,000 per share) in full shares only, with a cash payment equal to any
       fractional shares.

       The number of shares of the Company's common stock into which the Series
       C Preferred stock shall be convertible into that number of shares of
       common stock equal to (i) the sum of (A) the stated value per share and
       (B) at the holder's election, accrued and unpaid dividends on such share,
       divided by (ii) the Conversion Price". The "Conversion Price" shall be
       the lesser of (x) 87.5% of the average of the 5 lowest daily volume
       weighted average prices of the Company's common stock during the period
       of 60 consecutive trading days immediately prior the date of the
       conversion notice; or (y) 90% of the average of the daily volume weighted
       average prices during the period of the 5 trading days prior to the
       applicable closing date ($.4798 with respect to the 1,105 shares of
       Series C 7% Preferred Stock issued and outstanding). The Conversion Price
       is subject to certain floor and time limitations. At any time prior to
       October 24, 2001, the Company may, in its sole discretion, redeem in
       whole or in part, the then issued and outstanding shares of Series C
       Preferred Stock at a price equal to $1,150 per share, plus all accrued
       and unpaid dividends, and after October 24, 2001 at a price equal to
       $1,200 per share, plus all accrued and unpaid dividends.

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

       During the three months ended March 31, 2002, the Company issued 541,593
       common stock on the conversion of 65 Series C preferred stock. The
       Company paid dividends of $21,617 on the conversions.

       During the three months ended June 30, 2002, the Company issued 3,253,534
       shares of its common stock on the conversion of 280 Series C preferred
       stock. The Company paid dividends of $84,506 on the conversions.





                                      -24-
<PAGE>



THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


       During the three months ended June 30, 2002, the company received four
       conversion notices for an aggregate of 435 shares of Series C Preferred
       Stock requiring the issuance of approximately 5,421,386 shares of its
       common stock. The company is unable to honor these conversions until it
       files an amendment to its Articles of Incorporation increasing its
       authorized capital stock, which amendment is subject to shareholder
       approval. The company has reflected the dividend on each of these
       conversions for a total of $51,687.

       On June 25, 2002, the company received letters from two of the holders of
       the Series C Preferred Stock demanding payment of an aggregate of
       $253,250 in liquidated damages as a result of a default of certain
       registration rights. The company believes that it has reached an oral
       agreement whereby such holders would forgo any liquidated damages.

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


    e) Warrants

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

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

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

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

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

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

       On January 26, 2001, the Company: (i) repriced warrants to purchase up to
       100,000 shares of its common stock, which warrant was issued to a certain
       investor in our April 2000 private placement offering of Series B 8%
       Cumulative Preferred Stock, so that such warrant is exercisable at any
       time until April 16, 2005 at a new purchase price of $1.00 per share; (b)
       repriced warrants to purchase an aggregate of up to 280,693 shares of its
       common stock, which warrants were issued to the placement agent, certain
       financial advisors, and the placement agent's counsel in our August 2000
       private placement offering of units, so that such warrants are
       exercisable at any time until August 22, 2005 at a new purchase price of
       $1.00 per share; and (c) issued warrants to purchase up to 250,000 shares
       of its common stock exercisable at any time and in any amount until
       January 26, 2006 at a purchase price of $1.50 per



                                      -25-
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


       share. In February 2001, 150,000 of such warrants were exercised by KSH
       Investment Group, the placement agent in the Company's August 2000
       private placement offering. The exercise prices of the revised and newly
       issued warrants are equal to, or in excess of, the market price of our
       common stock on the date of such revision or issuance.

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

       During the year ended December 31, 2001, the Company issued 723,436
       warrants to the Series C Preferred Stock investors of which 663,484 have
       a strike price of $0.54 and expire on April 18, 2005. The balance of
       59,952 have a strike price of $0.63 and expire on June 8, 2005.

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

         During the three months ended June 30, 2002, the company issued 200,000
         warrants. The warrants were issued to Johnston & Associates, LLC, a
         Washington company, to provide strategic governmental relations
         counseling and marketing representation before the Department of
         Defense, Congress and targeted companies in connection with marketing
         the services of the Company's engineering operations related to
         specific government contracts. The warrants were issued at the fair
         market value on the date of grant and will vest at 50% per year. In
         addition, Johnston & Associates will be compensated at a rate of
         $10,000 per month for twelve months from April 2002 until March 31,
         2003.


    f) Stock Options

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

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

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

       In July 1999, the directors of the company adopted and the stockholders
       approved the adoption of the company's 1998 Stock Option Plan. In May
       2000, the directors approved the adoption of the 2000 Stock Option Plan.
       In June 2001, the directors approved the adoption of the 2001 Stock
       Option Plan. Each of the plans provides for the issuance of 435,000
       options with the following terms and conditions.

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



                                      -26-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


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

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

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

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

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



14. RESTRUCTURING COSTS

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

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


       Description            Cash/   Reserve balance   Restructuring  Activity  Reserve balance
                            non/cash   March 31, 2002        Costs                June 30, 2002

<S>                            <C>        <C>               <C>           <C>         <C>
    Severance packages
     London-Training         Cash        37,646             --        (37,646)        --
       Toronto-R&D           Cash          --               --             --         --
    Lease cancellations
       London-Training       Cash          --               --             --         --
       Toronto-R&D           Cash          --               --             --         --
                                        -------          -------      -------    -------
    Commitments                          37,646             --        (37,646)        --
                                        =======          =======      =======    =======

</TABLE>



<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


15. DEFERRED INCOME TAXES AND INCOME TAXES

    a) Deferred Income Taxes

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


                                                                     June 30,
                                                                        2002
                                                                         $
       Accounting amortization in excess of tax
           amortization                                                9,875
       Losses available to offset future income
           taxes                                                   3,117,220
       Share issue costs                                             532,405
       Adjustment cash to accrual method                            (496,879)
       Investment tax credit                                              --
                                                                   ---------

                                                                   3,162,621

       Less:  Valuation allowance                                  3,313,001
                                                                   ---------

                                                                    (150,380)
                                                                   =========


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


    b) Current Income Taxes

       Current income taxes consist of:

                                                                    June 30,
                                                                       2002

                                                                        $

       Amount calculated at Federal and
              Provincial statutory rates                           (412,874)
                                                                  ----------

       Increase (decrease) resulting from:
              Permanent differences                                 205,527
              Valuation allowance                                   182,047
                                                                  ----------

                                                                    387,574
                                                                  ----------

       Current income taxes                                         (25,300)
                                                                  ==========


       Issue expenses totaling approximately $1,300,000 may be claimed at the
       rate of 20% per year until 2005. To the extent that these expenses create
       a loss, the loss is available to be carried forward for seven years from
       the year the loss is incurred. As the US subsidiaries have been acquired
       by a non-US entity, the taxable income will be increased by approximately
       $1,900,000 over the next three years as the company is required to change
       its taxation method from the cash basis to the accrual basis. The company
       has not reflected the benefit of utilizing non-capital losses totaling
       approximately $8,200,000 in the future as a deferred tax asset as at June
       30, 2002. As at the completion of the June 30, 2002 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.



                                      -27-
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


16. OTHER COMPREHENSIVE INCOME (LOSS)

   Comprehensive income (loss) for the three months ended June 30, 2002:

<TABLE>
<CAPTION>


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

<S>                                                              <C>                  <C>                      <C>
    Foreign currency translation adjustments                     61,005                      --                   61,005

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

    Other comprehensive income (loss)                            61,005                      --                   61,005
                                                               =========                ========               =========



   Comprehensive income (loss) for the three months ended March 31, 2002:



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

    Foreign currency translation adjustments                    (277,058)                    --                 (277,058)

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

    Other comprehensive income (loss)                           (277,058)                    --                 (277,058)
                                                               =========                ========               =========


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



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

    Foreign currency translation adjustments                    209,506                    -                     209,506

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

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

</TABLE>


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


17.   DISCONTINUED OPERATIONS

    Effective March 1, 2002, the Company sold its technology division, Njoyn
    Software Incorporated to Cognicase Inc., a Canadian company. Net proceeds
    after broker fees were $1,320,000 of which the company received $800,000 in
    cash and $550,000 worth of unrestricted common shares on closing. The shares
    were sold on March 11, 2002 for value of $524,673. As part of the
    transaction, Cognicase assumed all of the staff in the Company's technology
    division. The company will not have future revenues from either its Njoyn or
    Secondwave products and therefore the technology operations have been
    reported as discontinued. Technology revenue for the three months ended
    March 31 was $42,000 for 2002 and $200,000 for 2001. The operating loss from
    the technology division for the three months ended March 31 was $110,000 for
    2002 and $80,000 for 2001. The operating loss from the technology division
    for the three months ended June 30 was $17,000 for 2002 compared to income
    of $11,000 for 2001. On disposal, Njoyn had approximately $950,000 in assets
    consisting primarily of deferred development charges and approximately
    $30,000 in liabilities consisting primarily of capital lease obligations.
    The gain on disposal of $497,579 has been reflected in the Income (loss)
    from discontinued operations. No income taxes have been reflected on this
    disposition as the sale of the shares gives rise to a capital loss, the
    benefit of which, is more likely than not to be realized.



                                      -28-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)



18. SEGMENTED INFORMATION
<TABLE>
<CAPTION>


      a) Sales by Geographic Area

                                           Three Months            Three Months            Six Months              Six Months
                                       Ended June 30, 2002     Ended June 30, 2001    Ended June 30, 2002     Ended June 30, 2001
                                       -------------------     -------------------    -------------------     -------------------
                                                $                       $                        $                       $

<S>                                         <C>                     <C>                      <C>                     <C>
                            Canada          3,256,895               3,169,243                6,726,626               8,148,674
          United States of America          4,120,157               6,571,694                8,056,103              12,090,464
                                           ----------              ----------               ----------              ----------
                                            7,377,052               9,740,937               14,782,729              20,239,138
                                           ==========              ==========               ==========              ==========


      b) Net Income (Loss) by Geographic Area

                                Three Months            Three Months            Six Months              Six Months
                                       Ended June 30, 2002     Ended June 30, 2001    Ended June 30, 2002     Ended June 30, 2001
                                       -------------------     -------------------    -------------------     -------------------
                                                $                       $                        $                       $

                            Canada           (457,031)             (1,194,448)                (563,866)             (1,906,989)
          United States of America            (50,274)               (424,586)                (442,909)               (202,341)
                                           ----------              ----------               ----------              ----------
                                             (507,305)             (1,619,034)              (1,006,775)             (2,109,330)
                                           ==========              ==========               ==========              ==========


      c) Identifiable Assets by Geographic Area

                                 Three Months            Year Ended
                                        Ended June 30, 2002       December 31, 2001
                                       --------------------    --------------------
                                                 $                        $

                             Canada          6,088,506                4,995,715
           United States of America          9,398,971               12,179,263
                                            ----------               ----------
                                            15,487,477               17,174,978
                                            ==========               ==========


      d) Revenue and Gross Profit by Operating Segment


                                            Three Months          Three Months            Six Months             Six Months
                                       Ended June 30, 2002   Ended June 30, 2001     Ended June 30, 2002   Ended June 30, 2001
                                       -------------------   -------------------     -------------------   -------------------
                                                 $                    $                      $                       $
            Revenue
                    IT Recruitment           3,348,304            4,467,704              6,883,854               8,979,438
         Tech Pubs and Engineering           3,036,629            3,239,012              6,109,960               7,020,485
                  IT Documentation             500,364              932,395                905,861               2,219,169
                          Training             491,755            1,101,826                883,054               2,020,046
                                            ----------           ----------             ----------              ----------
                                             7,377,052            9,740,937             14,782,729              20,239,138
                                            ==========           ==========             ==========              ==========
            Gross Profit
                    IT Recruitment             356,458            1,279,165              1,055,885               2,591,961
         Tech Pubs and Engineering           1,004,074              957,049              1,936,429               2,017,011
                  IT Documentation             124,910              285,398                236,036               1,001,944
                          Training             269,578              634,292                433,945               1,174,663
                                            ----------           ----------             ----------              ----------
                                             1,755,020            3,155,904              3,662,295               6,785,579
                                            ==========           ==========             ==========              ==========
</TABLE>


    e) Revenues from Major Customers

       The consolidated entity had the following revenues from major Customers:

       For the three months ended June 30, 2002, one customer had sales of
       $2,285,525 which represents approximately 31% of total revenues.

       For the three months ended March 31, 2002, one customer had sales of
       $2,052,787 which represents approximately 28% of total revenues.

       For the year ended December 31, 2001, one customer had sales of
       $6,800,000 which represents approximately 18% of total revenues.

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


                                      -29-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


19. EARNINGS PER SHARE

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

                                         Three Months     Three Months       Six Months       Six Months
                                                Ended            Ended            Ended            Ended
                                        June 30, 2002    June 30, 2001    June 30, 2002    June 30, 2001


<S>                                     <C>             <C>             <C>            <C>
    Average common stock outstanding    24,511,005      14,713,383      21,182,368     13,869,253
    Average common stock issuable               --              --              --             --
                                        ----------      ----------      ----------     ----------
    Average common stock outstanding
      assuming dilution                 24,511,005      14,713,383      21,182,368     13,869,253
                                        ==========      ==========      ==========     ==========

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

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

</TABLE>

20. STOCK OPTION PLANS

    a) Options outstanding
<TABLE>
<CAPTION>

                                                               OPTIONS        WEIGHTED
                                                                               AVERAGE
                                                                              EXERCISE
                                                                                 PRICE

<S>                                                          <C>                <C>
       Options outstanding at December 31, 2000                1,419,617          2.21

       Options granted to key employees and directors             35,000           .68
       Options granted to consultant                              50,000           .70
       Options exercised during the year                         (22,125)          .01
       Options forfeited during the year                        (257,500)         3.21
       Options expired during the year                                -
                                                               ---------

       Options outstanding at December 31, 2001                1,224,992
                                                               =========

       Options granted to key employees and directors                 -
       Options granted to consultant                                  -
       Options exercised during the period                            -
       Options forfeited during the period                      (27,500)         3.22
       Options expired during the period                              -
                                                               ---------

       Options outstanding at March 31, 2002                   1,197,492
                                                               =========
 </TABLE>




                                      -30-
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


<TABLE>
<CAPTION>

<S>                                                          <C>                 <C>
       Options granted to key employees and directors                 -
       Options granted to consultant                                  -
       Options exercised during the period                            -
       Options forfeited during the period                      (45,000)         3.22
       Options expired during the period                              -
                                                               ---------

       Options outstanding at June 30, 2002                    1,152,492
                                                               =========


       Options exercisable December 31, 2000                     714,117          1.95
       Options exercisable December 31, 2001                   1,059,659          1.75
       Options available for future grant December 31, 1999      184,500
       Options available for future grant December 31, 2000          --
       Options available for future grant December 31, 2001      261,500
</TABLE>


       During the three months ended June 30, 2002, 45,000 options exercisable
       at between $3.19 and $3.25 have been forfeited by employees following
       their termination and the expiry of their option periods to August 16,
       2002.

       During the three months ended March 31, 2002, 27,500 options exercisable
       at between $3.19 and $3.25 have been forfeited by employees following
       their termination and the expiry of their option periods to April 16,
       2002.



    b) Range of Exercise Prices at December 31, 2001
<TABLE>
<CAPTION>


                     Outstanding     Weighted          Options        Options    Weighted
                       Options       Average         Outstanding    exercisable  Average
                                    Remaining          Average                   Exercise
                                        Life         Exercise Price                Price


<S>   <C>     <C>       <C>          <C>                 <C>            <C>          <C>
      $2.10 - $3.25     679,992      2.73 years          $2.88          514,659      $2.80

      $1 and under      545,000      3.06 years          $0.75          545,000      $0.75

</TABLE>


    c) Pro-forma net income

       The company applies Accounting Principles Board Opinion No. 25,
       "Accounting of Stock Issued to Employees" and related interpretation in
       accounting for its stock option plans. Accordingly, no compensation cost
       has been recognized for such plans. Had compensation cost been
       determined, based on the fair value at the grant dates for options
       granted during 2001, 2000 and 1999, consistent with the method of SFAS
       No.123, "Accounting for Stock-Based Compensation," the Company's pro
       forma net earnings and pro forma earnings per share for the years ended
       December 31, 2001 and 2000 would have been as follows:


                                    2001 AS           2001
                                   REPORTED        PRO FORMA
                                    --------        ---------

       Net loss                    (9,683,442)    (10,128,562)
       Net loss after preferred
          share dividends         (10,412,182)    (10,857,302)

       Basic and fully diluted
          Loss per share                (0.65)          (0.68)
          loss per share after
              preferred dividends       (0.70)          (0.73)


                                      -31-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


    d) Black Scholes Assumptions

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

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



21. SUPPLEMENTAL INFORMATION

    a) MicroTech Professionals Inc. acquisition

       The following represents that results of operations as though MicroTech
       had been acquired as of January 1, 2000 and as of January 1, 1999.

                                       December 31, 2000     December 31, 1999

       Revenue                                45,788,302            32,173,548
       Net income                             (8,483,765)              402,430

       Earnings per share                          (2.17)                  .08

       Earnings per share - fully diluted          (2.17)                  .07


    b) TidalBeach Inc. pooling of interests

       The results of operations include the following amounts for the period
       prior to the combination of TidalBeach Inc. on November 15, 2000

       Revenue                                 $ 657,715

       Net income                              $ 158,039

       There are no inter-company transactions and no adjustments have been
       required to adopt the same accounting practices or combine the net income
       of the combining companies


       Reconciliation of revenue and net income(loss) previously reported
<TABLE>
<CAPTION>


       December 31, 1999     Previously       ObjectArts     TidalBeach         Restated
                              Reported

<S>                           <C>             <C>               <C>           <C>
       Revenue                19,822,861      6,599,496         610,078       27,032,435

       Net income(loss)          228,720       (251,128)         17,085           (5,323)


</TABLE>



                                      -32-
<PAGE>

THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


22. CONTINGENCIES

a) Lease Commitments

       Minimum payments under operating leases for premises occupied by the
       company and its subsidiaries offices, located throughout Ontario, Canada
       and the United States, exclusive of most operating costs and realty
       taxes, as at June 30, 2002 for the next five years are as follows:

                2002                         $  495,155
                2003                            586,624
                2004                            555,366
                2005                            554,916
                2006                            458,634
          Thereafter                            458,634
                                               --------

                                             $3,109,329
                                             ==========


23.  SUBSEQUENT EVENTS


        On July 1, 2002 and as amended on August 1, 2002 and August 31, 2002,
        the company entered into a Forbearance and Modification Agreement with
        its senior lender, Bank One whereby the Bank agreed to forebear from
        exercising its rights and remedies against the company as a result of
        its violation of certain loan covenants, until the period ending August
        31, 2002. Under the terms of the agreement, the Bank is entitled to a
        forbearance fee of $50,000 and payment of related legal fees and
        expenses. The interest rate on the revolving line facility was increased
        to prime plus 3%. The company has continued to borrow from the revolving
        line facility subject to eligible accounts receivables as monitored
        weekly by the Bank. In the event that the company defaults under the
        agreement including the failure to make payment when due, the Bank is
        entitled to exercise any and all of its security rights including
        foreclosing on collateral.

        On August 13, 2002, the company received a commitment from Morrison
        Financial Services Limited for a syndicated financing arrangement that
        will provide the funding necessary to purchase Bank One's debt and
        security. The partners in the syndicate are Maple Partners America Inc.,
        Morrison Financial Services Limited and MFI Export Finance Inc. Bank One
        has agreed to extend the expiration of the Forbearance and Modification
        Agreement until August 31, 2002 to allow the syndicate to complete the
        financing arrangement.

        On July 31, 2002, the company restructured its note payable to Roger
        Walters, reducing the principal from $675,000 to $240,000 in
        consideration of the issuance of 1,000,000 shares of its common stock.
        The company agreed to issue and register the shares upon obtaining
        shareholder approval of an amendment to its Articles of Incorporation
        increasing its authorized capital stock. Principal payments of $4,000
        per month will begin September 1, 2002 bearing no interest until August
        1, 2007.

        On July 31, 2002, the company restructured its note payable to Denise
        Dunne-Fushi, reducing the principal from $1,740,000 to $600,000 in
        consideration of the issuance of 3,000,000 shares of its common stock.
        The company agreed to issue and register the shares upon obtaining
        shareholder approval of an amendment to its Articles of Incorporation
        increasing its authorized capital stock. Principal payments of $10,000
        per month will begin November 1, 2002 bearing 5% interest until October
        1, 2007. In addition, the company agreed to cover the monthly expense
        associated with Ms. Dunne-Fushi's family health benefits and vehicle
        lease for a period of four years.

        On August 14, 2002, the company received a Nasdaq Staff Determination
        letter indicating that it was not in compliance with the minimum bid
        price or net tangible assets requirements for continued listing, as set
        forth in Nasdaq's Marketplace Rule 4310(c)(4). The company also failed
        to meet the initial inclusion requirements under Nasdaq's Marketplace
        Rule 4310(c)(2)(A) including minimum stockholders' equity of $5 million,
        market capitalization of $50 million or net income of $750,000
        (excluding extraordinary or non-recurring items) in the most recently
        completed fiscal year or in two of the last three most recently
        completed fiscal years. As a result, the company's securities will be
        delisted from The Nasdaq SmallCap Market on August 22, 2002. The company
        intends to appeal the Staff's determination to the Listing
        Qualifications Panel, pursuant to the procedures set forth in the Nasdaq
        Marketplace Rule 4800 Series. A hearing request will stay the delisting
        of the Company's securities pending the Panel's decision.



                                      -33-
<PAGE>


THINKPATH INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2002
(AMOUNTS EXPRESSED IN US DOLLARS)


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
       The company does not believe it is subject to any significant
       concentration of credit risk. Cash and short-term investments are in
       place with major financial institutions, North American Government, and
       major corporations.

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

    d) Fair Value of Financial Instruments

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

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

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


24.  COMPARATIVE FIGURES

     Certain figures in the June 30, 2001 financial statements have been
     reclassified to conform with the basis of presentation used in June 30,
     2002.




                                      -34-
<PAGE>


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

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

OVERVIEW

          We are a global provider of technological solutions and services in
engineering knowledge management including design, drafting, technical
publishing, e-learning and staffing. Our customers include Department of Defense
contractors, aerospace, automotive and financial services companies, Canadian
and American governmental entities and large multinational companies, including
Lockheed Martin, General Dynamics, General Electric, General Motors, Ford
Motors, Goldman Sachs, CIBC and EDS Canada Inc.

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

Consolidation

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

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

          At June 30, 2002, all of our investments in non-related companies
totaling $1,013,926 were accounted for using the cost method. Accounting for an
investment under either the equity or cost method has no impact on evaluation of
impairment of the underlying investment; under either method, impairment losses
are recognized upon evidence of permanent losses of value.




                                      -35-
<PAGE>



Revenue Recognition

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

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

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

           Effective March 1, 2002, we sold our technology division, Njoyn
Software Incorporated to Cognicase Inc, a Canadian company. As part of the
transaction, Cognicase assumed all of the (eight employees) staff in our
technology division and is contracting the services of our Chief Information
Officer for a period of six months. There was no revenue from Njoyn for the
three months ended June 30, 2002 and it represented less than 1% for the three
months ended June 30, 2001. Revenue from Njoyn represented less than 1% of total
revenue for the three months ended March 31, 2002, and 2001. As a result of the
sale to Cognicase, we will not have future revenues from Njoyn and the
operations have been reported as discontinued.

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

           There was no revenue from SecondWave for the three months ended June
30, 2002. Revenue from SecondWave represented less than 2% of total revenue for
the three months ended June 30, 2001. Revenue from SecondWave represented less
than 1% of total revenue for the three months ended March 31, 2002 and 2001. As
part of the sale of Njoyn, Cognicase Inc. assumed all of our technology staff.
As a result, we do not anticipate future revenues from SecondWave Inc. and the
operations have been reported as discontinued.


Carrying Value Goodwill and Intangible Assets

           Prior to January 1, 2002, our goodwill and intangible assets were
accounted for in accordance with Statement of Financial Accounting Standards No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of. This statement required us to evaluate the carrying
value of our goodwill and intangible assets upon the presence of indicators of
impairment. Impairment losses were recorded when estimates of undiscounted
future cash flows were less than the value of the underlying asset. The
determination of future cash flows or fair value was based upon assumptions and
estimates of forecasted financial information that may differ from actual
results. If different assumptions and estimates were used, carrying values could
be adversely impacted, resulting in write downs that would adversely affect our
earnings. In addition, we amortized our goodwill balances on a straight-line
basis over 30 years. The evaluation of the useful life of goodwill required our
judgment, and had we chosen a shorter time period over which to amortize
goodwill, amortization expense would have increased, adversely impacting our
operations. As of June 30, 2002, we had goodwill of $5,128,991. At December 31,
2001, we recorded an impairment of goodwill of $3,001,391 based on our
evaluation of carrying value and projected cash flows.



                                      -36-
<PAGE>


            Effective January 1, 2002, we adopted Statements of Financial
Accounting Standards No. 141, Business Combinations, No. 142, Goodwill and Other
Intangible Assets and No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. These statements require us to evaluate the carrying value of
our 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. We will perform the first of the required
impairment tests of goodwill in 2002, and we have not yet determined the effect
of these tests on our earnings and financial position. In addition, under these
statements, goodwill will no longer be amortized, which will benefit our 2002
net income by approximately $454,908.

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


THE THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2001

Revenue

             For the three months ended June 30, 2002, we derived 56% of our
revenue in the United States compared to 67% for the three months ended June 30,
2001. The decrease in the total revenue derived in the United States is a
result of the increase in IT Recruitment sales in Canada and the decrease in
Technical Training and IT Documentation sales in the United States.

             For the three months ended June 30, 2002, our primary source of
revenue was recruitment, representing 45% of total revenue compared to 46% for
the three months ended June 30, 2002. Recruitment revenue for the three months
ended June 30, 2002 decreased by $1,120,000 or 25% to $3,350,000 compared to
$4,470,000 for the three months ended June 30, 2001. The decrease in recruitment
revenue is a result of cutbacks and reduced hiring in the telecommunications,
network and financial services industries. Our recruitment division has
preferred supplier agreements with AT&T, Rogers Communications, Sprint Canada
and several Canadian banks.

             We perform permanent, contract and executive searches for IT and
engineering professionals. Most searches are performed on a contingency basis
with fees due upon candidate acceptance of permanent employment or on a
time-and-materials basis for contracts. Retained searches are also offered, and
are paid by a non-refundable portion of one fee prior to performing any
services, with the balance due upon candidates' acceptance. The revenue for
retained searches is recognized upon a candidate's acceptance of employment.

             Selected recruitment customers include Fujitsu, Bank of Montreal,
EDS Canada Inc., Goldman Sachs, and Sprint Canada. In the case of contract
services, we provide our customers with independent contractors or "contract
workers" who usually work under the supervision of the customer's management.
Generally, we enter into a time-and-materials contract with our customer whereby
the customer pays us an agreed upon hourly rate for the contract worker. We pay
the contract worker pursuant to a separate consulting agreement. The contract
worker generally receives between 75% and 80% of the amount paid to us by the
customer; however, such payment is usually not based on any formula and may vary
for different engagements. We seek to gain "preferred supplier status" with our
larger customers to secure a larger percentage of those customers' businesses.
While such status is likely to result in increased revenue and gross profit, it
is likely to reduce gross margin percentage because we are likely to accept a
lower hourly rate from our customers and there can be no assurance that we will
be able to reduce the hourly rate paid to our consultants. In the case of
permanent placement services, we identify and provide candidates to fill
permanent positions for our customers.

           For the three months ended June 30, 2002, 41% of our revenue came
from engineering services including technical publications, engineering design
and e-learning compared to 33% for the three months ended June 30, 2001. Revenue
from engineering services for the three months ended June 30, 2002 decreased by
$200,000 or 6% to $3,040,000 compared to $3,240,000 for the three months ended
June 30, 2001. Although the majority of our revenue continues to be derived from
IT Recruitment, our focus is on growing the engineering services division. In
particular, we are focused on expanding into the defense, aerospace and
automotive industries and leveraging off existing engineering customers to
secure new technical publication and e-learning business.

           The decrease in engineering sales is a result of the postponement of
large contracts awarded in 2001 and the first quarter of 2002. Many of these
contracts did not begin until the end of the second quarter. It is anticipated
that the revenues from these contracts will contribute to the growth in
engineering sales in the third and fourth quarters of 2002.



                                      -37-
<PAGE>


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

           For the three months ended June 30, 2002, information technology
documentation services represented approximately 7% of our revenue compared to
10% for the three months ended June 30, 2001. Revenue from information
technology documentation services for the three months ended June 30, 2002
decreased by $430,000 or 46% to $500,000 compared to $930,000 for the three
months ended June 30, 2001.

               The substantial decrease in revenue from information technology
documentation services is primarily due to the loss of sales personnel and the
general economic slowdown in this industry. This division offers a very
specialized service, and relied on several key customers in a very localized
market. Many of these customers have either cancelled projects or have put a
number of their projects on hold. In response to these conditions, we have
recently expanded the marketing of our documentation services to other regions
and to existing recruitment and engineering services customers. In addition, we
have reduced our operating expenses for this division to support the current
levels of revenue.

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

           For the three months ended June 30, 2002, technical training
represented approximately 7% of our revenue compared to 11% for the three months
ended June 30, 2001. Revenue from technical training for the three months ended
June 30, 2002 decreased by $610,000 or 55% to $490,000 compared to $1,100,000
for the three months ended June 30, 2001.

               The decline in revenue from technical training is the result of
several factors: the significant restructuring of this division, including the
termination of 12 sales employees; a general decline in the industry resulting
in the cancellation or postponement of technical training contracts; and, the
events of September 11, 2001 which resulted in the temporary closure of our New
York technical training office, the relocation of several clients and continuing
business interruption. In response to these conditions, we continue to reduce
our operating expenses for this division to support the current levels of
revenue. We are actively marketing this division for sale.

               Our training services include advanced training and certification
in Microsoft, Java and Linux technologies, as well as Microsoft applications
such as Outlook and Access. Training services include training requirements
analysis, skills assessment, instructor-led classroom training for small groups
(10 - 16 students), mentoring, e-learning, and self-paced learning materials. We
offer both public and private classes. Selected training customers include
Microsoft, Chase Manhattan Bank, Goldman Sachs, City of New York and Consumers
Gas. Revenue is recognized on delivery of services.


Gross Profit

           Gross profit is calculated by subtracting all direct costs from net
revenue. The direct costs of contract recruitment include contractor fees and
benefits. Gross profit for information technology recruitment services for the
three months ended June 30, 2002 declined to 11% from 29% for the three months
ended June 30, 2001. The decline in gross profit is a result of our focus on
contract sales and our preferred vendor status with large clients for
information technology contract recruitment services. It is often necessary to
lower billing rates and markups to be successful in the bid process. One client,
with an average gross profit margin of 15%, represents 68% of the total revenue
for the recruitment division and 31% of the company's total revenues for the
three months ended June 30, 2002. Revenue from permanent placements has declined
considerably from last year, which has also contributed to the decline in gross
profit. We do not attribute any direct costs to permanent placement services,
therefore the gross profit on such services is 100% of revenue.

               The direct costs of technical publications and engineering
services include wages, benefits, software training and project expenses. The
average gross profit for this division was 33% for the three months ended June
30, 2002 compared to 30% for the three months ended June 30, 2001. The increase
in gross profit for technical publications and engineering services is a result
of the increase in higher margin contracts in technical publications and
e-learning compared to the traditional engineering services. In addition, we are
engaging in more time-and-materials based contracts versus fixed cost which
prevents against project and costs overruns.



                                      -38-
<PAGE>


               The direct costs of information technology documentation services
include contractor wages, benefits, and project expenses. The average gross
profit for the three months ended June 30, 2002 was 25% compared to 31% for the
three months ended June 30, 2001. The decline in gross profit in the current
period is a result of the decrease in higher margin permanent placements and
increase in lower margin contract placements of documentation specialists.

              The direct costs of training include courseware and trainer
salaries, benefits and travel. The average gross profit was 55% for the three
months ended June 30, 2002 compared to 57% for the three months ended June 30,
2001. The decrease in gross profit is a result of higher trainer travel costs
and the higher utilization of contract trainers as a result of the downsizing of
internal staff that occurred in the later half of last year.

THE SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 2001

Revenue

               For the six months ended June 30, 2002, we derived 55% of our
revenue in the United States compared to 60% for the six months ended June 30,
2001. The decrease in the total revenue derived from the United States is a
result of the increase in IT Recruitment sales in Canada and the decrease in
Technical Training and IT Documentation sales in the United States.

               For the six months ended June 30, 2002, our primary source of
revenue was recruitment, representing 47% of total revenue compared to 44% for
the six months ended June 30, 2001. Recruitment revenue for the six months ended
June 30, 2002 decreased by $2,100,000 or 23% to $6,880,000 compared to
$8,980,000 for the six months ended June 30, 2001. The decrease in recruitment
revenue is a result of cutbacks and reduced hiring in the telecommunications,
network and financial services industries.

               For the six months ended June 30, 2002, 41% of our revenue came
from engineering services including technical publications, engineering design
and e-learning compared to 35% for the six months ended June 30, 2001. Revenue
from engineering services for the six months ended June 30, 2002 decreased by
$910,000 or 13% to $6,110,000 compared to $7,020,000 for the six months ended
June 30, 2001. The decrease in engineering sales is a result of the postponement
of large contracts awarded in 2001 and the first quarter of 2002. Many of these
contracts did not begin until the end of the second quarter. It is expected that
the revenues from these contracts will contribute to the growth in engineering
sales in the third and fourth quarters of 2002.

              For the six months ended June 30, 2002, information technology
documentation services represented approximately 6% of our revenue compared to
11% for the six months ended June 30, 2001. Revenue from information technology
documentation services for the six months ended June 30, 2002 decreased by
$1,310,000 or 59% to $910,000 compared to $2,220,000 for the six months ended
June 30, 2001.

              The substantial decrease in revenue from information technology
documentation services is primarily due to the loss of sales personnel and the
general economic slowdown in this industry. This division offers a very
specialized service, and relied on several key customers in a very localized
market. Many of these customers have either cancelled projects or have put a
number of their projects on hold. In response to these conditions, we have
recently expanded the marketing of our documentation services to other regions
and to existing recruitment and engineering services customers. In addition, we
have reduced our operating expenses for this division to support the current
levels of revenue.

               For the six months ended June 30, 2002, technical training
represented approximately 6% of our revenue compared to 10% for the six months
ended June 30, 2001. Revenue from technical training for the six months ended
June 30, 2002 decreased by $1,130,000 or 56% to $890,000 compared to $2,020,000
for the six months ended June 30, 2001.

              The decline in revenue from technical training is the result of
several factors: the significant restructuring of this division, including the
termination of 12 sales employees; a general decline in the industry resulting
in the cancellation or postponement of technical training contracts; and, the
events of September 11, 2001 which resulted in the temporary closure of our New
York technical training office, the relocation of several clients and continuing
business interruption. In response to these conditions, we continue to reduce
our operating expenses for this division to support the current levels of
revenue. We are actively marketing this division for sale.



                                      -39-
<PAGE>



Gross Profit

              Gross profit for information technology recruitment services for
the six months ended June 30, 2002 declined to 15% from 29% for the six months
ended June 30, 2001. The decline in gross profit is a result of our focus on
contract sales and our preferred vendor status with large clients for
information technology contract recruitment services. It is often necessary to
lower billing rates and markups to be successful in the bid process. One client,
with an average gross profit margin of 15% represented 63% of the total revenue
for the recruitment division and 29% of the company's total revenues for the six
months ended June 30, 2002. Revenue from permanent placements has declined
considerably from last year, which has also contributed to the decline in gross
profit in this division.

              The average gross profit for the engineering division was 32% for
the six months ended June 30, 2002 compared to 29% for the six months ended June
30, 2001. The increase in gross profit for technical publications and
engineering services is a result of the increase in higher margin contracts in
technical publications and e-learning compared to the traditional engineering
services. In addition, we are engaging in more time-and-materials based
contracts versus fixed cost which prevents against project and costs overruns.

              The average gross profit for the information technology division
for the six months ended June 30, 2002 was 26% compared to 45% for the six
months ended June 30, 2001. The decline in gross profit in the current period is
a result of the decrease in higher margin permanent placements and increase in
lower margin contract placements of documentation specialists.

               The average gross profit for the technical training division was
49% for the six months ended June 30, 2002 compared to 58% for the six months
ended June 30, 2001. The decrease in gross profit is a result of increased
trainer travel costs and the increased utilization of contract trainers as a
result of the downsizing of internal staff that occurred in the third and fourth
quarters of last year.


RESULTS OF OPERATIONS

               The following table presents our statements of operations
reflected as a percentage of our total revenue.
<TABLE>
<CAPTION>

                                                   STATEMENTS OF OPERATIONS--PERCENTAGES
                                                               (UNAUDITED)


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

                                                    2002             2001             2002             2001
                                                    ----             ----             ----             ----

<S>                                                <C>              <C>              <C>               <C>
REVENUE                                            100%             100%             100%              100%
-------                                            ----             ----             ----              ----

COST OF SALES                                       76%              68%              75%               66%
                                                   ----             ----             ----              ----
GROSS PROFIT                                        24%              32%              25%               34%
                                                   ----             ----             ----              ----
EXPENSES
   Administrative                                   12%              23%              14%               15%
   Selling                                          13%              17%              13%               16%
   Financing Expenses                               --%              (1)%             --%                3%
   Depreciation and amortization                     4%               5%               4%                5%
   Restructuring                                    --%               1%              --%                1%
                                                  ----             ----             ----              ----
Income (loss) from continuing operations
before interest charges                             (5)%             (13)%            (6)%              (6)%

 Interest charges                                    3%               2%               3%                2%
                                                  ----             ----             ----              ----
Income (loss) from continuing operations            (8)%            (15)%             (9)%              (8)%

   Income taxes                                      0%               2%              (0)%               2%
                                                  ----             ----             ----              ----
Income (loss) from continuing operations            (8)%            (17)%             (9)%             (10)%

Income (loss) from discontinued operations           1%               0%               3%               (0)%

Net Income (loss)                                   (7)%            (17)%             (6)%             (10)%
                                                  ----             ----             ----              ----
</TABLE>



                                      -40-
<PAGE>


THE THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2001

              Revenue. Revenue for the three months ended June 30, 2002
decreased by $2,360,000 or 24%, to $7,380,000, as compared to $9,740,000 for the
three months ended June 30, 2001. The decrease is primarily attributable to the
decline in revenues from our IT recruitment, IT documentation and training
divisions of 25%, 46% and 55% respectively.

              Cost of Sales. The cost of sales for the three months ended June
30, 2002 decreased by $970,000, or 15%, to $5,620,00, as compared to $6,590,000
for the three months ended June 30, 2001. The cost of sales as a percentage of
revenue increased to 76% compared to 68% for the three months ended June 30,
2001. The increase in cost as a percentage of sales corresponds with the
increase in lower margin IT recruitment sales.

              Gross Profit. Gross profit for the three months ended June 30,
2002 decreased by $1,400,000, or 44%, to $1,760,000 compared to $3,160,000 for
the three months ended June 30, 2001. This decrease was attributable to the
overall decrease in revenue and the increase in cost of sales during the three
months ended June 30, 2002. As a percentage of revenue, gross profit decreased
from 32% for the three months ended June 30, 2001 to 24% for the three months
ended June 30, 2002. This decrease in gross profit is a direct result of the
increase in direct costs associated with IT recruitment sales.

               Expenses. Expenses for the three months ended June 30, 2002
decreased by $2,230,000, or 51%, to $2,110,000 compared to $4,340,000 for the
three months ended June 30, 2001. Administrative expenses decreased $1,370,000
or 61% to $880,000 compared to $2,250,000 for the three months ended June 30,
2001. This decrease is related to the significant reduction in administrative
salaries and other expenses as a result of restructuring and general cost
cutting. Selling expenses for the three months ended June 30, 2002 decreased by
$680,000, or 42%, to $930,000 from $1,610,000 for the three months ended June
30, 2001. This decrease is attributable to the decrease in sales salaries and
commissions, as a result of the reduction in sales and the elimination of
certain advertising and promotional expenses. For the three months ended June
30, 2002, depreciation and amortization expenses decreased by $160,000, or 34%,
to $310,000 from $470,000 for the three months ended June 30, 2001. This
decrease is primarily attributable to our adoption of Statements of Financial
Accounting Standards No. 141, Business Combinations, No. 142, Goodwill and Other
Intangible Assets and No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Under these statements, goodwill will no longer be amortized.
Amortization of goodwill for the three months ended June 30, 2001 amounted to
$132,000. For the three months ended June 30, 2002, there were no restructuring
charges related to the termination of personnel and the closure of
non-productive branch offices. For the three months ended June 30, 2001,
restructuring charges were $62,000 and related to the closure of our London
training office and termination of personnel.

              Income (Loss) from Continuing Operations. For the three months
ended June 30, 2002, losses from continuing operations decreased by $840,000 to
a loss of $350,000 as compared to a loss of $1,190,000 for the three months
ended June 30, 2001. The decrease in losses is primarily attributable to the
significant reduction in administrative and sales expenses, as well as
amortization.

              Interest Charges. For the three months ended June 30, 2002,
interest charges decreased by $10,000, or 4%, to $230,000 from $240,000 for the
three months ended June 30, 2001.

              Income (Loss) from Continuing Operations before Income Tax. Loss
from continuing operations before income tax for the three months ended June 30,
2002 decreased by $840,000 to a loss of $590,000 as compared to a loss of
$1,430,000 for the three months ended June 30, 2001.

              Income Taxes. Income tax expense for the three months ended June
30, 2002 decreased by $200,000 to $100 compared to an expense of $200,000 for
the three months ended June 30, 2001. The expense in 2001 was a write down of
the deferred income tax asset.

              Income (Loss) from Continuing Operations. Loss from continuing
operations for the three months ended June 30, 2002 decreased by $1,040,000, or
64%, to a loss of $590,000 compared to a loss of $1,630,000 for the three months
ended June 30, 2001.

              Income (Loss) from Discontinued Operations. Operations of the
technology division for the three months ended June 30, 2002 have been reported
as discontinued and include no revenue, cost of sales of $2,000, administrative
expenses of $800, selling expenses of $500, depreciation expense of $10,000 and
interest expense of $4,000. The net loss for the three months ended June 30,
2002 was $17,300. The gain on disposal of $100,000 has been reflected in the
Income (loss) from discontinued operations.

              Operations of the technology division for the three months ended
June 30, 2001 have been reported as discontinued and include revenues of
$275,000, cost of sales of $13,000, administrative expenses of $30,000, selling
expenses of $13,000, depreciation expense of $90,000, restructuring costs of
$110,000 and interest expense of $5,000. Net income for the three months ended
June 30, 2001 was $14,000.

              Net Loss. Net loss for the three months ended June 30, 2002
decreased by $1,110,000 to a net loss of $510,000 compared to a net loss of
$1,620,000 for the three months ended June 30, 2001.


                                      -41-
<PAGE>


THE SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 2001

              Revenue. Revenue for the six months ended June 30, 2002 decreased
by $5,460,000, or 27%, to $14,780,000, as compared to $20,240,000 for the six
months ended June 30, 2001. The decrease is primarily attributable to the
decline in revenues from our IT recruitment, IT documentation and technical
training divisions of 23%, 59% and 56% respectively.

               Cost of Sales. The cost of sales for the six months ended June
30, 2002 decreased by $2,330,000, or 17%, to $11,120,00, as compared to
$13,450,000 for the six months ended June 30, 2001. The cost of sales as a
percentage of revenue increased to 75% compared to 66% for the six months ended
June 30, 2001. The increase in cost as a percentage of sales corresponds with
the increase in lower margin IT recruitment sales.

              Gross Profit. Gross profit for the six months ended June 30, 2002
decreased by $3,130,000, or 46%, to $3,660,000 compared to $6,790,000 for the
six months ended June 30, 2001. This decrease was attributable to the overall
decrease in revenue and the increase in cost of sales during the six months
ended June 30, 2002. As a percentage of revenue, gross profit decreased from 34%
for the six months ended June 30, 2001 to 25% for the six months ended June 30,
2002. This decrease in gross profit is a direct result of the increase in direct
costs associated with IT recruitment sales.

               Expenses. Expenses for the six months ended June 30, 2002
decreased by $3,350,000, or 42%, to $4,600,000 compared to $7,950,000 for the
six months ended June 30, 2001. Administrative expenses decreased $900,000, or
31%, to $2,030,000 compared to $2,930,000 for the six months ended June 30,
2001. This decrease is related to the significant reduction in administrative
salaries and other expenses as a result of restructuring and general cost
cutting. Selling expenses for the six months ended June 30, 2002 decreased by
$1,230,000, or 38%, to $1,970,000 from $3,200,000 for the six months ended June
30, 2001. This decrease is attributable to the decrease in sales salaries and
commissions, as a result of the reduction in sales and the elimination of
certain advertising and promotional expenses. For the six months ended June 30,
2002, depreciation and amortization expenses decreased by $340,000, or 36%, to
$610,000 from $950,000 for the six months ended June 30, 2001. This decrease is
primarily attributable to our adoption of Statements of Financial Accounting
Standards No. 141, Business Combinations, No. 142, Goodwill and Other Intangible
Assets and No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets. Under these statements, goodwill will no longer be amortized.
Amortization of goodwill for the six months ended June 30, 2001 amounted to
$280,000. For the six months ended June 30, 2002, there were no restructuring
charges related to the termination of personnel and the closure of
non-productive branch offices. For the six months ended June 30, 2001,
restructuring charges were $300,000 and related to the closure of our London
training office and termination of personnel.

              Income (Loss) from Continuing Operations. For the six months ended
June 30, 2002, losses from continuing operations decreased by $220,000 to a loss
of $940,000 as compared to a loss of $1,160,000 for the six months ended June
30, 2001. The decrease in losses is primarily attributable to the significant
reduction in administrative and sales expenses, as well as amortization.

              Interest Charges. For the six months ended June 30, 2002, interest
charges decreased by $5,000 or 1% to $470,000 from $475,000 for the six months
ended June 30, 2001.

              Income (Loss) from Continuing Operations before Income Tax. Loss
from continuing operations before income tax for the six months ended June 30,
2002 decreased by $230,000 to a loss of $1,410,000 as compared to a loss of
$1,640,000 for the six months ended June 30, 2001.

               Income Taxes. Income tax expense for the six months ended June
30, 2002 decreased by $425,000 to a recovery of $25,000 compared to an expense
of $400,000 for the six months ended June 30, 2001. The expense in 2001 was a
write down of the deferred income tax asset.

              Income (Loss) from Continuing Operations. Loss from continuing
operations for the six months ended June 30, 2002 decreased by $660,000, or 32%,
to a loss of $1,380,000 compared to a loss of $2,040,000 for the six months
ended June 30, 2001.

              Income (Loss) from Discontinued Operations. Operations of the
technology division for the six months ended June 30, 2002 have been reported as
discontinued and include revenue of $42,000, cost of sales of $21,000,
administrative expenses of $45,000, selling expenses of $6,000, depreciation
expense of $87,000 and interest expense of $8,000. The net loss for the six
months ended June 30, 2002 was $125,000. The gain on disposal of $500,000 has
been reflected in the Income (loss) from discontinued operations.



                                      -42-
<PAGE>


             Operations of the technology division for the six months ended June
30, 2001 have been reported as discontinued and include revenues of $478,000,
cost of sales of $23,000 administrative expenses of $114,000, selling expenses
of $67,000, depreciation expense of $172,000, restructuring costs of $150,000
and interest expense of $18,000. The net loss for the six months ended June 30,
2001 was $66,000.

             Net Loss. Net loss for the six months ended June 30, 2002 decreased
by $1,100,000 to a net loss of $1,010,000 compared to a net loss of $2,110,000
for the six months ended June 30, 2001.


Liquidity and Capital Resources

               We have incurred substantial losses during the last 18 months.
Due to these factors, we had taken additional cost cutting steps in the first
six months of 2002 to reduce our expenses. Specifically, we sold certain
non-performing divisions and assets of such divisions and reduced our staff by
approximately 25 employees.

               In March 2002, we sold our technology division, Njoyn Software
Incorporated to Cognicase Inc., a Canadian company. Our net proceeds after
broker fees were $1,320,000 of which we received $800,000 in cash and $550,000
worth of unrestricted common shares on closing. The shares were sold on March
11, 2002 for value of $ 524,673. As part of the transaction, Cognicase
assumed all of the staff in our technology division (eight employees) and is
contracting the services of our CIO for a period of six months. The proceeds
were used to pay down bank indebtedness with Bank One of $500,000 and a term
loan with Bank One for $260,000. We also used the proceeds to pay past due rent,
professional fees and contractor fees. We believe the sale of Njoyn and the
corresponding reduction in technology expenses will have a significant impact on
our cash flow for the balance of 2002, as the operations had recurring losses
since inception.

               In April 2002, we closed one of our IT recruitment offices,
Systemsearch Consulting Services Inc., and transferred the existing contracts to
our Toronto head office. As a result of the closing, eight of our employees were
terminated. The prior owner of Systemsearch, John Wilson, was also terminated.
Mr. Wilson is subletting the space from us in consideration of certain assets
including furniture and equipment. We do not anticipate a material effect on our
recruitment revenue as a result of the closure of this office, as the contracts
are long-term and will be managed from another office.

               In May 2002, we entered into a series of agreements with triOS
Training Centres Limited, an Ontario company, for the purchase of certain assets
of our Toronto training division, Thinkpath Training. As part of the
transaction, triOS assumed the Toronto training staff (six employees) and is
subletting our classroom facilities. As a result of the sale of this office, our
annual revenue will decline by approximately $1,000,000. Revenue from this
office represented less than 1% of the total revenue for the six months ended
June 30, 2002 and approximately 3% for the six months ended June 30, 2001. We
have also positioned our New York training division for sale upon settlement of
an outstanding insurance claim. Until such a time, we have scaled the operations
down significantly to mitigate further losses. We believe the sale of the
training division will also have an immediate impact on our cash flow as the
fixed overheads are quite significant, particularly rent and equipment leases.

               We expect the reduction of our staff during the six months ended
June 30, 2002 will save approximately $1,000,000. Further reductions during the
second half of the year will save approximately $600,000 on an annualized basis.
Despite the steps that we have taken, to the extent we experience a shortfall in
required revenue or are unable to bill and collect our receivables and unbilled
work-in-progress in a timely manner, it could have a material adverse impact on
our ability to continue as a going-concern and meet our intended business
objectives. Also, a continued slowdown in the economy or the postponement of
large engineering contracts could adversely affect our working capital and/or
operating cash flow.

              With insufficient working capital from operations, the Company's
primary sources of cash have been a revolving line of credit with Bank One and
proceeds from the sale of equity securities. Our primary capital requirements
include debt service, capital expenditures and working capital needs.



                                      -43-
<PAGE>


              At June 30, 2002, we had negative cash or cash equivalents and a
working capital deficiency of $2,920,000. At June 30, 2002, we had a cash flow
deficiency from operations of $715,000 due primarily to the decrease in accounts
payable of $510,000, increase in prepaid expenses of $600,000 and increase in
accounts receivable of $480,000 which was partially offset by the gain on the
disposal of Njoyn of $500,000. At June 30, 2001, we had negative cash or cash
equivalents and a working capital deficiency of $2,450,000. At June 30, 2001, we
had a cash flow from operations of $500,000.

              At June 30, 2002, we had cash flow from investing activities of
$1,090,000 attributable primarily to the proceeds on the disposal of Njoyn of
$1,320,000, which was offset by the purchase of capital assets of approximately
$250,000. At June 30, 2001, we had a cash flow deficit from investing activities
of $700,000 attributable to the purchase of capital assets of $215,000, purchase
of other assets of $295,000 and increase in long-term receivable of $190,000.

               At June 30, 2002, we had a cash flow deficit from financing
activities of $825,000 attributable primarily to long-term debt repayment of
$390,000, the repayment of Roger Walters' note payable of $75,000 and a decrease
in bank indebtedness of $620,000 which was offset by an increase in debt of
$260,000 related to the Terry Lyons loan received in May 2002. At June 30, 2001,
we had cash flow from financing activities of $245,000 attributable primarily to
proceeds from the issuance of common stock of $400,000, proceeds from the
issuance of preferred stock of $1,100,000, and an increase in long-term debt of
$225,000. Cash was used in the repayment of notes payable of $190,000, long-term
debt of $480,000 and bank indebtedness of $810,000.

              At June 30, 2002, the balance of our revolving line of credit with
Bank One was $4,400,000 including an overdraft of approximately $300,000.
Eligible receivables allowed for a maximum borrowing amount of $4,100,000. The
revolving line of credit agreement requires us to meet various restrictive
covenants, including a senior debt to EBITDA ratio, debt service coverage ratio,
debt to tangible net worth ratio and certain other covenants. At June 30, 2002
and thereafter, we were not in compliance with the covenants contained in the
revolving line of credit agreement.

               On July 1, 2002 and as amended on August 1, 2002 and August 15,
2002, we entered into a Forbearance and Modification Agreement with Bank One
whereby the Bank agreed to refrain from exercising its rights and remedies
against us as a result of our violation of certain loan covenants, until the
period ending August 31, 2002. In the event that we default under the agreement
including the failure to make payment when due, the Bank is entitled to exercise
any and all of its security rights including foreclosing on collateral.

               On August 13, 2002, we received a commitment from Morrison
Financial Services Limited for a syndicated financing arrangement that will
provide the funding necessary to purchase Bank One's debt and security. The
partners in the syndicate are Maple Partners America Inc., Morrison Financial
Services Limited and MFI Export Finance Inc. Bank One has agreed to extend the
expiration of the Forbearance and Modification Agreement until August 31, 2002
to allow the syndicate to complete the financing arrangement. If we are not
successful in closing the financing arrangement with Morrison Financial, we
would have to secure a further extension from Bank One on the Forbearance and
Modification Agreement and seek alternative financial arrangements. If we are
unable to either procure a waiver from Bank One or acceptable alternative
financing, such failures could have a material adverse effect on our financial
condition and results of operations.

               In our earlier efforts to obtain alternative financing, we had
signed a term sheet with Investors Corporation on January 31, 2002 for a
Revolving Loan Facility to replace our credit facility with Bank One and
pursuant to the term sheet, we advanced Investors a deposit $100,000. Based on
certain misrepresentations, we have requested a return of our deposit and intend
to take legal action if said deposit is not returned.

              At June 30, 2002, we had $402,670 in subordinated debt outstanding
to the Business Development Bank of Canada. The loan agreements require us to
meet a certain working capital ratio. At June 30, 2002 and thereafter, we were
not in compliance with the covenant contained in the loan agreements. In March
2002, the Business Development Bank consolidated our various loans and
established a new repayment schedule and extended the maturity date after a
nine-month deferment. However, our ability to make subordinated debt and
interest payments continues to be restricted by Bank One.

              In May 2002, we secured a loan of $259,375 from an individual
lender, Terry Lyons, which was secured by an outstanding IRS refund. We paid Mr.
Lyons a placement fee of 10% and the loan bears interest at 30% per annum. We
received the IRS refund in July 2002, but extended the maturity date of Mr.
Lyons loan until August 31, 2002.

              At June 30, 2002, we had approximately $343,249 outstanding on
various capital leases with various payment terms and interest rates. The
average balance on the terms of leases are 12 months and cover primarily the
hardware and various software applications required to support our training and
engineering divisions.

               At June 30, 2002, we had a note payable of $675,000 owed to Roger
Walters, the sole shareholder of CadCam Inc. In September 2001, we restructured
this note, reducing the principal from $1,225,000 to $750,000 in consideration
of the issuance of capital stock in the amount of $450,000. We agreed to price
protection on the 1,756,655 shares that were issued to Mr. Walters to a maximum
floor price of $.14 per share. All principal payments were postponed until
January 1, 2002 at which time, we began making principal payments of $12,500 per
month plus interest at 4.5% until December 31, 2006.

              Subsequent to June 30, 2002, we restructured our note payable to
Roger Walters, reducing the principal from $675,000 to $240,000 in consideration
of the issuance of 1,000,000 shares of our common stock. We agreed to issue and
register the shares upon obtaining shareholder approval of an amendment to our
Articles of Incorporation increasing our authorized capital stock. Principal
payments of $4,000 per month will begin September 1, 2002 bearing no interest
until August 1, 2007.



                                      -44-
<PAGE>


               At June 30, 2002, we had a note payable of $1,740,000 owed to
Denise Dunne-Fushi, the vendor of MicroTech Professionals Inc. In September
2001, we restructured our note payable to Denise Dunne-Fushi, the vendor of
MicroTech Professionals Inc. The principal was reduced from $1,965,000 to
$1,740,000 in consideration of capital stock payable of $225,000. In addition,
all principal payments were postponed until January 1, 2003, at which time, we
were to pay $20,000 per month plus interest at 5% until December 31, 2006. The
balance of $781,287 was due on January 1, 2007.

               Subsequent to June 30, 2002, we restructured our note payable to
Denise Dunne-Fushi, reducing the principal from $1,740,000 to $600,000 in
consideration of the issuance of 3,000,000 shares of our common stock. We agreed
to issue and register the shares upon obtaining shareholder approval of an
amendment to its Articles of Incorporation increasing our authorized capital
stock. Principal payments of $10,000 per month will begin November 1, 2002
bearing 5% interest until October 1, 2007. In addition, we agreed to cover the
monthly expense associated with Ms. Dunne-Fushi's family health benefits and
vehicle lease for a period of four years.

               As a result of the terrorist attacks of September 11, 2001, we
lost our IT recruitment office in the World Trade Center and our training office
located at 195 Broadway was inaccessible for approximately four weeks. The
recruitment office represents approximately $2,000,000 in annual information
technology recruitment revenue. We do not anticipate a material decline in
revenue from this office, as our primary source of revenue was contract
placement, which can continue unobstructed. We lost approximately $75,000 of
fixed assets, including furniture, computer hardware and office equipment. We
have filed an interim statement of loss with our insurance company and to date
have received insurance payments of $75,000 with respect to the claims submitted
for this office.

              Our training office in New York represents approximately
$2,000,000 in annual technical training revenue. Many of our primary customers
have since relocated to other cities and have indicated their postponement of
employee training until the later part of 2002. The estimated loss of revenue
from this office is now between $100,000 and $200,000 per month. In addition,
many of the office's computer assets were malfunctioning as a result of debris
and smoke. As a result of the decline in revenue, we terminated four of twelve
employees from this office in October 2001 and an additional two employees in
March 2002. At this time we do not know what the total loss of revenue will be
for our training operations in New York, or the final amount of our insurance
claim. We have filed an interim statement of loss with our insurance company and
to date have received approximately $250,000 for business interruption which
have been treated as an extraordinary item on the income statement. Once we have
settled the insurance claim, it is our plan to divest this office. We have filed
additional business interruption claims, which have not yet been settled. In
accordance with EITF 01-10 "Accounting for the Impact of the Terrorist Attacks
of September 11, 2001," we have determined our losses directly resulting from
the September 11th events amount to approximately $25,000 net of insurance
recoveries.

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

              Despite our recurring losses and negative working capital, we
believe that we have developed a business plan that, if successfully
implemented, could substantially improve our operational results and financial
condition. However, we can give no assurances that our current cash flows from
operations, if any, borrowings available under our line of credit, and proceeds
from the sale of securities, will be adequate to fund our expected operating and
capital needs for the next twelve months. The adequacy of our cash resources
over the next twelve months is primarily dependent on our operating results and
our ability to secure alternate financing, and settlement of our insurance
claim, all of which are subject to substantial uncertainties. Cash flow from
operations for the next twelve months will be dependent, among other things,
upon the effect of the current economic slowdown on our sales, the impact of the
restructuring plan 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 secure alternate financing, could have a material
adverse effect on our liquidity position and capital resources which may force
us to curtail our operations.


Recent Accounting Pronouncements

              In 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, we will apply the new
accounting rules in the current year. We are currently assessing the financial
impact SFAS No. 141 and No. 142 will have on our Consolidated Financial
Statements. Any transitional impairment loss will be recognized as the
cumulative effect of a change in accounting principle in our statement of
earnings.



                                      -45-
<PAGE>


              In August 2001, the FASB issued SFAS No. 143, "Accounting for
Asset Retirement Obligations" which requires entities to record the fair value
of a liability for an asset retirement obligation in the period in which it is
incurred. We will adopt SFAS No. 143 in 2002. We do not expect the provisions of
SFAS No. 143 to have any significant impact on our financial condition or
results of operations.

              In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which replaces SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of". We will adopt SFAS No. 144 in fiscal year 2002. We do not
expect the provisions of SFAS No. 144 to have any significant impact on our
financial condition or results of operations.


Recent Events

               On July 1, 2002 and as amended on August 1, 2002 and August 15,
2002, we entered into a Forbearance and Modification Agreement with Bank One,
whereby the Bank agreed to forebear from exercising its rights and remedies
against us as a result of our violation of certain loan covenants, until the
period ending August 31, 2002. Under the terms of the agreement, the Bank is
entitled to a forbearance fee of $50,000 and payment of related legal fees and
expenses. The interest rate on the revolving line facility was increased to
prime plus 3%. We have continued to borrow from the revolving line facility
subject to eligible accounts receivables as monitored weekly by the Bank. In the
event that we default under the agreement including the failure to make payment
when due, the Bank is entitled to exercise any and all of its security rights
including foreclosing on collateral.

              On August 13, 2002, we received a commitment from Morrison
Financial Services Limited for a syndicated financing arrangement that will
provide the funding necessary to purchase Bank One's debt and security. The
partners in the syndicate are Maple Partners America Inc., Morrison Financial
Services Limited and MFI Export Finance Inc. Bank One has agreed to extend the
expiration of the Forbearance and Modification Agreement until August 31, 2002
to allow the syndicate to complete the financing arrangement.

              On July 31, 2002, we restructured our note payable to Roger
Walters, reducing the principal from $675,000 to $240,000 in consideration of
the issuance of 1,000,000 shares of our common stock. We agreed to issue and
register the shares upon obtaining shareholder approval of an amendment to our
Articles of Incorporation increasing our authorized capital stock. Principal
payments of $4,000 per month will begin September 1, 2002 bearing no interest
until August 1, 2007.

               On July 31, 2002, we restructured our note payable to Denise
Dunne-Fushi, reducing the principal from $1,740,000 to $600,000 in consideration
of the issuance of 3,000,000 shares of our common stock. We agreed to issue and
register the shares upon obtaining shareholder approval of an amendment to our
Articles of Incorporation increasing our authorized capital stock. Principal
payments of $10,000 per month will begin November 1, 2002 bearing 5% interest
until October 1, 2007. In addition, we agreed to cover the monthly expense
associated with Ms. Dunne's family health benefits and vehicle lease for a
period of four years.

              On August 14, 2002, we received a Nasdaq Staff Determination
letter indicating that we were not in compliance with the minimum bid price or
net tangible assets requirements for continued listing, as set forth in Nasdaq's
Marketplace Rule 4310(c)(4). We also failed to meet the initial inclusion
requirements under Nasdaq's Marketplace Rule 4310(c)(2)(A) including minimum
stockholders' equity of $5 million, market capitalization of $50 million or net
income of $750,000 (excluding extraordinary or non-recurring items) in the most
recently completed fiscal year or in two of the last three most recently
completed fiscal years. As a result, our securities will be delisted from The
Nasdaq SmallCap Market on August 22, 2002. We intend to appeal the Staff's
determination to the Listing Qualifications Panel, pursuant to the procedures
set forth in the Nasdaq Marketplace Rule 4800 Series. A hearing request will
stay the delisting of our securities pending the Panel's decision.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

             Not applicable.




                                      -46-
<PAGE>



                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

             We are party to the following pending legal proceedings:

             In November 1998, we completed the acquisition of certain assets of
Southport Consulting Co. from Michael Carrazza, one of our former directors, for
an aggregate of $250,000 in cash and shares of our common stock. Michael
Carrazza instituted an action against us in the Supreme Court of the State of
New York, County of New York, Index No. 600553/01, alleging breach of contract
and unjust enrichment and seeking at least $250,000 in damages. Specifically,
Mr. Carrazza claimed that we failed to deliver cash or stock to Mr. Carrazza
under an asset purchase agreement, and that he was entitled to recovery of his
attorneys' fees. We filed a counterclaim against Mr. Carrazza, seeking $162,000
in damages, plus punitive damages and attorneys' fees, on the ground that Mr.
Carrazza, as then president and sole stockholder of Southport Consulting Co.,
fraudulently induced us into executing the asset purchase agreement by
misrepresenting the value of the assets being purchased. After the commencement
of discovery, Mr. Carrazza filed a motion for summary judgment, which was
granted in his favor in the sum of $264,602. We intend on filing a notice of
appeal.

             John James Silver, a former employee, commenced an action against
us in the Supreme Court of the State of New York, County of New York, Index No.
113642/01, alleging breach of contract, quantum meruit, and account stated. Mr.
Silver is seeking $81,147 in damages. Specifically, Mr. Silver alleges that we
have breached an employment agreement with him, claiming that we owe him damages
representing unpaid salary, vacation time, a car allowance, severance pay and
stock options. Mr. Silver also claims that we owe him damages for allegedly
having defaulted on payment for certain services that he performed. Mr. Silver
filed a motion seeking to amend his complaint to add claims for fraud, unjust
enrichment and an accounting, and seeking damages in the sum of $330,367. This
motion was subsequently denied by the court. This action, which we will defend
vigorously, is in the early stages of discovery.

              Christopher Killarney, a former employee, filed a statement of
claim against us on June 14, 2002, with the Superior Court of Justice of
Ontario, Canada, Court File No. 02-CV-229385CMS, alleging wrongful dismissal and
breach of contract. Mr. Killarney is seeking between approximately $120,000 and
$650,000 in damages. We intend to defend this claim vigorously.

              On June 25, 2002, we received letters from two of the holders of
the Series C Preferred Stock demanding that we pay them an aggregate of $253,250
in liquidated damages as a result of a default of certain registration rights.
We believe we have reached an oral agreement whereby such holders would forgo
any liquidated damages.

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



ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

              None.


ITEM 3. DEFAULTS IN SENIOR SECURITIES

              We are in breach of the loan covenants governing our credit line
facility with Bank One; including a senior debt to EBITDA ratio, debt service
coverage ratio, debt to tangible net worth ratio and certain other covenants. At
June 30, 2002, we had $4,400,000 outstanding with Bank One.


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

               None.



ITEM 5.  OTHER INFORMATION


         None.



                                      -47-
<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)       Exhibits

          Exhibit 99.1 - Certification pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

          Exhibit 99.2 - Certification pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

(b)       Reports on Form 8-K.

          On March 21, 2002, Thinkpath filed a report on Form 8-K to disclose
          the disposition of its subsidiary, Njoyn Software Incorporated.





                                      -48-
<PAGE>




                                   SIGNATURES

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

                               THINKPATH INC.


Dated: August 19, 2002      By: /s/ Declan French       By: /s/ Kelly Hankinson
                             ---------------------       -----------------------
                             Declan French               Kelly L. Hankinson
                             Chief Executive Officer     Chief Financial Officer
















                                      -49-
<PAGE>