UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION  Washington, D.C. 20549

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# FORM 10-Q

(Mark One)

|[X] | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934           For the quarterly period ended
                       March 31, 2008
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OR

|[_] | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934          For the transition period from
            _______________________ to _______________________
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Commission file number
000-23967

|WIDEPOINT CORPORATION                                 
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|Delaware                                                                       | 52-2040275                       
|------------------------------------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of                                                | (IRS Employer Identification No.)
|incorporation or organization)                                                
|One Lincoln Centre, 18W140 Butterfield Road, Suite 1100, Oakbrook Terrace, Ill | 60181                            
|(Address of principal executive offices)                                       | (Zip Code)                       

Registrants telephone number,
including area code:  (630) 629-0003

Indicate
by check whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. YesX No

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filerand smaller reporting company in
Rule 12b-2 of the Exchange Act.

Large accelerated filer
|_|                   Accelerated filer |_|                  Non-accelerated
filer |_|                   Smaller reporting company |X|

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes NoX

As of May 12, 2008, 56,533,687 shares
of common stock, $.001 par value per share, were outstanding.

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WIDEPOINT CORPORATION

INDEX

|                                   |                                                                        
|---------------------------------- | -----------------------------------------------------------------------
|                                   |                                                                        
|Part I.      FINANCIAL INFORMATION |                                                                        
|Item 1.                            | Condensed Consolidated Financial Statements                            
|                                   | Condensed Consolidated Balance Sheets as of March 31, 2008 (unaudited) 
|                                   | and December 31, 2007 (unaudited)                                      
|                                   | Condensed Consolidated Statements of Operations for the three months   
|                                   | ended March 31, 2008 and 2007 (unaudited)                              
|                                   | Condensed Consolidated Statements of Cash Flows for the three months   
|                                   | ended March 31, 2008 and 2007 (unaudited)                              
|                                   | Notes to Condensed Consolidated Financial Statements                   
|Item 2.                            | Managements Discussion and Analysis of Financial Condition and Results
|                                   | of Operations                                                          
|Item 4T.                           | Controls and Procedures                                                
|Part II.      OTHER INFORMATION   
|Item 2.                            | Unregistered Sales of Equity Securities and Use of Proceeds.           
|Item 6.                            | Exhibits                                                               
|SIGNATURES                         | 27                                                                     
|CERTIFICATIONS                     |                                                                        

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# PART I. FINANCIAL
INFORMATION

# ITEM 1. CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

# WIDEPOINT CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS

|Consolidated Balance Sheets                                                   | March 31,   | December 31,
|----------------------------------------------------------------------------- | ----------- | ------------
|
|Assets                                                                        | (unaudited)
|Current assets:                                                               |             |             
|Cash and cash equivalents                                                     |             |             
|Accounts receivable                                                           |             |             
|Prepaid expenses and other assets                                             |             |             
|                                                                              |             |             
|Total current assets                                                          |             |             
|                                                                              |             |             
|Property and equipment, net                                                   |             |             
|Goodwill                                                                      |             |             
|Intangibles, net                                                              |             |             
|Other assets                                                                  |             |             
|                                                                              |             |             
|Total assets                                                                  |             |             
|                                                                              |             |             
|Liabilities and stockholders equity                                          |             |             
|Current liabilities:                                                          |             |             
|Short-term borrowings                                                         |             |             
|Accounts payable                                                              |             |             
|Accrued expenses                                                              |             |             
|Deferred revenue                                                              |             |             
|Short-term portion of capital lease obligation                                |             |             
|                                                                              |             |             
|Total current liabilities                                                     |             |             
|                                                                              |             |             
|Long-term debt, net of current portion                                        |             |             
|Capital lease obligation, net of current portion                              |             |             
|                                                                              |             |             
|Total liabilities                                                             |             |             
|                                                                              |             |             
|Stockholders equity:                                                         |             |             
|Common stock, $0.001 par value; 110,000,000 shares authorized; 54,090,697 and |             |             
|52,558,697 shares issued and outstanding, respectively                        |             |             
|Stock warrants                                                                |             |             
|Additional paid-in capital                                                    |             |             
|Accumulated deficit                                                           |             |             
|                                                                              |             |             
|Total stockholders equity                                                    |             |             
|                                                                              |             |             
|Total liabilities and stockholders equity                                    |             |             
|                                                                              |             |             

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

1

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

|                                                          | Three Months Ended
March 31,
|--------------------------------------------------------- | ----------------------------
|
|
|Revenues, net                                             |                             
|Cost of sales (including amortization and depreciation of |                             
|$213,906 and $110,049, respectively)                      |                             
|                                                          |                             
|Gross profit                                              |                             
|Sales and marketing                                       |                             
|General & administrative (including stock compensation    |                             
|expense 123(r) of $371,702 and $63,976, respectively)     |                             
|Depreciation expense                                      |                             
|                                                          |                             
|Loss from operations                                      |                             
|Interest income                                           |                             
|Interest expense                                          |                             
|                                                          |                             
|Net loss before income tax                                |                             
|Income tax benefit, net                                   |                             
|                                                          |                             
|Net loss                                                  |                             
|                                                          |                             
|Basic and diluted net loss per share                      |                             
|                                                          |                             
|Basic and diluted weighted average shares outstanding     |                             

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

2

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES  CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                                | Three Months Ended
March 31,
|--------------------------------------------------------------- | ----------------------------
|
|
|Cash flows from operating activities:                           |                             
|Net loss                                                        |                             
|Adjustments to reconcile net loss to net cash                   |                             
|provided by (used in) operating activities:                     |                             
|Depreciation expense                                            |                             
|Amortization                                                    |                             
|Amortization of deferred financing costs                        |                             
|Stock options expense                                           |                             
|Changes in assets and liabilities (net of business acquisition) |                             
|Accounts receivable                                             |                             
|Prepaid expenses and other assets                               |                             
|Accounts payable and accrued expenses                           |                             
|                                                                |                             
|Net cash provided by operating activities                       |                             
|                                                                |                             
|Net cash flows from investing activities:                       |                             
|Purchase of subsidiary, net of cash acquired                    |                             
|Purchase of property and equipment                              |                             
|                                                                |                             
|Net cash flows used in investing activities                     |                             
|                                                                |                             
|Net cash used in financing activities:                          |                             
|Borrowings on notes payable                                     |                             
|Principal payments on notes payable                             |                             
|Principal payments under capital lease obligation               |                             
|Costs related to registration statement                         |                             
|Proceeds from exercise of stock options                         |                             
|Costs related to financing purchase of subsidiary               |                             
|                                                                |                             
|Net cash provided by (used in) financing activities             |                             
|                                                                |                             
|Net increase (decrease) in cash                                 |                             
|                                                                |                             
|Cash and cash equivalents, beginning of period                  |                             
|                                                                |                             
|Cash and cash equivalents, end of period                        |                             
|                                                                |                             
|Supplementary information:                                      |                             
|Liabilities incurred but not yet paid relating to               |                             
|registration statement                                          |                             
|iSYS Promissory Note not yet paid relating to acquisition       |                             
|Cash paid for interest                                          |                             
|                                                                |                             

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

3

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WIDEPOINT CORPORATION
AND SUBSIDIARIES

# NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

|1. | Basis
of Presentation, Organization and Nature ofOperations
|-- | -----------------------------------------------------------

The consolidated balance sheet as of
March 31, 2008, the condensed consolidated statements of operations for the three months
ended March 31, 2008 and 2007, and the condensed consolidated statements of cash flows for
the three months ended March 31, 2008 and 2007 have been prepared by the Company and are
unaudited. The consolidated balance sheet as of December 31, 2007 was derived from the
audited consolidated financial statements included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2007.

The unaudited condensed consolidated
financial statements included herein have been prepared by the Company, pursuant to the
rules and regulations of the Securities and Exchange Commission (the SEC).
Pursuant to such regulations, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is the opinion of management that all
adjustments (which include normal recurring adjustments) necessary for a fair statement of
financial results are reflected in the interim periods presented. Accordingly, these
condensed consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2007. The results of operations for
the three months ended March 31, 2008 are not indicative of the operating results for the
full year.

WidePoint Corporation
(WidePoint or the Company) is a leading provider of advanced
information technology products and services including identity management and information
assurance services, forensic informatics and wireless technology services. WidePoint has
three operational entities, Operational Research Consultants, Inc. (ORC), iSYS, LLC
(iSYS), and WidePoint Ill, Inc. WidePoint enables organizations to deploy fully compliant
IT services in accordance with government-mandated regulations and advanced system
requirements. In January 2008, we completed the acquisition of iSYS. iSYS specializes
in mobile telecommunications expense management services and forensic informatics, and
information assurance services predominately to the United States Government.

WidePoint was incorporated in
Delaware on May 30, 1997. Our staff consists of business and computer specialists who help
our government and civilian customers augment and expand their resident technologic skills
and competencies, drive technical innovation, and help develop and maintain a competitive
edge in todays rapidly changing technological environment in business. Our
organization emphasizes an intense commitment to our people, our customers, and the
quality of our solutions offerings. As a services organization, our customers are our
primary focus. We have developed thorough, comprehensive policies, procedures and controls
to mitigate the threat, or potential threat, of intentional, unintentional, physical,
natural or electronic compromise or disruption of any portion of our systems or services.
The talent and technology are available, and the resident expertise is well-versed in
working together, to ensure goals are achieved quickly and seamlessly. Contract agreements
are already in place and a substantive reference base with an assortment of federal
agencies is available.

ORC specializes in IT integration and
secure authentication processes and software, and providing services to the United States
Government. ORC has been at the forefront of implementing Public Key Infrastructure (PKI)
technologies. PKI technology uses a class of algorithms in which a user can receive two
electronic keys, consisting of a public key and a private key, to encrypt any information
and/or communication being transmitted to or from the user within a computer network and
between different computer networks. PKI technology is rapidly becoming the technology of
choice to enable security services within and between different computer systems utilized
by various agencies and departments of the U.S. Government.

We intend to continue to market and
sell our technical capabilities into the governmental and commercial marketplace. Further,
we are continuing to actively search out new synergistic acquisitions that we believe may
further enhance our present base of business and service offerings, which has already been
augmented by our acquisition of ORC and iSYS and our internal growth initiatives.

4

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The Company has physical locations in
Oakbrook Terrace, Illinois; Fairfax, Virginia; McLean, Virginia; Alexandria, Virginia;
Chesapeake, Virginia; and Columbus, Ohio. The Companys employees work at various
client locations throughout the upper Midwest and Mid Atlantic areas of the United States.

|2. | Significant
Accounting Policies
|-- | -------------------------------

Principles of
Consolidation

The accompanying condensed
consolidated financial statements include the accounts of acquired entities since their
respective dates of acquisition. All significant inter-company amounts have been
eliminated in consolidation.

Use of Estimates

The preparation of consolidated
financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.

Reclassifications

Certain amounts in prior year
financial statements have been reclassified to conform with the current year presentation.

Cash and Cash Equivalents

Investments purchased with original
maturities of three months or less are considered cash equivalents for purposes of these
consolidated financial statements. The Company maintains cash and cash equivalents with
various major financial institutions. Included in the March 31, 2008 cash balances was
$2,088,701 in interest bearing balances in one bank, mostly in excess of federally insured
amounts, as compared to $1,592,228 in interest bearing balances in one bank for December
31, 2007. The Company places its temporary cash investments with high credit-quality
financial institutions, and as a result, the Company believes that no significant credit
risk exists with respect to these cash investments.

Accounts Receivable

The majority of the Companys
accounts receivable are due from either United States governmental agencies or established
companies in the following industries: manufacturing, healthcare, financial services and
United States Federal government contractors. Credit is extended based on evaluation of a
customers financial condition and, generally, collateral is not required. Accounts
receivable are due within 30 to 60 days and are stated at amounts due from customers net
of an allowance for doubtful accounts if deemed necessary. Customer account balances
outstanding longer than the contractual payment terms are reviewed for collectability and
after 90 days are considered past due.

The Company determines its allowance
by considering a number of factors, including the length of time trade accounts receivable
are past due, the Companys previous loss history, the customers current
ability to pay its obligation to the Company, and the condition of the general economy and
the industry as a whole. The Company writes off accounts receivable when they become
uncollectible, and payments subsequently received on such receivables are credited to the
allowance for doubtful accounts.

The Company has not historically
maintained a bad debt reserve for our federal government or commercial customers as we
have not witnessed any material or recurring bad debt charges and the nature and size of the
contracts has not necessitated such bad debt reserve.

Unbilled accounts receivable on
time-and-materials contracts represent costs incurred and gross profit recognized near the
period-end but not billed until the following period. Unbilled accounts receivable on
fixed-price contracts consist of amounts incurred that are not yet billable under contract
terms. At March 31, 2008 and December 31, 2007, unbilled accounts receivable totaled
$1,158,513 and $371,435, respectively.

5

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Revenue Recognition

The majority of the Companys
revenues are derived from cost-plus, or time-and-materials contracts. Under cost-plus
contracts, revenues are recognized as costs are incurred and include an estimate of
applicable fees earned. For time-and-material contracts, revenues are computed by
multiplying the number of direct labor-hours expended in the performance of the contract
by the contract billing rates and adding other billable direct costs. In the event of a
termination of a contract, all billed and unbilled amounts associated with those task
orders where work has been performed would be billed and collected. The termination
provisions of the contract would be accounted for at the time of termination. Any deferred
and/or amortization cost would either be billed or expensed depending upon the termination
provisions of the contract. Further, the Company has had no material history of losses nor
has it identified any material specific risk of loss at March 31, 2008 or on December 31,
2007 due to termination provisions and thus has not recorded provisions for such events.

The Companys other revenues are
derived from the delivery of non-customized software. In such cases revenue is recognized
when there is persuasive evidence that an arrangement exists (generally a purchase order
has been received or contract signed), delivery has occurred, the charge for the software
is fixed or determinable, and collectibility is probable.

Revenue from our mobile telecom
expense management services (MTEMS) is recognized upon delivery of services
as they are rendered. Arrangements with customers on MTEMS related contracts are
recognized ratably over a period of performance.

Revenue from the sale of PKI
credentials is recognized when delivery occurs. Arrangements with customers on PKI related
contracts may involve multiple deliverable elements. In these cases, the Company applies
the principles prescribed in Emerging Issues Task Force Abstract (EITF) 00-21
Revenue Arrangements with Multiple Deliverables. The Company analyzes various factors,
including a review of the nature of the contract or product sold, the terms of each
specific transaction, the relative fair values of the elements required by EITF 00-21, any
contingencies that may be present, its historical experience with like transactions or
with like products, the creditworthiness of the customer, and other current market and
economic conditions.

Should the sale of product or
software involve an arrangement with multiple elements (for example, the sale of PKI
Credential Seats along with the sale of maintenance, hosting and support to be delivered
over the contract period), the Company allocates revenue to each component of the
arrangement using the residual value method based on the fair value of the undelivered
elements. The Company defers revenue from the arrangement equivalent to the fair value of
the undelivered elements and recognizes the remaining amount at the time of the delivery
of the product or when all other revenue recognition criteria have been met.

Significant Customers

For the quarter ended March 31,
2008, three customers, the Transportation Security Administration (TSA), the Department
of Homeland Security (DHS), and the Washington Headquarters Services (WHS), an agency
of the Department of Defense (DoD) that provides services for many DoD agencies and
organizations, represented approximately 27%, 21%, and 16% of revenues, respectively.
 Due to the nature of our business and the relative size of certain contracts, which are
entered into in the ordinary course of business, the loss of any single significant
customer could have a material adverse effect on results.  For the quarter ended March
31, 2007, one customer, the Defense Information Security Agency (DISA), represented
approximately 24% of revenues.

Fair value of financial
instruments

The Companys financial
instruments include cash equivalents, accounts receivable, accounts payable, short-term
debt, long-term debt, and capital leases. The carrying values of cash equivalents,
accounts receivable and accounts payable approximate their fair value because of the
short maturity of these instruments. The carrying amounts of the Companys capital
leases and bank borrowings under its credit facility approximate fair value because the
interest rates are reset periodically to reflect current market rates.

6

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Concentrations of Credit
Risk

Financial instruments potentially
subject the Company to credit risk, which consist of cash and cash equivalents and
accounts receivable. As of March 31, 2008, three customers, DHS, WHS, and TSA, accounted
for approximately 34%, 14%, and 14% of accounts receivable, respectively. As of December
31, 2007, two clients, Headquarters Cryptologic Systems Group (HQ CPSG) and United Space
Alliance, represented 24% and 14% of accounts receivable, respectively.

Income Taxes

The Company accounts for income taxes
in accordance with Statement of Financial Accounting Standards (SFAS)
No. 109, Accounting for Income Taxes. Under SFAS No.109, deferred tax
assets and liabilities are computed based on the difference between the financial
statement and income tax bases of assets and liabilities using the enacted marginal tax
rate. SFAS No. 109 requires that the net deferred tax asset be reduced by a valuation
allowance if, based on the weight of available evidence, it is more likely than not that
some portion or all of the net deferred tax asset will not be realized. The Company has
also adopted the provisions of Interpretation No. 48 (FIN 48), Accounting for
Uncertainty in Income Taxes  An interpretation of FASB Statement No. 109.

Property and Equipment

Property and equipment are stated at
cost, net of accumulated depreciation and amortization. Property and equipment consisted
of the following:

|                                                | March 31, | December 31,
|----------------------------------------------- | --------- | ------------
|                                                |           |             
|
|                                                |           |             
|Automobiles, computers, equipment and software  |           |             
|Less- Accumulated depreciation and amortization |           |             
|                                                |           |             
|                                                |           |             
|                                                |           |             

Depreciation expense is computed
using the straight-line method over the estimated useful lives of between two and five
years depending upon the classification of the property and/or equipment.

In accordance with the American
Institute of Certified Public Accountants Statement of Position 98-1 Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use, the Company
capitalizes costs related to software and implementation in connection with its internal
use software systems.

Software Development Costs

WidePoint accounts for software
development costs related to software products for sale, lease or otherwise marketed in
accordance with SFAS No. 86, Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed. For projects fully funded by the Company,
significant development costs are capitalized from the point of demonstrated technological
feasibility until the point in time that the product is available for general release to
customers. Once the product is available for general release, capitalized costs are
amortized based on units sold, or on a straight-line basis over a six-year period or other
such shorter period as may be required. WidePoint recorded approximately $14,000 of
amortization expense for PKI-I and $31,000 for PKI-II for the three month period ended
March 31, 2008. WidePoint recorded approximately $183,000 of amortization expense for
PKI-I and PKI-II for the year ended December 31, 2007. Capitalized software costs, net,
included in Other Intangibles at March 31, 2008 and December 31, 2007 were approximately
$0.7 million and $0.7 million, respectively. The Company also initiated PKI-III to attain
an Authority to Operate (ATO) under the guidelines associated with our ACES
certificates. WidePoint recorded no accumulated costs for the three month period ended
March 31, 2008. We estimate that we will record another approximately $10,000 prior to
issuance of the ATO during the second quarter of 2008 at which time we will commence
amortizing the ATO over an approximate three year life.

7

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Goodwill, Other
Intangible Assets, and Long-Lived Assets

Goodwill represents costs in excess
of fair values assigned to the underlying net assets acquired. The Company has adopted the
provisions of SFAS No. 141, Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. These standards require the use
of the purchase method of accounting for business combinations, set forth the accounting
for the initial recognition of acquired intangible assets and goodwill and describe the
accounting for intangible assets and goodwill subsequent to initial recognition. Under the
provisions of these standards, goodwill is not subject to amortization and annual review
is required for impairment. The impairment test under SFAS No. 142 is based on a two-step
process involving (i) comparing the estimated fair value of the related reporting unit to
its net book value and (ii) comparing the estimated implied fair value of goodwill to its
carrying value. Impairment losses are recognized whenever the implied fair value of
goodwill is less than its carrying value. The Companys annual impairment testing
date is December 31.

The Company recognizes an acquired
intangible apart from goodwill whenever the intangible arises from contractual or other
legal rights, or when it can be separated or divided from the acquired entity and sold,
transferred, licensed, rented or exchanged, either individually or in combination with a
related contract, asset or liability. Such intangibles are amortized over their useful
lives. Impairment losses are recognized if the carrying amount of an intangible subject to
amortization is not recoverable from expected future cash flows and its carrying amount
exceeds its fair value.

The Company reviews its long-lived
assets, including property and equipment, identifiable intangibles, and goodwill annually
or whenever events or changes in circumstances indicate that the carrying amount of the
assets may not be fully recoverable. To determine recoverability of its long-lived assets,
the Company evaluates the probability that future undiscounted net cash flows will be less
than the carrying amount of the assets.

Basic and Diluted Net
Earnings (Loss) Per Share

Basic earnings or loss per share
includes no dilution and is computed by dividing net earnings or loss by the
weighted-average number of common shares outstanding for the period. Diluted earnings or
loss per share includes the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
Outstanding options and warrants to purchase 8,014,257 and 7,088,257 shares,
respectively, for the quarters ended March 31, 2008 and 2007 have not been included in the
calculation of the net loss per share as such effect would have been anti-dilutive. As a
result of these items, the basic and diluted net loss per share for the quarters
ending March 31, 2008 and 2007, respectively, are presented as identical.

Stock-based compensation

In December 2004, the Financial
Accounting Standards Board issued SFAS No. 123 (revised 2004), Share-Based
Payment, (SFAS No. 123R). This statement requires that the costs of
employee share-based payments be measured at fair value on the awards grant date and
recognized in the financial statements over the requisite service period.

Effective January 1, 2006, the
Company adopted the provisions of SFAS No. 123R using the modified prospective application
transition method. Under this method, compensation cost for the portion of awards for
which the requisite service has not yet been rendered that are outstanding as of the
adoption date is recognized over the remaining service period. The compensation cost for
that portion of awards is based on the grant-date fair value of those awards as calculated
for pro forma disclosures under SFAS No. 123, as originally issued. All new awards that
are modified, repurchased, or cancelled after the adoption date are accounted for under
provisions of SFAS No. 123R. Prior periods have not been restated under this transition
method. The Company recognizes share-based compensation ratably using the straight-line
attribution method over the requisite service period. In addition, pursuant to SFAS No.
123R, the Company is required to estimate the amount of expected forfeitures when
calculating share-based compensation, instead of accounting for forfeitures as they occur,
which was the Companys practice prior to the adoption of SFAS 123R. As of January 1,
2006, the cumulative effect of adopting the estimated forfeiture method was not material.

The amount of compensation expense
recognized under SFAS 123(R) during the three month periods ended March 31, 2008 and 2007,
respectively, under our plans was comprised of the following:

8

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|                                               
|-----------------------------------------------
|2008                                           
|General and administrative expense             
|Share-based compensation before taxes          
|Share-based compensation expense               
|Net share-based compensation expenses per basic
|and diluted common share                       

Since we have cumulative operating
losses as of March 31, 2008 for which a valuation allowance has been established, we
recorded no income tax benefits for share-based compensation arrangements. 
Additionally, no incremental tax benefits were recognized from stock options exercised
during the quarter ended March 31, 2008, which would have resulted in a reclassification
to reduce net cash provided by operating activities with an offsetting increase in net
cash provided by financing activities.

The fair value of each option award
is estimated on the date of grant using a Black-Scholes option pricing model
(Black-Scholes model) that uses the assumptions of no dividend yield, risk
free interest rates of between 2.61% and 4.83%, volatility of between 156% to 57%, and
expected life in years of approximately 4 years. Expected volatilities are based on the
historical volatility of our common stock. The expected term of options granted is based
on analyses of historical employee termination rates and option exercises. The risk-free
interest rates are based on the U.S. Treasury yield for a period consistent with the
expected term of the option in effect at the time of the grant.  Share-based
compensation expense recognized during the period is based on the value of the portion of
share-based payment awards that is ultimately expected to vest during the period. 
The estimated forfeiture rates are based on analyses of historical data, taking into
account patterns of involuntary termination and other factors.  A summary of the
option activity under our plans during the three month periods ended March 31, 2008 and
2007 is presented below:

|                             
|-----------------------------
|OUTSTANDING AND NON -VESTED  
|Non-vested at January 1, 2008
|Granted                      
|Vested                       
|Forfeited                    
|Non-vested at March 31, 2008 

9

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|                                     |  |  |  |           |  |  |       | 
|------------------------------------ |  |  |  | --------- |  |  | ----- | 
|Non-vested at January 1, 2007        |  |  |  | 753,477   |  |  | $0.67 | 
|Granted                              |  |  |  | --        |  |  | --    | 
|Vested                               |  |  |  | 323,183   |  |  | $0.58 | 
|Forfeited                            |  |  |  | 29,250    |  |  | $0.43 | 
|Non-vested at March 31, 2007         |  |  |  | 401,044   |  |  | $0.76 | 
|OUTSTANDING AND EXERCISABLE          |  | 
|Total outstanding at January 1, 2008 |  |  |  | 7,085,211 |  |  | $0.37 | 
|Issued                               |  |  |  | 870,000   |  |  | $0.90 | 
|Cancelled                            |  |  |  | --        |  |  | --    | 
|Exercised                            |  |  |  | 32,000    |  |  | $0.45 | 
|Total outstanding at March 31, 2008  |  |  |  | 7,923,211 |  |  | $0.42 | 
|Total exercisable at March 31, 2008  |  |  |  | 6,653,211 |  |  | $0.32 | 
|Total outstanding at January 1, 2007 |  |  |  | 7,103,261 |  |  | $0.36 | 
|Issued                               |  |  |  | --        |  |  | --    | 
|Cancelled                            |  |  |  | 30,250    |  |  | $0.48 | 
|Exercised                            |  |  |  | 75,800    |  |  | $0.34 | 
|Total outstanding at March 31, 2007  |  |  |  | 6,997,211 |  |  | $0.36 | 
|Total exercisable at March 31, 2007  |  |  |  | 6,596,167 |  |  | $0.32 | 

The aggregate remaining contractual
lives in years for the options outstanding and exercisable on March 31, 2008 were 3.52 and
2.84, respectively.

Aggregate intrinsic value represents
total pretax intrinsic value (the difference between WidePoints closing stock price
March 31, 2008 and the exercise price, multiplied by the number of in-the-money options)
that would have been received by the option holders had all option holders exercised their
options on March 31, 2008. This amount changes based on the fair market value of
WidePoints stock. The total intrinsic value of options outstanding as of March 31,
2008 was $6,808,401. The total intrinsic value of options exercisable on March 31, 2008
was $6,405,561. The total intrinsic value of options exercised for the first quarter of
fiscal 2008 was $29,120. The Company issues new shares of common stock upon the exercise
of stock options.

At March 31, 2008, 6,246,138 shares
were available for future grants under the Companys 1997 Stock Compensation Plans.
This includes options for 1,080,150 shares previously exercised through March 31, 2008,
under the Companys 1997 Stock Compensation Plans. This does not include 3,999,999
warrants granted and vested to members of the senior management team that were not issued
under the Companys 1997 Stock Compensation Plans.

At March 31, 2008, the Company had
approximately $562,000 of total unamortized compensation expense, net of estimated
forfeitures, related to stock option plans that will be recognized over the weighted
average period of 3.52 years.

Recent Accounting
Pronouncements

SFAS 157. In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 157,Fair Value
Measurements (SFAS 157), which defines fair value, establishes a framework
for measuring fair value under generally accepted accounting principles and expands
disclosures about fair value measurements. SFAS 157 applies to other existing accounting
pronouncements that require or permit fair value measurements, the FASB having previously
concluded in those accounting pronouncements that fair value is the relevant measurement
attribute. While SFAS 157 does not require any new fair value measurements, its
application may change the current practice for fair value measurements. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. On February 8,
2008, the FASB issued FSP FAS 157-2,Effective Date of FASB Statement
No. 157 , which delays the effective date of SFAS 157 for nonfinancial
assets and liabilities to fiscal years beginning after November 15, 2008. The
adoption of SFAS 157 for financial assets and liabilities in the first quarter of 2008 had
no impact on our consolidated financial statements. We are currently evaluating the impact
of SFAS 157 for non-financial assets and liabilities.

10

---

SFAS 159 In February 2007, the
FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities(SFAS 159) which permits entities to choose to
measure many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. SFAS 159 will be effective for the
Companys current fiscal year ending December 31, 2008. We do not believe the
adoption of this statement will have an impact on the Companys consolidated
financial position, results of operations or cash flows.

In December 2007, the FASB issued
SFAS No. 141(R), Business Combinations(FAS 141(R)), to
replace FAS 141, Business Combinations. FAS 141(R) requires use of the
acquisition method of accounting, defines the acquirer, establishes the acquisition date
and broadens the scope to all transactions and other events in which one entity obtains
control over one or more other businesses. This statement is effective for financial
statements issued for fiscal years beginning on or after December 15, 2008 with earlier
adoption prohibited. While the Company does not expect that the adoption of FAS 141(R) to
have a material impact to its consolidated financial statements for transactions completed
prior to December 31, 2008, the impact of the accounting change could be material for
business combinations which may be consummated subsequent thereto.

In December 2007, the FASB issued
Statement of FAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51, (FAS 160). FAS 160
establishes accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the retained interest and gain or loss when a subsidiary is
deconsolidated. This statement is effective for financial statements issued for fiscal
years beginning on or after December 15, 2008 with earlier adoption prohibited. The
Company currently does not have any noncontrolling interests or deconsolidated
subsidiaries and therefore FAS 160 will not have any impact on its consolidated financial
statements.

11

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|3. | Debt
|-- | ----

On January 2, 2008, WidePoint
Corporation (the Company) entered into a Commercial Loan Agreement with
Cardinal Bank relating to a $5,000,000 revolving credit facility and a $2,000,000 term
loan. Advances under the revolving credit facility bear interest at a variable rate equal
to the prime rate plus 0.25% with such variable rate dropping to the prime rate or the
prime rate minus 0.25% depending upon the Company meeting certain performance conditions,
with the repayment date for such facility being April 30, 2009. This new revolving credit
facility replaces the Companys prior $2,000,000 revolving credit facility with
Cardinal Bank. The term loan bears interest at 7.5% annually and the repayment date of
such term loan is January 1, 2012.

|4. | Goodwill and Intangible Assets
|-- | ------------------------------

Effective January 1, 2002, WidePoint
adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 142 requires,
among other things, the discontinuance of goodwill amortization. Under SFAS 142, goodwill
is to be reviewed at least annually for impairment; the Company has elected to perform
this review annually on December 31st of each calendar year. These reviews have
resulted in no adjustments in goodwill.

In January 2008,  WidePoint
 completed the acquisition of iSYS, LLC.  (iSYS).  The purchase price  allocation for
the  Companys  acquisition  of iSYS at this time is still  preliminary  and subject to
final  adjustments. The Company has engaged a consultant  to assist it in its final
 purchase  price  allocation.  During the first quarter the Company  determined  that the
minimum  requirement of $2 million  dollars in working  capital as of December  31,  2007
was met and that an  excess  of  approximately  $143,000  in  working  capital  existed
 as determined  by an audit  performed  on iSYS  during the first  quarter.  The  excess
 working  capital  will be adjusted  against  purchase price.  During 2004,  WidePoint
 completed the acquisition of Operational  Research Consultants,  Inc.  (ORC).  The
Company also has capitalized  software  development costs associated with its PKI
 initiative,  established  and/or has estimated the purchase  price  allocation of the
assets  acquired and allocated the purchase price of the components and software
 capitalization  of goodwill and other  intangibles as follows:

|                           
|---------------------------
|Amortized Intangible Assets
|Gross Carrying
Amount      
|                           
|(1)                        
|                           
|                           
|                           
|                           
|                           
|(2)                        
|                           
|                           
|                           
|(3)                        
|                           
|                           
|                           
|(4)                        
|                           
|                           
|                           
|(5)                        
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           

12

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|(1) | The
ORC intangible is made up of the purchase accounting associated with the
                    valuation assigned by the Company to ORCs customer
relationships and PKI                     business opportunity. The PKI business
opportunity intangible has an estimated                     life of 6 years and ORCs
customer relationships have an estimated life of                     5 years. The PKI
business opportunity was estimated based upon the contractual                     life
assigned to the authority to issue PKI certificates by the federal
                    government. The fair value of the PKI business opportunity was
estimated using                     the expected present value of future cash flows
estimated by the Company for                     ORCs PKI business opportunity. ORCs
customer relationship intangible                     was estimated based upon an analysis
of the historic life of ORCs present                     customer relationships and
their present contract opportunities. A fair value                     was estimated
using the expected present value of the estimated future cash                     flows
generated from those relationships. The weighted average life of this
                    intangible asset class is 3.5 years.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
PKI-I intangible is related to internally generated software that was
                    associated with ORCs PKI-I development of its phase 1 software
offerings.                     ORC commenced sales of its PKI-I service in August of
2004. It has a weighted                     average life of 3.5 years and is based upon
the contractual life assigned to the                     authority to issue PKI
certificates by the federal government.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The
PKI-II intangible is related to a secondary PKI software development effort
                    by ORC. ORC commenced sales of its PKI-II service in August of 2005.
It has a                     weighted average life of 3.5 years and is based upon the
contractual life                     assigned to the authority to issue PKI certificates
by the federal government.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The
PKI-III intangible is related to an additional PKI software development by
                    ORC to attain an Authority To Operate (ATO) under the
guidelines                     associated with ACES certificates that will be issued
under a General Service                     Administration (GSA)
credential program. It is estimated that we                     will accumulate
approximately $110,000 in cost through the 1st                    quarter of
2008 prior to the issuance by the GSA of an ATO to ORC allowing them
                    to issue ACES certificates for a 3 year period. Upon issuance of the
ATO, ORC                     will amortize the accumulated costs over a weighted average
life of 3 years to                     operate under the new ATO to issue ACES
Certificates. No estimated future                     amortization expense has been
determined for PKI-III.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The
iSYS intangible is made up of the preliminary estimated purchase accounting
                    allocations associated with the valuation assigned by the Company to
iSYSs                     customer relationships and mobile telecom expense
management                     (MTEM) software. The MTEM software
intangible has an estimated                     life of 5 years and iSYSs customer
relationships have an estimated life of                     5 years. The MTEM software
was estimated based upon a preliminary estimate                     attributed to the
most recent life attributable to the contractual life assigned                     by
iSYS most recent contract awards and terms. The preliminary estimated fair
                    value of the MTEM software was estimated using the expected present
value of                     future cash flows estimated by the Company for iSYSs
software. iSYSs                     customer relationship intangible was estimated
based upon an analysis of the                     historic life of iSYSs present
customer relationships and their present                     contract opportunities. A
preliminary fair value was estimated using the                     expected present value
of the estimated future cash flows generated from those
                    relationships. The weighted average life of this intangible asset
class is 5.0                     years. The Company has commenced an independent analysis
to determine the                     appropriate valuation of the intangibles and both
the estimated life and value                     may change upon the completion of such
independent analysis.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The total weighted average life of
all of the intangibles is approximately 3.5 years.

There were no amounts of research and
development assets acquired during the quarter ended March 31, 2008 nor any written-off in
the period.

The changes in the carrying amount of
goodwill for the quarter ended March 31, 2008 and 2007 are as follows:

|                              | Total           
|----------------------------- | ----------------
|Balance as of January 1, 2007 | $2,526,110      
|Goodwill adjusted             | $             --
|Balance as of March 31, 2007  | $2,526,110      
|Balance as of January 1, 2008 | $2,526,110      
|Goodwill acquired             | $4,831,142      
|Balance as of March 31, 2008  | $7,357,252      

13

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The goodwill acquired is associated
with the acquisition of iSYS in January of 2008. No impairment was required as of March
31, 2008.

|5. | Income
Taxes
|-- | ------------

The Company accounts for income taxes
in accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS
No.109, deferred tax assets and liabilities are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the enacted
marginal tax rate. SFAS No. 109 requires that the net deferred tax asset be reduced
by a valuation allowance if, based on the weight of available evidence, it is more likely
than not that some portion or all of the net deferred tax asset will not be realized. The
Company has further adopted the provisions of Interpretation No. 48 (FIN 48),
Accounting for Uncertainty in Income Taxes  An interpretation of FASB
Statement No. 109. As required by FIN 48, the Company recognizes the financial statement
benefit of a tax position only after determining that the relevant tax authority would
more likely than not sustain the position following an audit. For tax positions meeting
the more-likely-than-not threshold, the amount recognized in the financial statements is
the largest benefit that has a greater than 50 percent likelihood of being realized upon
ultimate settlement with the relevant tax authority.

The Company has determined that its
net deferred tax asset did not satisfy the recognition criteria set forth in SFAS
No. 109 and, accordingly, established a valuation allowance for 100 percent of
the net deferred tax asset, less the deferred liability related to the Section 481(a)
adjustment.

As of March 31, 2008, the
Company had net operating loss carry forwards of approximately $20 million to offset
future taxable income. These carry forwards expire between 2010 and 2027. Under the
provisions of the Tax Reform Act of 1986, when there has been a change in an entitys
ownership of 50 percent or greater, utilization of net operating loss carry forwards
may be limited. As a result of WidePoints equity transactions, the Companys
net operating losses will be subject to such limitations and may not be available to
offset future income for tax purposes. The Company adopted FIN 48 as of January 1, 2007.
The adoption of FIN 48 has not had an impact on the Companys financial position or
results of operations for the three months ended March 31, 2007 and 2008. The Company has
no unrecognized tax benefit, as described in FIN 48, as of March 31, 2008 and our tax
position has not materially changed since December 31, 2007.

|6. | Stockholders Equity
|-- | --------------------

The Company is authorized to issue
110,000,000 shares of common stock, $.001 par value per share. During the quarter ended
March 31, 2008, 32,000 shares of common stock were issued as the result of the exercise of
employee stock options. As of March 31, 2008, there were 54,090,697 shares of common stock
outstanding.

Common Stock

Pursuant to the terms of a Membership
Interest Purchase Agreement, dated January 2, 2008, between the Company, iSYS, LLC and Jin Kang, the Company issued
1,500,000 shares of Company common stock at a stock price of $1.20 per common share of
WidePoint Corporation for a value of $1,800,000. The Company also issued an additional
3,000,000 shares of Company common stock, which shares were delivered into escrow to be
held subject to the satisfaction of certain earnout provisions under the Membership
Interest Purchase Agreement, and which shares are subject to return to the Company in the
event such earnout provisions are not achieved under the terms of the Membership Interest
Purchase Agreement. Under the Membership Interest Purchase Agreement the initial $1.4
million in earnings before interest, taxes, depreciation and amortization
(EBITDA) from iSYS is excluded from the earnout for the initial 3 years with
66% of the value in excess of the initial $1.4 million being paid to the former owner of
iSYS with 50% of the amount being paid in cash and 50% being valued and released in escrow
shares. In the 4th year the value in excess of 50% is used instead of 66% with
the total earnout capped at $6 million, with $ 3 million payable in cash and $3 million
payable in the release of earnout shares. Performance of the earnout is measured annually
and awarded within 30 days following the end of the Companys fiscal period and
filing of the Companys Form 10-K. The value of the 1,500,000 unregistered common
stock issued was $1,800,000 and was determined based on the closing market price of the
Companys common shares on January 8, 2008 of $1.20 per common share.

14

---

Stock Warrants

On November 1, 2005, the Company
issued a warrant to purchase 54,878 shares of common stock at a price of $0.80 per share
to Hawk Associates as part of a consulting agreement in which Hawk Associates agreed to
act as the Companys investor relations representative. The warrant has a term of 5
years. We are accounting for this award in accordance with EITF 96-18.

On October 27, 2004 and November 22,
2004, the Company issued two warrants to purchase 30,612 shares and 5,556 shares of common
stock at a price of $0.49 and $0.45 per share, respectively, to Liberty Capitol as part of
a consulting agreement in which Liberty Capitol assisted the Company in arranging its
senior debt financing with RBC-Centura Bank. The warrants have a term of 5 years. The
Company used a fair-value option pricing model to value these stock warrants at
approximately $14,291. This value has been reflected as part of stock warrants in the
stockholders equity section of the consolidated balance sheet.

|7. | Segment
reporting
|-- | -----------------

Segments are defined by SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, as
components of a company in which separate financial information is available and is
evaluated by the chief operating decision maker, or a decision making group, in deciding
how to allocate resources and in assessing performance.

During 1998, the Company adopted SFAS
No. 131 and until December 31, 2005 the Company was comprised of a single segment, which
was comprised of our consulting services segment within our Commercial and Federal
Government Marketplaces. As of January 1, 2006, the Company added a second segment, which
consists of PKI credentialing and managed services. As of January 4, 2008, the Company
added a third segment upon the acquisition of iSYS, LLC for mobile telecom expense
management.

Segment operating income consists of
the revenues generated by a segment, less the direct costs of revenue and selling, general
and administrative costs that are incurred directly by the segment. Unallocated corporate
costs include costs related to administrative functions that are performed in a
centralized manner that are not attributable to a particular segment. These administrative
function costs include costs for corporate office support, all office facility costs,
costs relating to accounting and finance, human resources, legal, marketing, information
technology and company-wide business development functions, as well as costs related to
overall corporate management.

The following table presents
information about reported segments along with the items necessary to reconcile the
segment information to the totals reported in the accompanying consolidated financial
statements:

15

---

|                                                                                    | Three Months EndedMarch 31,
|----------------------------------------------------------------------------------- | ---------------------------
|
|Consulting services:                                                                |                            
|Revenues                                                                            |                            
|Operating income                                                                    |                            
|Total assets                                                                        |                            
|Mobile Telecom Managed Services:                                                    |                            
|Revenues                                                                            |                            
|Operating income                                                                    |                            
|Total assets                                                                        |                            
|PKI Credentialing and Managed Services:                                             |                            
|Revenues                                                                            |                            
|Operating loss (includes amortization expense of $45,838 and $45,838, respectively) |                            
|Total assets                                                                        |                            
|Total Company                                                                       |                            
|Revenues                                                                            |                            
|Operating loss before depreciation expense                                          |                            
|Depreciation expense                                                                |                            
|Interest income (expense), net                                                      |                            
|Net loss                                                                            |                            
|Total Corporate assets                                                              |                            

|(1)              Includes
$55,269 in amortization expense in cost of sales associated with the           purchase
of ORC and $100,000 in amortization expense in cost of sales associated           with
the purchase of iSYS, which are not allocated among the segments and           includes
$562,690 in unallocated corporate costs in general and administrative           expense
of which $371,702 is comprised of stock options expense.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2)              Includes
$55,270 in amortization expense in cost of sales associated with the           purchase
of ORC, which is not allocated among the segments and includes $257,054           in
unallocated corporate costs in general and administrative expense.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

---

|8. | Litigation
|-- | ----------

The Company is not involved in any
material legal proceedings.

|9. | iSYS
Acquisition
|-- | ----------------

Pursuant to the terms of the
 Membership  Interest  Purchase  Agreement, dated January 2, 2008, the Company  paid the  following
consideration at the closing:  (i) $5,000,000 in cash, (ii) $2,000,000  principal amount
in an Installment Cash Promissory  Note,  which bears simple annual interest at the
initial rate of 7% through  December 31, 2008, and  thereafter the simple  interest rate
will increase to 10% from January 1, 2009 through the date of  maturity,  which will be
on the  earlier of either  April 1, 2009 or the filing by the  Company of its Annual
 Report on Form 10-K for the year ending  December  31,  2008,  and (iii) the issuance of
1,500,000 shares  of  Company  common  stock  issued  at a stock  price  of $1.20  per
 common  share  of  WidePoint Corporation for a value of $1,800,000.  The Company also
issued an additional  3,000,000 shares of Company common stock,  which shares were
delivered into escrow to be held subject to the  satisfaction  of certain earnout
 provisions  under the Membership  Interest  Purchase  Agreement,  and which shares are
subject to return to the  Company  in the event  such  earnout  provisions  are not
 achieved  under the terms of the Membership  Interest Purchase  Agreement.  The
aggregate purchase price was $9,046,132  including $102,722 of  acquisition  costs and
without  consideration  for the  contingent  issuance of the 3,000,000  earnout shares.
 The value of the 1,500,000  unregistered  common stock issued was  $1,800,000  and was
determined based on the closing  market price of the  Companys  common shares on January
8, 2008 of $1.20 per common share.

The Company has not yet finalized
the allocation of the purchase  price.  The following  table  summarizes the estimated
fair values of the assets  acquired and  liabilities  assumed based on the latest
 available information on iSYS, at March 31, 2008.  The allocation of the purchase price
was based upon  managements estimates and assumptions:

|                                   | iSYS
at March 31, 2008
|---------------------------------- | ----------------------
|Current assets                     |                       
|Property, plant and equipment, net |                       
|Intellectual property              |                       
|Goodwill                           |                       
|Other non current assets           |                       
|                                   |                       
|Total assets acquired              |                       
|                                   |                       
|                                   |                       
|                                   |                       
|Current liabilities                |                       
|                                   |                       
|Total liabilities assumed          |                       
|                                   |                       

The operations of iSYS will be
included in the Companys results of operations beginning on January 4, 2008, the
acquisition date. The factors resulting in goodwill were iSYSs name, reputation, and
established key personnel. None of the goodwill will be deductible for tax purposes.

The accompanying consolidated
pro forma information gives effect to the iSYS acquisition as if it had occurred on
January 1, 2007 and its results of operations were included in the quarters ended March 31,
2008 and 2007 for the full period. The pro forma information is included only for
purposes of illustration and does not necessarily indicate what the Companys operating
results would have been had the acquisition of iSYS been completed on January 1, 2007.

|                                    | Quarter Ended
March 31, 2008* | Quarter Ended
March 31, 2007
|----------------------------------- | ----------------------------- | ----------------------------
|Revenue                             |                               |                             
|                                    |                               |                             
|Net income                          |                               |                             
|                                    |                               |                             
|Income per share, basic and diluted |                               |                             

*Because the transaction occurred on
January 4, 2008, there was no difference from the actual amounts for the three months
ended March 31, 2008.

|10. | Subsequent
Events
|--- | -----------------

On April 29, 2008, the Company
entered into a Common Stock Purchase Agreement (Purchase Agreement) with
Deutsche Bank AG, London Branch, and related agreements, as part of a private equity
financing to raise additional funds for working capital. Under the Purchase Agreement,
Deutsche Bank AG agreed to purchase 2,500,000 shares of WidePoint common stock for a total
purchase price of $2,550,000, or $1.02 per share. Pursuant to the Purchase Agreement, the
Company issued 2,500,000 shares of its common stock to Deutsche Bank AG, London Branch on
May 2, 2008. The offer and sale of the shares were not registered under the Securities Act
of 1933, as amended, in reliance on the private offering exemption provided
under Section 4(2) thereof.

On May 16, 2008, the Company entered
into two Common Stock Purchase Agreements (collectively, the Endurance Purchase
Agreements) with Endurance Partners, L.P. and Endurance Partners (Q.P), L.P., and
related agreements, as part of a private equity financing to raise additional funds for
working capital. Under the Endurance Purchase Agreements, Endurance Partners, L.P. agreed
to purchase 428,954 shares of WidePoint common stock for a total purchase price of
$437,533.08, or $1.02 per share, and Endurance Partners (Q.P.), L.P. agreed to purchase
1,071,046 shares of WidePoint common stock for a total purchase price of $1,092,466.92, or
$1.02 per share. Pursuant to the Endurance Purchase Agreements, on May 19, 2008, the
Company issued 428,954 shares of its common stock to Endurance Partners, L.P. and
1,071,046 shares of its common stock to Endurance Partners (Q.P.), L.P. The offer and sale
of the shares were not registered under the Securities Act of 1933, as amended, in
reliance on the private offering exemption provided under Section 4(2)
thereof.

17

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

The following discussion and analysis
of the financial condition and results of operations of the Company should be read in
conjunction with the financial statements and the notes thereto which appear elsewhere in
this quarterly report and the Companys Annual Report on Form 10-K for the year ended
December 31, 2007.

The information set forth below
includes forward-looking statements. Certain factors that could cause results to differ
materially from those projected in the forward-looking statements are set forth below.
Readers are cautioned not to put undue reliance on forward-looking statements. The Company
disclaims any intent or obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or otherwise.

# Overview

WidePoint Corporation
(WidePoint or the Company) is a leading provider of advanced
information technology products and services including identity management and information
assurance services, forensic informatics and wireless technology services. WidePoint has
three operational entities, Operational Research Consultants, Inc. (ORC),
iSYS, LLC (iSYS), and WidePoint Ill, Inc. WidePoint enables organizations to
deploy fully compliant IT services in accordance with government-mandated regulations and
advanced system requirements. In January 2008, we completed the acquisition of iSYS.
iSYS specializes in mobile telecom expense management services and forensic informatics,
and information assurance services predominately to the United States Government.

WidePoint was incorporated in
Delaware on May 30, 1997. Our staff consists of business and computer specialists who help
our government and civilian customers augment and expand their resident technologic skills
and competencies, drive technical innovation, and help develop and maintain a competitive
edge in todays rapidly changing technological environment in business. Our
organization emphasizes an intense commitment to our people, our customers, and the
quality of our solutions offerings. As a services organization, our customers are our
primary focus. We have developed thorough, comprehensive policies, procedures and controls
to mitigate the threat, or potential threat, of intentional, unintentional, physical,
natural or electronic compromise or disruption of any portion of our systems or services.
The talent and technology are available, and the resident expertise is well-versed in
working together, to ensure goals are achieved quickly and seamlessly. Contract agreements
are already in place and a substantive reference base with an assortment of federal
agencies is available.

ORC specializes in IT integration and
secure authentication processes and software, and providing services to the United States
Government. ORC has been at the forefront of implementing Public Key Infrastructure (PKI)
technologies. PKI technology uses a class of algorithms in which a user can receive two
electronic keys, consisting of a public key and a private key, to encrypt any information
and/or communication being transmitted to or from the user within a computer network and
between different computer networks. PKI technology is rapidly becoming the technology of
choice to enable security services within and between different computer systems utilized
by various agencies and departments of the U.S. Government.

We intend to continue to market and
sell our technical capabilities into the governmental and commercial marketplace. Further,
we are continuing to actively search out new synergistic acquisitions that we believe may
further enhance our present base of business and service offerings, which has already been
augmented by our acquisition of ORC and iSYS and our internal growth initiatives.

With the addition of the customer
base and the increase in revenues attributable from both the iSYS and ORC acquisitions,
WidePoints opportunity to leverage and expand further into the federal marketplace
has improved dramatically. Both Companys past client successes, top security
clearances in their facilities and with their personnel, and additional breadth of
management talent have expanded the Companys reach into markets that previously were
not fully accessible to WidePoint. WidePoint intends to continue to leverage the synergies
between the newly acquired operating subsidiaries and cross sell those technical
capabilities into each separate marketplace serviced by its respective subsidiaries.
Further, WidePoint is continuing to actively search out new synergistic acquisitions that
we believe will further enhance the present base of business, which has already been
augmented by our recent acquisitions activity and internal growth initiatives.

18

---

WidePoints total revenues
increased by approximately $4.3 million from $2.9 million for the three months ended March
31, 2007 to $7.2 million for the three months ended March 31, 2008. The increase in
revenues during the three month period ending March 31, 2008 as compared to the same three
month period ending March 31, 2007 was primarily a result of the acquisition of iSYS.

For the three months ended March 31,
2008, our Mobile Telecom Managed Services segment experienced revenue growth of
approximately 53% from approximately $2,929,700 for the quarter ended March 31, 2007
(prior to acquisition by WidePoint), to approximately $4,487,000 for the quarter ended
March 31, 2008. We anticipate that this segment should continue to increase as the federal
agencies continue to adopt the Companys services under the recent contract award
associated with the federal strategic sourcing initiative, or FSSI, by the General Services
Administration.

For the three months ended March 31,
2008, our PKI credentialing and managed services segment experienced revenue growth of
approximately 145% with revenues increasing approximately $449,000 from approximately
$310,000 for the quarter ended March 31, 2007, to approximately $759,000 for the quarter
ended March 31, 2008. We anticipate that credential sales and managed services sales
should continue to increase in the medium to long-term time horizons as we continue to
fulfill contract wins and we witness the adoption of the External Certificate Authority
(ECA) program by the Department of Defense, the HSPD-12 program by the Federal
Government agencies and departments, and other groups commencing the pilot programs and
rollout associated with the expansion of various programs which are being mandated by the
Federal Government. During the short-term time horizon we believe that sales associated
with our PKI managed services segment could be erratic as they may be driven by delivery
timeframes controlled by external Company partners and clients that may be outside of the
control of the Company.

Our consulting services segment
experienced decreasing revenues of approximately $638,000 from approximately $2,542,000
for the quarter ended March 31, 2007 as compared to approximately $1,904,000 for the
quarter ended March 31, 2008. The decrease in revenues for the quarter ended March 31,
2008 as compared to the quarter ended March 31, 2007 was materially the result of a
reduction in billable hours worked during the quarter attributable to late starts
associated with contract awards that occurred late in the quarter.

Based upon estimates provided by
independent analyst and U.S. government estimates, management believes there is a base of
5 million to 15 million users for the Companys PKI credentials that is comprised of
U.S. Federal Government agencies employees and their contractors. The Company further
believes that there is a developing market place for PKI credentials within the state and
local governments and other national programs that extend beyond the U.S. Federal
Government agencies employees and their contractors. These other opportunities relate to
the requirements underlying the mandates for the HSPD-12 program that effect state and
local governments as well as other national programs. The Companys PKI credentials
are currently priced from approximately $27.50 to $150.00 per user on government pricing
schedules depending upon the quantity purchased and the level of managed services and
support selected by the customer. Pricing of the Companys PKI credentials by user
are driven by a competitive marketplace and may change at any time. The Company believes
it is well-positioned to effectively compete within this market segment as a result of its
past successes and experience within the PKI field.

A number of factors, including the
progress of contracts, revenues earned on contracts, the number of billable days in a
quarter, the timing of the pass-through of other direct costs, the commencement and
completion of contracts during any particular quarter, the schedule of the government
agencies for awarding contracts, the term of each contract that we have been awarded and
general economic conditions may subject our revenues and operating results to significant
variation from quarter to quarter. Because a significant portion of our expenses, such as
personnel and facilities costs, are fixed in the short term, successful contract
performance and variation in the volume of activity as well as in the number of contracts
commenced or completed during any quarter may cause significant variations in operating
results from quarter to quarter.

19

---

With our acquisitions of iSYS and ORC
we rely upon a larger portion of our revenues from the Federal Government directly or as a
subcontractor. The Federal Governments fiscal year ends September 30. If a budget
for the next fiscal year has not been approved by that date, our clients may have to
suspend engagements that we are working on until a budget has been approved. Such
suspensions may cause us to realize lower revenues in the fourth quarter and/or first
quarter of the year. Further, a change in presidential administrations and in senior
government officials may negatively affect the rate at which the Federal Government
purchases the services that we offer.

As a result of the factors above,
period-to-period comparisons of our revenues and operating results may not be meaningful.
You should not rely on these comparisons as indicators of future performance as no
assurances can be given that quarterly results will not fluctuate, causing a possible
material adverse effect on our operating results and financial condition.

In addition, most of WidePoints
current costs consist primarily of the salaries and benefits paid to WidePoints
technical, marketing and administrative personnel. As a result of our plan to expand
WidePoints operations through a combination of internal growth initiatives and
merger and acquisition opportunities, WidePoint expects such costs to
increase.  WidePoints profitability also depends upon both the volume of
services performed and the Companys ability to manage costs.  As a
significant portion of the Companys cost is labor related, WidePoint must
effectively manage these costs to achieve and grow its profitability.  To date, the
Company has attempted to maximize its operating margins through efficiencies achieved by
the use of its proprietary methodologies, and by offsetting increases in consultant
salaries with increases in consultant fees received from its clients. The uncertainties
relating to the ability to achieve and maintain profitability, obtain additional funding
to partially fund the Companys growth strategy and provide the necessary investment
to continue to upgrade its management reporting systems to meet the continuing demands of
the present regulatory changes affect the comparability of the information reflected in
the financial information presented above.

# Results of Operations

Three Months Ended March
31, 2008 as Compared to Three Months Ended March 31, 2007

Revenues,  net.  Revenues for the
three month period  ended March 31, 2008 were  approximately  $7,151,000 as compared to
 approximately  $2,852,000  for the three month period  ended March 31, 2007.  The
increase in revenues  was  primarily  attributable  to the  acquisition  of iSYS and
 increases  in our PKI managed services  segment,  partially  offset by declines within
our consulting  services  segment.  We anticipate continued  revenue  growth  across all
three of our business  segments as a result of new  contracts  that were  awarded  late
in the first  quarter  and early in the second  quarter.  Our Mobile  Telecom  Managed
Services segment  experienced  revenue growth of approximately 53% from  approximately
 $2,929,700 for the quarter ended March 31, 2007 (prior to  acquisition  by WidePoint),
 to  approximately  $4,487,000 for the quarter  ended  March 31,  2008.  We  anticipate
 that this  segment  should  continue  to increase as the federal  agencies  continue to
adopt the Companys  services under the recent  contract  award  associated with the
federal strategic sourcing initiative,  or FSSI, by the General Services  Administration.
 Our PKI credentialing  and  managed  services  segment  experienced  revenue  growth  of
 approximately  145% with revenues  increasing  approximately  $449,000  from  $310,000
 for the three month  period ended March 31, 2007,  to $759,000 for the three month
period  ended March 31,  2008,  as a result of various  mandates to roll out  credential
 programs to various  agencies  and  contractors.  Our  consulting  services  segment
experienced  decreasing revenue of approximately 25% with revenues decreasing
 approximately $638,000 from $2,542,000  for the three month period ended March 31, 2007
as compared to $1,904,000  for the three month period  ended March 31,  2008,  as a
result of a reduction  in billable  hours  worked  during the quarter attributable to
late starts associated with contract awards that occurred late in the quarter.

Cost of sales.  Cost of sales  for
the  three  month  period  ended  March  31,  2008,  was  approximately $6,046,000,  or
85%  of  revenues,  an  increase  of  approximately  $3,922,000  from  cost  of  sales
 of approximately  $2,124,000,  or 74% of  revenues,  for the three month  period  ended
March 31,  2007.  The absolute  increase in cost of sales was  primarily  attributable
 to an  increase  in  revenues  while the percentage-based  increase in cost of sales was
primarily  attributable to start-up costs  associated with new contracts and an increase
in  amortization  expense  related to the acquisition of iSYS. We anticipate improvements
in our costs of sales on a percentage basis as our managed  services  segments adds
economies of scale and upfront start-up  expenses related to new contract awards and
 implementations  are realized. We anticipate  that cost of sales will  decrease on a
percentage  basis in the near term as we move beyond the initial  start-up  phase of
recent  contract  awards and our product  mix of PKI  services  expands in relation to
our other segments.

20

---

Gross profit. As a result of
the acquisition of iSYS, gross profit for the three month period ended March 31, 2008,
was approximately $1,104,000, or 15% of revenues, an increase of approximately $376,000
over gross profit of approximately $728,000, or 26% of revenues, for the three month
period ended March 31, 2007. The percentage of gross profit was lower in the first
quarter 2008 as compared to the first quarter 2007 as a result of lower margins
associated with a greater mix of reselling items associated with our recent purchase of
iSYS in January 2008. We anticipate gross profit as a percentage of revenues will
increase in the near term as cost of sales as a percentage of revenues decreases due to a
greater mix of higher margin services add to revenue growth and higher costs associated
with initial start-up phase contract awards diminish. We believe as revenues expand in
the future there will be periods of variability in margin growth associated with changes
in our product mix.

Sales and marketing.  Sales and
marketing expense for the three month period ended March 31, 2008, was approximately
$166,000, or 2% of revenues, a decrease of approximately $14,000, as compared to
approximately $180,000, or 6% of revenues, for the three month period ended March 31,
2007.  The slight decrease was materially attributable to slightly lower costs in our bid
and proposal expenses as we performed less bid and proposal activity and increased our
start-up work associated with recent contract awards.  The absolute dollar amount of
sales and marketing may expand in the near term as we expand an initiative to expand our
sales and marketing infrastructure.

General and administrative.
General and administrative expenses for the three month period ended March 31, 2008, were
approximately $1,680,000, or 23% of revenues, an increase of approximately $743,000, as
compared to approximately $937,000, or 33% of revenues, recorded by the Company for the
three month period ended March 31, 2007. The increase in general and administrative
expenses for the three months ended March 31, 2008, was primarily attributable to our
acquisition of iSYS and an increase in the current quarter of approximately $300,000
associated with our stock compensation expense for FAS 123R for options which were issued
to key personnel of iSYS which have been expensed in the first quarter and will not
re-occur.

Depreciation.           Depreciation
expense for the three month period ended March 31, 2008, was           approximately
$37,300, or less than 1% of revenues, an increase of approximately           $21,700, as
compared to approximately $15,600 of such expenses, or less than 1%           of
revenues, recorded by the Company for the three month period ended March 31,
          2007. The increase in depreciation expense for the three month period ended
          March 31, 2008, was primarily attributable to greater amounts of depreciable
          assets.

Interest income. Interest
income for the three month period ended March 31, 2008, was approximately $15,900, or less
than 1% of revenues, a decrease of approximately $15,900 as compared to approximately
$31,800, or less than 1% of revenues, for the three month period ended March 31, 2007. The
decrease in interest income for the three month period ended March 31, 2007, was primarily
attributable to lesser amounts of invested cash and cash equivalents and lower short-term
interest rates that were available to the Company on investments in interest bearing
accounts.

Interest expense. Interest
expense for the three month period ended March 31, 2008, was approximately $99,600, or
less than 1% of revenues, an increase of approximately $96,300, as compared to
approximately $3,300, or less than 1% of revenues, for the three month period ended March
31, 2007. The increase in interest expense for the three month period ended March 31, 2008
was primarily attributable to greater expenses associated with the debt instruments and an
increase in capital leases held by the Company. We anticipate our interest expense will
fall as a result of recent capital raises for which part of the proceeds were utilized to
partially pay down outstanding debt balances.

Net loss.As a result of the
above, the net loss for the three month period ended March 31, 2008, was approximately
$863,000 as compared to the net loss of approximately $376,000 for the three months ended
March 31, 2007.

The following table sets forth
selected segment and consolidated operating results and other operating data for the
periods indicated. Segment operating income consists of the revenues generated by a
segment, less the direct costs of revenue and selling, general and administrative costs
that are incurred directly by the segment. Unallocated corporate costs include costs
related to administrative functions that are performed in a centralized manner that are
not attributable to a particular segment.

21

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|                                                                                    | Three Months EndedMarch 31,
|----------------------------------------------------------------------------------- | ---------------------------
|
|Consulting services:                                                                |                            
|Revenues                                                                            |                            
|Operating income                                                                    |                            
|Total assets                                                                        |                            
|Mobile Telecom Managed Services:                                                    |                            
|Revenues                                                                            |                            
|Operating income                                                                    |                            
|Total assets                                                                        |                            
|PKI Credentialing and Managed Services:                                             |                            
|Revenues                                                                            |                            
|Operating loss (includes amortization expense of $45,838 and $45,838, respectively) |                            
|Total assets                                                                        |                            
|Total Company                                                                       |                            
|Revenues                                                                            |                            
|Operating loss before depreciation expense                                          |                            
|Depreciation expense                                                                |                            
|Interest income (expense), net                                                      |                            
|Net loss                                                                            |                            
|Total Corporate assets                                                              |                            

|(1)              Includes
$55,269 in amortization expense in cost of sales associated with the           purchase
of ORC and $100,000 in amortization expense in cost of sales associated           with
the purchase of iSYS, which are not allocated among the segments and           includes
$562,690 in unallocated corporate costs in general and administrative           expense
of which $371,702 is comprised of stock options expense.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2)              Includes
$55,270 in amortization expense in cost of sales associated with the           purchase
of ORC, which is not allocated among the segments and includes $257,054           in
unallocated corporate costs in general and administrative expense.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Liquidity and Capital
Resources

The Company has, since inception,
financed its operations and capital expenditures through the sale of preferred and common
stock, seller notes, convertible notes, convertible exchangeable debentures, senior
secured loans and the proceeds from the exercise of the warrants related to a convertible
exchangeable debenture.  During 2007 and through the period ended March 31, 2008,
operations were materially financed with working capital and borrowings against the
Companys credit facilities with Cardinal Bank.  During the first quarter of 2008 the
Company modified its senior lending facility with Cardinal Bank for up to $5,000,000
through April 1, 2009 at a rate of prime plus 25 basis points.   Further, on November 5,
2007, the Company entered into a series of agreements with Protexx, Inc., a company which
WidePoint plans to acquire, that allows for Protexx, Inc. with approval by WidePoint to
borrow up to $250,000 from WidePoint on an installment basis between November 5, 2007 and
March 31, 2008.   The short-term borrowing facility is fully collateralized against all
of the assets of Protexx, Inc.  As of March 31, 2008, Protexx, Inc. had drawn down
$215,000 against the credit facility.

22

---

Net cash provided by operating
activities for the quarter ended March 31, 2008, was approximately $2,254,000, as
compared to cash provided by operating activities of $2,741 for the quarter ended March
31, 2007.  The increase in cash generated from operating activities for the quarter ended
March 31, 2008, was primarily a result of increases in accounts receivable and other
assets, partially offset by decreases in accounts payable.  Variability in Days Sales
Outstanding and increases in revenue growth as a result of our acquisition of iSYS in
January 2008 were contributing factors to these changes. Net cash used in investing
activities for the quarter ended March 31, 2008, was approximately $4,929,000, as
compared to $22,000 used in investing activities in the quarter ended March 31, 2007.
 The increase in net cash used in investing activities primarily reflects the net assets
and liabilities assumed in connection with the Companys acquisition of iSYS, LLC in
January 2008. Net cash provided by financing activities amounted to approximately
$3,163,000 in the quarter ended March 31, 2008, as compared to approximately $14,000 of
net cash used in financing activities in the quarter ended March 31, 2007. The increase
in net cash provided by financing activities primarily relates to bank financing obtained
to finance a portion of the purchase price to acquire iSYS, LLC in January 2008.

As of March 31, 2008, the Company had
a net working capital of approximately $1,474,000. The Companys primary source of
liquidity consists of approximately $2.3 million in cash and cash equivalents and
approximately $7.5 million of accounts receivable. The Companys primary use of
liquidity consists of approximately $1.8 million in borrowings against the Companys
$5.0 million credit facility with Cardinal Bank and approximately $6.8 million in accounts
payable and accrued expenses.

The Companys business
environment is characterized by rapid technological change, periods of high growth and
contraction and is influenced by material events such as mergers and acquisitions that can
substantially change the Companys outlook.

The Company has embarked upon several
new initiatives to expand revenue growth which has included acquisitions and organic
growth. The Company requires substantial working capital to fund the future growth of its
business, particularly to finance accounts receivable, sales and marketing efforts, and
capital expenditures.

Currently there are no material
commitments for capital expenditures and software development costs. Future capital
requirements will depend on many factors, including the rate of revenue growth, if any,
the timing and extent of spending for new product and service development, technological
changes and market acceptance of the Companys services.

Management believes that its current
cash position is sufficient to meet capital expenditure and working capital requirements
for the near term.  However, the growth and technological change of the market make it
difficult to predict future liquidity requirements with certainty.  Over the longer term,
the Company must successfully execute its plans to increase revenue and income streams
that will generate significant positive cash flows if it is to sustain adequate liquidity
without impairing growth or requiring the infusion of additional funds from external
sources. Additionally, a major expansion, such as occurred with the acquisition of iSYS
or any other potential new subsidiaries, might require external financing that could
include additional debt or equity capital.  The Company recently added to its working
capital by selling shares of its common stock in private transactions.  The approximate
$4.1 million in proceeds during the 2nd quarter of 2008 has bolstered the Companys
ability to finance working capital requirements.  There can be no assurance that
additional financing, if required, will be available on acceptable terms, if at all, for
future acquisitions and/or growth initiatives.

# Off-Balance Sheet
Arrangements

The Company has no existing
off-balance sheet arrangements as defined under SEC regulations.

# ITEM 4T. CONTROLS AND
PROCEDURES

# Disclosure Controls and
Procedures

We maintain disclosure controls and
procedures designed to provide reasonable assurance that material information required to
be disclosed by us in the reports we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods specified in
the SEC's rules and forms, and that the information is accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure. We performed an
evaluation, under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as of the end of the
period covered by this report. Based on the existence of the material weaknesses in our
internal control over financial reporting discussed below our management, including our
Chief Executive Officer and Chief Financial Officer, concluded that our disclosure
controls and procedures were not effective at the reasonable assurance level as of the
end of the period covered by this report.

23

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We do not expect that our disclosure
controls and procedures will prevent all errors and all instances of fraud. Disclosure
controls and procedures, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the disclosure controls and
procedures are met. Further, the design of disclosure controls and procedures must reflect
the fact that there are resource constraints, and the benefits must be considered relative
to their costs. Because of the inherent limitations in all disclosure controls and
procedures, no evaluation of disclosure controls and procedures can provide absolute
assurance that we have detected all our control deficiencies and instances of fraud, if
any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions.

# Changes in
Internal Control Over Financial Reporting

In our  Managements  Report on
Internal Control Over Financial  Reporting  included in the Companys Form 10-K for the
year ended December 31, 2007,  management  concluded that our internal control over
financial reporting  was not  effective  due to the  existence of the material
 weaknesses  as of December 31, 2007, discussed below. A material weakness is a control
 deficiency,  or a combination of control  deficiencies, that  results  in more than a
remote  likelihood  that a  material  misstatement  of the annual or interim financial
statements will not be prevented or detected.

| |  | Inadequate
 segregation  of duties  within a  significant  account  or  process.  We did not have
         appropriate  segregation of duties within our internal  controls that would
ensure the consistent          application  of  procedures  in our  financial  reporting
 process by  existing  personnel.  This          control  deficiency  could  result  in a
 misstatement  to  substantially  all of  our  financial          statement  accounts and
 disclosures  that would result in a material  misstatement to the annual          or
 interim  financial  statements  that  would  not  be  prevented  or  detected.
  Accordingly,          management has concluded that this control deficiency constitutes
a material weakness.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Inadequate
documentation of the components of internal control. We did not maintain documented
policies and evidence of compliance with our internal controls that would ensure the
consistent application of procedures in our financial reporting process by existing
personnel. This control deficiency could result in a misstatement to substantially all of
our financial statement accounts and disclosures that would result in a material
misstatement to the annual or interim financial statements that would not be prevented or
detected. Accordingly, management has concluded that this control deficiency constitutes
a material weakness.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---

The material weaknesses described
above comprise control deficiencies that we discovered in the fourth quarter of fiscal year 2007
and in the financial close process for fiscal year 2007.

Beginning during the fourth quarter
of fiscal 2007 and in the first quarter of fiscal year 2008, we formulated a remediation
plan and initiated remedial action to address those material weaknesses. The elements of
the remediation plan are as follows:

| |  | Inadequate
segregation of duties within a significant account or process.We commenced a
thorough review of our accounting staffs duties and where necessary we have been
segregating such duties with other personnel.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Inadequate
documentation of the components of internal control. We commenced a thorough review
of our documentation and where necessary we have put into place policies and procedures
to document such evidence to comply with our internal control requirements. We have also
retained a financial consultant to assist us in further reviewing and improving our
internal control processes.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We believe that these measures, if
effectively implemented and maintained, will remediate the material weaknesses discussed
above.

The above remedial measures
initiated during the fourth quarter of fiscal year 2007 and pursued in the quarter ended
March 31, 2008, have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

# PART II - OTHER
INFORMATION

# ITEM 2.  Unregistered
Sales of Equity Securities and Use of Proceeds.

On May 16,  2008,  the Company
 entered  into two Common  Stock  Purchase  Agreements  (collectively,  the Endurance
 Purchase  Agreements) with Endurance  Partners,  L.P. and Endurance Partners (Q.P),
L.P., and related  agreements,  as part of a private equity financing to raise additional
funds for working capital. Under the Endurance Purchase  Agreements,  Endurance
 Partners,  L.P. agreed to purchase 428,954 shares of WidePoint  common stock for a total
 purchase  price of  $437,533.08,  or $1.02 per share,  and  Endurance Partners (Q.P.),
 L.P. agreed to purchase  1,071,046 shares of WidePoint common stock for a total purchase
price of $1,092,466.92,  or $1.02 per share.  Pursuant to the Endurance  Purchase
 Agreements,  on May 19, 2008,  the Company issued  428,954  shares of its common stock
to Endurance  Partners,  L.P. and 1,071,046 shares of its common stock to Endurance
 Partners  (Q.P.),  L.P. The offer and sale of the shares were not registered under the
Securities Act of 1933, as amended,  in reliance on the private offering  exemption
provided under Section 4(2) thereof.

# ITEM 6. EXHIBITS.

|EXHIBIT NO. | DESCRIPTION
|----------- | -----------

|2.1 | Membership
 Interest Purchase Agreement,  dated as of January 2, 2008, between the Company,  iSYS
         LLC, and Jin Kang.         (Incorporated  herein by reference to Exhibit 2.1 to
the  Registrants          Current Report on Form 8-K filed on January 8, 2008.)
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25

---

|10.1 | $2,000,000
 Installment Cash Promissory  Note, dated January 4, 2008,  issued by the Company in
favor         of Jin Kang.  (Incorporated  herein by  reference  to  Exhibit  10.1 to the
 Registrants  Current         Report on Form 8-K filed on January 8, 2008.)
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Employment
and Non-Compete  Agreement,  dated as of January 4, 2008,  between the Company,  iSYS LLC
        and Jin Kang. *  (Incorporated  herein by reference  to Exhibit 10.2 to the
 Registrants  Current         Report on Form 8-K filed on January 8, 2008.)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 | Commercial
 Loan  Agreement,  dated  January  2,  2008,  between  the  Company  and  Cardinal  Bank.
        (Incorporated  herein by reference to Exhibit 10.3 to the Registrants  Current
Report on Form 8-K         filed on January 8, 2008.)
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 | Security
 Agreement,  dated  January 2, 2008,  between the Company and Cardinal  Bank.
 (Incorporated         herein by  reference  to  Exhibit  10.4 to the  Registrants
 Current  Report on Form 8-K filed on         January 8, 2008.)
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 | $5,000,000
 Promissory Note, dated January 2, 2008,  issued by the Company in favor of Cardinal
Bank.         (Incorporated  herein by reference to Exhibit 10.5 to the Registrants
 Current Report on Form 8-K         filed on January 8, 2008.)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 | Security
 Agreement,  dated  January 2, 2008,  between the Company and Cardinal  Bank.
 (Incorporated         herein by  reference  to  Exhibit  10.6 to the  Registrants
 Current  Report on Form 8-K filed on         January 8, 2008.)
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 | $2,000,000
 Promissory Note, dated January 2, 2008,  issued by the Company in favor of Cardinal
Bank.         (Incorporated  herein by reference to Exhibit 10.7 to the Registrants
 Current Report on Form 8-K         filed on January 8, 2008.)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 | Debt
 Subordination  Agreement,  dated  January 2, 2008,  between  the  Company  and  Cardinal
 Bank.         (Incorporated  herein by reference to Exhibit 10.8 to the Registrants
 Current Report on Form 8-K         filed on January 8, 2008.)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 | Common
Stock Purchase Agreement, dated April 29, 2008, between the Company and Deutsche Bank
         AG, London Branch (Incorporated herein by reference to Exhibit 10.1 to the
Companys Current          Report on Form 8-K filed May 5, 2008).
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 | Escrow
Agreement, dated April 29, 2008, between the Company, Deutsche Bank AG, London Branch
         and Foley & Lardner LLP as Escrow Agent (Incorporated herein by reference to
Exhibit 10.2 to          the Companys Current Report on Form 8-K filed May 5, 2008).
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 | Common
Stock Purchase Agreement, dated May 16, 2008, between the Company and Endurance
         Partners, L.P.  (Filed herewith).
|----- | ---------------------------------------------------------------------------------------------------------------------------------

|10.12 | Escrow
Agreement, dated May 16, 2008, between the Company, Endurance Partners, L.P. and Foley &         Lardner
LLP as Escrow Agent (Filed herewith).
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 | Common
Stock Purchase Agreement, dated May 16, 2008, between the Company and Endurance Partners
         (Q.P.), L.P.  (Filed herewith).
|----- | ----------------------------------------------------------------------------------------------------------------------------------------

|10.14 | Escrow
Agreement,  dated May 16, 2008, between the Company,  Endurance Partners (Q.P.),  L.P.
and          Foley & Lardner LLP as Escrow Agent (Filed herewith).
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1 | Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002 (Filed herewith).
|---- | -----------------------------------------------------------------------------------------------------------------------------

|31.2 | Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002 (Filed herewith).
|---- | -----------------------------------------------------------------------------------------------------------------------------

|32 | Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Filed herewith).
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------

---

*  Management Contract or Compensatory
Plan.

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---

# SIGNATURES

Pursuant
to the requirements 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.

|                   | WIDEPOINT CORPORATION  
|------------------ | -----------------------
|Date: May 20, 2008 | /s/ STEVE L. KOMAR     
|                   | Steve L. Komar         
|                   | President and          
|                   | Chief Executive Officer
|                   | /s/ JAMES T. MCCUBBIN  
|                   | James T. McCubbin      
|                   | Vice President -       
|                   | Principal Financial    
|                   | and Accounting Officer 

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