SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

__________________

# FORM 10-Q/A No. 1

Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934

Amendment No. 1 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004

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

|Delaware                        | 000-23967                | 52-2040275                       
|------------------------------- | ------------------------ | ---------------------------------
|(State or other jurisdiction of | (Commission File Number) | (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

The
undersigned registrant hereby amends the following items, financial statements, exhibits
or other portions of its Quarterly Report on Form 10-Q for the quarter ended June 30,
2004, as previously filed on August 15, 2004, as set forth in the pages attached hereto:

| | Part I  | Item 1 | Condensed Consolidated Financial Statements                                          
| | ------- | ------ | -------------------------------------------------------------------------------------
| |         | Item 2 | Managements Discussion and Analysis of Financial Condition and Results of Operations
| |         | Item 4 | Controls and Procedures                                                              
| | Part II | Item 6 | Exhibits                                                                             

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.

|                        | WidePoint Corporation                     
|----------------------- | ------------------------------------------
|Date:  January 19, 2006 | By:  /s/ James T. McCubbin                
|                        | James T. McCubbin                         
|                        | Vice President and Chief Financial Officer

---

INTRODUCTORY NOTE

This Amendment No. 1 of the Companys
 Quarterly Report on Form 10-Q has been revised as a result of certain  Restatements made
by the Company, which are further described in the Financial Statements, note No. 1.

WIDEPOINT CORPORATION

INDEX

|                                                                     
|---------------------------------------------------------------------
|Part I.        FINANCIAL INFORMATION                                 
|Item 1. Condensed Consolidated Financial Statements                  
|Condensed Consolidated Balance Sheets as of June 30, 2004,           
|and December 31, 2003 (unaudited)                                    
|Condensed Consolidated Statements of Operations for the three and six
|months ended June 30, 2004 and 2003 (unaudited)                      
|Condensed Consolidated Statements of Cash Flows for the three and six
|months ended June 30, 2004 and 2003 (unaudited)                      
|Notes to Condensed Consolidated Financial Statements                 
|Item 2. Managements Discussion and Analysis of Financial            
|Condition and Results of Operations                                  
|Item 4. Controls and Procedures                                      
|Part II.        OTHER INFORMATION                                    
|Item 6. Exhibits and Reports on Form 8-K                             

---

# PART 1.    FINANCIAL
INFORMATION

# ITEM 1.    CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

# WIDEPOINT CORPORATION
AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                 | As Restated
June 30,
2004 | December 31,
2003
|---------------------------------------------------------------- | ------------------------- | -----------------
|
|Current assets:                                                  |                           |                  
|Cash and cash equivalents                                        |                           |                  
|Accounts receivable,                                             |                           |                  
|net of allowance of $0 and 18,819, respectively                  |                           |                  
|Prepaid expenses and other assets                                |                           |                  
|                                                                 |                           |                  
|Total current assets                                             |                           |                  
|Property and equipment, net                                      |                           |                  
|Other assets                                                     |                           |                  
|                                                                 |                           |                  
|Total assets                                                     |                           |                  
|                                                                 |                           |                  
|LIABILITIES & SHAREHOLDERS EQUITY                              
|Current liabilities:                                             |                           |                  
|Accounts payable                                                 |                           |                  
|Accrued expenses                                                 |                           |                  
|                                                                 |                           |                  
|Total current liabilities                                        |                           |                  
|Long-term portion of deferred rent                               |                           |                  
|                                                                 |                           |                  
|Total Liabilities                                                |                           |                  
|Shareholders equity                                             |                           |                  
|Preferred stock, $0.001 par value, 10,000,000 shares authorized, |                           |                  
|None issued and outstanding                                      |                           |                  
|Common stock, $0.001 par value, 50,000,000 shares authorized,    |                           |                  
|16,079,913 and 15,579,913 shares issued and outstanding          |                           |                  
|as of June 30, 2004 and December 31, 2003, respectively          |                           |                  
|Common stock issuable, $0.001 par value, 816,596 and 0 shares,   |                           |                  
|respectively                                                     |                           |                  
|Related party notes receivable                                   |                           |                  
|Additional paid-in capital                                       |                           |                  
|Accumulated deficit                                              |                           |                  
|                                                                 |                           |                  
|Total shareholders equity                                       |                           |                  
|                                                                 |                           |                  
|Total liabilities & shareholders equity                         |                           |                  
|                                                                 |                           |                  

The accompanying notes
are an integral part of these statements.

1

---

# WIDEPOINT CORPORATION
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

|                                                      | Three Months Ended
June 30, | Six Months Ended
June 30,
|----------------------------------------------------- | --------------------------- | -------------------------
|
|
|
|Revenues, net                                         |                             |                          
|Operating expenses:                                   |                             |                          
|Cost of sales                                         |                             |                          
|Sales and marketing                                   |                             |                          
|General & administrative                              |                             |                          
|Depreciation                                          |                             |                          
|                                                      |                             |                          
|Loss from operations                                  |                             |                          
|Interest income (expenses), 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 statements.

2

---

# WIDEPOINT CORPORATION
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                              | Three Months Ended
June 30, | Six Months Ended
June 30,
|--------------------------------------------- | --------------------------- | -------------------------
|
|
|
|Cash flows from operating activities:         |                             |                          
|Net loss                                      |                             |                          
|Adjustments to reconcile net loss to net cash |                             |                          
|used in operating activities                  |                             |                          
|Depreciation expense                          |                             |                          
|Stock compensation expense                    |                             |                          
|Changes in assets and liabilities             |                             |                          
|Accounts receivable                           |                             |                          
|Prepaid expenses                              |                             |                          
|Other assets                                  |                             |                          
|Accounts payable and accrued expenses         |                             |                          
|                                              |                             |                          
|Net cash used in operating activities         |                             |                          
|                                              |                             |                          
|Cashflows from investing activities:          |                             |                          
|Purchase of property and equipment            |                             |                          
|                                              |                             |                          
|Net cash used in investing activities         |                             |                          
|                                              |                             |                          
|Cashflows from financing activities:          |                             |                          
|Net borrowings on notes payable               |                             |                          
|Net payments on long-term obligations         |                             |                          
|                                              |                             |                          
|Net cash provided                             |                             |                          
|by financing activities                       |                             |                          
|                                              |                             |                          
|Net decrease in cash                          |                             |                          
|                                              |                             |                          
|Cash, beginning of period                     |                             |                          
|                                              |                             |                          
|Cash, end of period                           |                             |                          
|                                              |                             |                          

The accompanying notes
are an integral part of these statements.

3

---

# WIDEPOINT CORPORATION
AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

# 1.   Basis of
Presentation, Organization, Nature of Operations, and Restatement:

The accompanying unaudited financial
statements have been prepared in accordance with Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States of America (US
GAAP) for complete financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, considered necessary for a
fair presentation have been included. These financial statements should be read in
conjunction with the financial statements of WidePoint Corporation, as of December 31,
2003, and the notes thereto included in the Annual Report on Form 10-K filed by the
Company. The results of operations for the three and six months ended June 30, 2004, are
not necessarily indicative of the results that may be expected for the year ending
December 31, 2004.

WidePoint Corporation is a consulting
services firm specializing in planning, managing and implementing Information Technology
(IT) solutions. Its staff consists of business and technical specialists that
help customers augment and expand their technical capabilities, drive new technical
innovations and help maintain a competitive edge in todays rapidly changing
technological environment. The Company through a concerted mergers and acquisition
strategy is focused on expanding its IT public market segment and has acquired one
enterprise. The Company has entered into letters of intent to acquire several other
enterprises for which the Company is presently completing its financing and due diligence
efforts.

During 2003, the Company witnessed a
negative economic environment within the commercial IT sector due to constrained business
investment and an excessive supply of IT Consultants which as a result reduced gross
margins and decreased demand for the IT services that the Company provided to its
customers.

In its efforts to expand its revenue
streams, the Company continued to implement and refine a strategic plan that has included:
the launch of a federal business initiative in 2003, the continued development of new
technologies and capabilities focused within wireless technologies, the development of
various other practice areas, the initiation and expansion of several alliances to expand
the Companys ability to provide expanded services and reach to a wider group of new
customers, and an expansion of both management talent and reach through its focused
efforts to acquire additional business assets and revenue streams through targeted merger
and acquisition activities in 2004.

On March 24, 2004 the Company entered
into a merger agreement to acquire the stock of Chesapeake Government Technologies, Inc.
(CGT), a Delaware Corporation. The Company closed on the transaction on April
30, 2004 through a reverse triangular merger between Chesapeake Acquisition Corporation,
Chesapeake Government Technologies, Inc. and WidePoint Corporation with Chesapeake
Government Technologies, Inc. becoming a wholly owned subsidiary of WidePoint Corporation.
The consideration included the issuance of an aggregate of 4,082,980 shares of stock, of
which 3,266,384 shares were deposited into escrow, and the assumption of approximately
$30,000 of debt as further described within a Form 8-K filed on May 14, 2004. The
executive management expertise of the Company was greatly expanded through this
transaction and further augmented the reach and expertise of the Company. CGT additionally
brings to WidePoint several additional alliances, relationships, and targeted companies
that CGT is in various phases of discussion in regards to merger and acquisition
opportunities with CGT and WidePoint. The Company continues its efforts to expand the
operations of WidePoint through mergers and acquisitions. The Company has entered into
several letters of intent to acquire companies that if consummated will materially expand
the public sector segment of the Company.

4

---

Most of the Companys current
costs consist primarily of the salaries and benefits paid to the Companys technical,
marketing and administrative personnel. As a result of its plan to expand its operations
through new internal initiatives and merger and acquisition related activities, the
Company expects these costs to increase. The Companys profitability depends upon
both the volume of services performed and the Companys ability to manage costs.
Because a significant portion of the Companys cost structure is labor related, the
Company must effectively manage these costs to achieve profitability. To date, the Company
has attempted to maximize its operating margins through efficiencies achieved by the use
of the Companys proprietary methodologies and by offsetting increases in consultant
salaries with increases in consultant fees received from clients. The current business
environment has witnessed an increase in the competitive environment for the
Companys services. The Company anticipates that this trend may continue until an
economic recovery is further underway.

Restatement

Management of the Company determined
that we had not correctly accounted for the Chesapeake acquisition as 1) it should not
have resulted in the recognition of an intangible asset; 2) Company shares that were
placed in escrow for release only upon the achievement of certain future revenue should
not have been recognized immediately, but instead, only upon the achievement of certain
contingencies; and 3) as a result of timing differences between the actual issuance by the Company of shares earned and issued, the Company
should have recorded those shares earned during the period ending June 30, 2004 as common stock issuable and not as common stock as those shares were not issued until July 13, 2004.

While the Companys management
believes that the Company did acquire assets in a business sense when it acquired the
stock of Chesapeake, these assets, consisting primarily of Chesapeakes relationships
with various sources of potential business opportunities, did not meet the criteria for
recognition as assets under Statement of Financial Accounting Standards No. 141
(SFAS 141). Additionally, the acquisition could not give rise to goodwill
because Chesapeake was in the development stage at the time of acquisition and therefore
not considered a business.

As a consequence of these
determinations, previously issued financial statements have been restated to eliminate the
intangible asset associated with the Chesapeake acquisition, reverse related amortization
expense, and expense as consulting fees the cost of the transaction attributable to the
cost of issuance of the non-escrowed shares and other related direct costs at the time of
acquisition. Further, the basic and diluted weighted average shares outstanding have been
adjusted to allow only for the recordation of the shares attributable to the issuance of
the non-escrowed shares, which had been earned at the time of the transaction. This
resulted in a reduction of basic and diluted weighted average shares outstanding from
18,717,955 and 17,148,934 for the three and six month periods ending June 30, 2004,
respectively, to 16,528,400 and 16,054,157 for the same periods.

5

---

The effect of the above mentioned
restatements are presented as follows:

Balance Sheets:

|                     
|---------------------
|
|
|Goodwill and other   
|intangibles          
|                     
|Total assets         
|                     
|                     
|Common stock         
|                     
|Common stock issuable
|                     
|                     
|Additional paid-in   
|capital              
|                     
|Accumulated deficit  
|                     
|                     
|Total shareholders  
|equity               
|                     
|                     
|Total liabilities,   
|temporary equity &   
|shareholders equity 
|                     

Statement of Operations:

|                        
|------------------------
|
|
|
|General & administrative
|                        
|Loss from operations    
|                        
|Net loss                
|                        
|                        
|Basic and diluted net   
|loss per share          
|                        
|                        
|Basic and diluted       
|weighted average shares 
|outstanding             
|                        

6

---

Statement of Cashflows:

|                  
|------------------
|
|
|
|Net loss          
|                  
|Stock compensation
|expense           
|                  

# 2.   Significant Accounting
Policies:

Principles of
Consolidation

The accompanying consolidated
financial statements include the accounts of the acquired entities since their respective
dates of acquisition. All significant intercompany amounts have been eliminated.

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.

Cash and Cash Equivalents

Investments purchased with original
maturities of three months or less are considered cash equivalents for purposes of these
condensed consolidated financial statements. The Company maintains cash and cash
equivalents with various major financial institutions. At June 30, 2004 and December 31,
2003, cash and cash equivalents included $250,815 and $250,144, respectively, on
investments in interest bearing accounts. At times, cash balances held at financial
institutions were in excess of federally insured limits. The Company places its temporary
cash investments with high-credit, quality financial institutions, and as a result, the
Company believes that no significant concentration of credit risk exists with respect to
these cash investments.

Accounts Receivable

The majority of the Companys
accounts receivable are due from established companies in the following industries:
manufacturing, consumer product goods, direct marketing, healthcare and other service
companies.

Credit is extended based on
evaluation of a customers financial condition and, generally, collateral is not
required. Accounts receivable are due within 30 to 45 days and are stated at amounts due
from customers net of an allowance for doubtful accounts. Accounts outstanding longer than
the contractual payment terms 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 following table sets forth the rolling forward
balances of the Allowance for doubtful accounts of the Company.

7

---

|Description                                     | Balance at
Beginning of
Period | Additions
Charged to
Costs and
Expenses | Deductions | Balance at
End of
Period
|----------------------------------------------- | ------------------------------ | --------------------------------------- | ---------- | ------------------------
|For the year ended December 31, 2003, Allowance |                                |                                         |            |                         
|for doubtful accounts                           |                                |                                         | $          | 1,800                   
|For the quarter ended June 30, 2004,            |                                |                                        
|Allowance for doubtful accounts                 |                                |                                         | $          | 18,819                  

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. Unbilled accounts receivable totaled $8,190 and $6,207 at June 30, 2004 and
December 31, 2003, respectively.

Concentrations of Credit
Risk

Financial instruments that
potentially subject the Company to credit risk consist of cash and cash equivalents and
accounts receivable. As of June 30, 2004, two customers represented 26% and 11% percent of
accounts receivable, respectively. As of December 31, 2003, three customers individually
represented 26%, 11%, and 10% of accounts receivable.

Fair Value of Financial
Instruments

WidePoint financial instruments
consist of cash, accounts receivable, accounts payable and accrued expenses. The fair
value of these financial instruments approximates their carrying value as of June 30,
2004, due to their short-term nature.

Revenue Recognition

Revenue on time-and-materials
contracts is recognized based upon hours incurred at contract rates plus direct costs.
Revenue on fixed-price contracts is recognized on the percentage-of-completion method
based on costs incurred in relation to total estimated costs. Anticipated losses are
recognized as soon as they become known. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Out of pocket
expenses for billable work are recognized as revenues and such out of pocket expenses are
expensed in Cost of Revenues.

8

---

Significant Customers

During the second quarter of 2004,
four customers individually represented 20%, 14%, 10%, and 10% percent of revenue. During
the second quarter of 2003, six customers individually represented 18%, 15%, 12%, 11%,
11%, and 11% percent of revenue.

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
continues to reduce its net deferred taxes by a 100% valuation allowance.

Stock-based compensation

The Company accounts for stock-based
employee compensation arrangements using the intrinsic value method in accordance with the
provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and complies with the disclosure provisions of SFAS No. 123
Accounting for Stock-Based Compensation. Under APB Opinion No. 25,
compensation cost is generally recognized based on the difference, if any, on the date of
grant between the fair value of the Companys common stock and the amount an employee
must pay to acquire the stock. The following table illustrates the effect on net income
and earnings per share if the Company had applied the fair value recognition provisions of
FASB Statement 123, Accounting for Stock-Based Compensation, using the
assumptions described below, to its stock-based employee plans.

|                                           | Three Months ended
June 30, | Six Months ended
June 30,
|------------------------------------------ | --------------------------- | -------------------------
|
|Net loss, as reported                      |                             |                          
|Add: Total stock-based employee            |                             |                          
|compensation expense determined under fair |                             |                          
|value based method for awards granted,     |                             |                          
|modified, or settled, net of related tax   |                             |                          
|effects                                    |                             |                          
|                                           |                             |                          
|Pro forma net loss                         |                             |                          
|Earnings per share:                        |                             |                          
|Basic and diluted - as reported            |                             |                          
|Basic and diluted - pro forma              |                             |                          

9

---

The pro forma disclosure is not
likely to be indicative of pro forma results which may be expected in future years because
of the fact that options vest over several years, pro forma compensation expense is
recognized as the options vest and additional awards may also be granted.

For purposes of determining the
effect of these options, the fair value of each option is estimated on the date of grant
based on the Black-Scholes single-option pricing model assuming the following for the
three and six months ended June 30, 2004 and 2003:

|                            | 2004       | 2003      
|--------------------------- | ---------- | ----------
|Dividend yield              | --         | --        
|Risk-free interest rate (%) | 2.70-4.13% | 2.70-4.13%
|Volatility factor (%)       | 156%       | 156%      
|Expected life in years      | 5          | 5         

Non-employee based
compensation:

The Company accounts for stock-based
non-employee compensation arrangements using the fair value recognition provisions of
FASB Statement 123, Accounting for Stock-Based Compensation and Emerging Issues Task
Force EITF 96-18, Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services.

Stock Based Performance
Warrants

The Company has entered into several
stock performance incentive arrangements utilizing warrants with members of the
Companys management team. These warrants are accounted for as variable plans under
APB 25 because vesting of the warrants are tied to specific performance parameters which
cannot be determined until such performance has been achieved. Presently, no warrants have
satisfied any performance requirements.

Basic and Diluted Net
Loss Per Share

Basic income or loss per share
includes no dilution and is computed by dividing net income or loss by the
weighted-average number of common shares outstanding for the period. Diluted income 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. The
treasury stock effect of options and warrants to purchase 5,378,384 and 1,816,000 shares
of common stock outstanding at June 30, 2004 and 2003, respectively, has 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 loss per share for all periods presented
are identical.

Reclassifications

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

# 3.   Promissory Notes:

Promissory Notes

10

---

Pursuant to stock purchase agreements
entered into on July 8, 2002, between the Company and each of Steve L. Komar, James T.
McCubbin and Mark M. Mirabile, the Company privately sold 865,000 shares of its common
stock to each such person without registration under the Securities Act of 1933, pursuant
to the private offering exemption under Section 4(2) thereof, in consideration of a three
(3) year full-recourse, five percent (5%) interest bearing promissory note with equal
annual principal payments due, issued by each such person to the Company in the principal
amount of $60,550, or $181,650 in the aggregate (which equals $0.07 per share, being the
closing price of the Companys common stock on July 8, 2002). The individuals have
repaid to date $21,500 individually, or $64,500 in aggregate to the Company.

# 4.   Commitments and
Contingencies:

Litigation

The Company is periodically a party to
disputes arising from normal business activities. In the opinion of management, resolution
of these matters will not have a material adverse effect upon the financial position or
future operating results of the Company and adequate provision for any potential losses
has been made in the accompanying consolidated financial statements.

11

---

# 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, 2003.

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.

# Restatement and Overview

WidePoint Corporation is a consulting
services firm specializing in planning, managing and implementing Information Technology
(IT) solutions. Its staff consists of business and technical specialists that
help customers augment and expand their technical capabilities, drive new technical
innovations and help maintain a competitive edge in todays rapidly changing
technological environment.

The WidePoint approach is to apply a
structured delivery methodology based on industry standard best practices, enhanced with a
set of deliverable templates that increase productivity and effectiveness. WidePoint
focuses on providing end results with significant, tangible business benefits. Our
consultants possess recognized industry-standard certifications and years of successful
project experience.

Since 1996, WidePoint has focused on
leveraging leading edge technologies, methodologies and consultants to help clients
improve their business performance. This focus continues to tie together the
Companys service offerings and future direction. WidePoints clients are
increasingly looking to harness the power of the Internet and leading IT technologies by
integrating these technologies with their existing systems as they transition, expand, and
refine their business environments.

During 2003, the Company witnessed a
negative economic environment within the commercial IT sector due to constrained business
investment and an excessive supply of IT Consultants which as a result reduced gross
margins and decreased demand for the IT services that the Company provided to its
customers.

In its efforts to expand its revenue
streams, the Company continued in 2004 to implement and refine a strategic plan which has
included: the launch of a federal business initiative in 2003, the continued development
of new technologies and capabilities focused within wireless technologies, the development
of various other practice areas, the initiation and expansion of several alliances to
expand the Companys ability to provide expanded services and reach to a wider group
of new customers, and an expansion of both management talent and reach through its focused
efforts to acquire additional business assets and revenues streams through targeted merger
and acquisition activities in 2004.

12

---

On March 24, 2004 the Company entered
into a merger agreement to acquire the stock of Chesapeake Government Technologies, Inc.
(CGT), a Delaware Corporation. The Company closed on the transaction on April
30, 2004 through a reverse triangular merger between Chesapeake Acquisition Corporation,
Chesapeake Government Technologies, Inc. and WidePoint Corporation with Chesapeake
Government Technologies, Inc. becoming a wholly owned subsidiary of WidePoint Corporation.
The consideration included the issuance of stock and the assumption of debt as further
described within a Form 8-K filed on May 14, 2004. The executive management expertise of
the Company was greatly expanded through this transaction and further augmented the reach
and expertise of the Company. CGT additionally brings to WidePoint several additional
alliances, relationships, and targeted companies that CGT is in various phases of
discussion in regards to merger and acquisition opportunities with CGT and WidePoint.

The Company continues its efforts to
expand the operations of WidePoint through merger and acquisitions. On April 19, 2004,
WidePoint entered into a non-binding letter of intent to acquire all of the stock of
Knowledge Workers, Inc., (KWI) a Colorado based corporation, for the
consideration of the issuance of WidePoint common stock and the assumption of debt.
KWIs business expertise resides in the improved utilization of Human Capital
services through the use of its proprietary software and solutions with clients in both
the commercial and government marketplace. Although a definitive agreement has not been
entered into and consummation of the potential acquisition cannot be characterized as
probable at this time, the Company is working towards a closing of this transaction no
later than the third quarter of 2004. The Company further entered into a non-binding
letter of intent to acquire all of the stock of Operational Research Consultants, Inc.,
(ORC) a Virginia based corporation on July 7, 2004. ORC business expertise
resides in specialized IT based software and services predominately within the federal
marketplace. The Company is also presently attempting to negotiate several other
transactions that will further expand the public sector segment of the Company.

For the three months ended June 30,
2004, revenue was approximately $841,000 as compared to revenue of approximately $815,000
for the quarterly period ended June 30, 2003. For the six months ended June 30, 2004,
revenue was approximately $1,564,000, as compared to revenue of approximately $1,738,000
for the six-month period ended June 30, 2003. The increase in revenues in the three months
ended June 30, 2004, was attributable to an increase in additional hours billed as a
result of a higher win rate associated with the Companys sales and marketing
efforts. The decrease in revenues for the six months ended June 30, 2004, was attributable
to fewer hours billed and a lower average bill rate for the comparative first quarters.
The Company has witnessed a stabilization and slight increase in billable hours worked
during the second quarter of 2004 while pricing pressures within the industry continued to
place pressure on average billable rates as compared to the second quarter of 2003, but
presently the Company has witnesses a stabilization of these pricing pressures. The
instability within the IT marketplace continues to create an increase in competitiveness
that creates a more difficult environment to expand revenues internally for the Company.
The Company anticipates these trends may continue into the second half of 2004 with a
modest pickup in revenue not associated with merger and acquisition activity possible
during this period. The Company further anticipates that if it is successful in executing
its business strategy to expand into the government marketplace through mergers and
acquisitions that revenue growth can be expected to expand materially in the second half
of 2004.

13

---

Most of the Companys current
costs consist primarily of the salaries and benefits paid to the Companys technical,
marketing and administrative personnel and depreciation expenses related to property and
equipment. Consistent with the development of a new focused strategic direction, the
Company expects to expand its operations through internal growth and by potential
acquisition of new personnel and assets. Therefore, the Company anticipates these costs
will increase.

The Companys profitability
depends upon both the volume of services performed and the Companys ability to
manage costs. Because a significant portion of the Companys cost structure is labor
related, the Company must effectively manage these costs to achieve profitability. To
date, the Company has attempted to manage its operating margins by offsetting increases in
consultant salaries with increases in consultant fees received from clients and by
effectively managing general overhead costs. During the economic slowdown within the IT
marketplace the Company has witnessed a degradation of its operating margins and continues
to experience margin pressures for the services that the Company offers. To be successful
the Company must continue to win new business, expand its revenues, and manage its
operating margins along with its general overhead costs to mitigate the Companys
losses and restore positive cashflow and earnings growth.

Management of the Company
 determined  that we had not correctly  accounted for the  Chesapeake  acquisition  as
1) it should not have resulted  in the  recognition  of an  intangible  asset;  2)  Company
 shares  that were  placed in escrow for  release  only upon the achievement of certain
future revenue should not have been recognized  immediately,  but instead, only upon the
achievement of certain contingencies;  and 3) as a result of timing  differences  between
the actual issuance by the Company of shares earned and issued, the Company  should
have recorded the shares earned as of June 30, 2004 as common stock issuable and not as
common stock as the shares were not issued until July 13, 2004.

While the  Companys  management
 believes  that the  Company  did acquire  assets in a business  sense when it acquired
 the stock of Chesapeake,   these  assets,  consisting  primarily  of  Chesapeakes
 relationships  with  various  sources  of  potential  business  opportunities,  did not
meet the criteria for recognition as assets under Statement of Financial  Accounting
 Standards No. 141 (SFAS 141).  Additionally,  the acquisition could not give rise to
goodwill because  Chesapeake was in the development stage at the time of acquisition and
therefore not considered a business.

As a consequence of these
determinations,  previously issued financial statements have been restated to eliminate
the intangible asset associated with the Chesapeake  acquisition,  reverse  related
 amortization  expense,  and expense as consulting fees the cost of the transaction
 attributable  to the  cost of  issuance  of the  non-escrowed  shares  and  other
 related  direct  costs  at the time of acquisition.  Further,  the basic and diluted
weighted average shares outstanding have been adjusted to allow only for the recordation
of the shares  attributable to the issuance of the non-escrowed  shares,  which had been
earned at the time of the  transaction.  This resulted in a reduction of basic and
diluted weighted average shares  outstanding from 18,717,955 and 17,148,934 for the three
and six month periods ending June 30, 2004,  respectively,  to 16,528,400 and 16,054,157
for the same periods. For further information related to the quantitative effects of the
restatement, see note 1 of the Companys financial statements.

14

---

# Results of Operations

Three Months Ended June
30, 2004 as Compared to Three Months Ended June 30, 2003

Revenue. Revenue
for the three month period ended June 30, 2004 was approximately           $841,000 as
compared to approximately $815,000 for the three month period ended           June 30,
2003. The revenue increase was attributable to an increase in billable           hours
for its consultants in the Quarter ending June 30, 2004 as a result of
          improvements in results from the Companys sales and marketing efforts in
          this period as compared to the Quarter ended June 30, 2003.

Gross
profit.Gross profit for the three month period ended June 30, 2004, was approximately
$223,000, or 27% of revenues, an increase of approximately $4,000 from gross profit of
approximately $219,000, or 27% of revenues, for the three month period ended June 30,
2003. The increase in gross profit was materially attributable to greater revenues as a
direct result of an increase in billable hours and a stabilization in gross margins
associated with these revenues.

Sales
and marketing. Sales and marketing expenses for the three month period ended June 30,
2004, were approximately $128,000, or 15% of revenues, an increase of approximately
$16,000, as compared to approximately $112,000, or 14% of revenues, for the three month
period ended June 30, 2003. The increase was materially attributable to an increase in
sales payroll for sales and marketing efforts instituted by the Company.

General
and administrative. General and administrative expenses for the three month period
ended June 30, 2004, were approximately $708,000, or 84% of revenues, an increase of
approximately $545,000, as compared to approximately $163,000, or 20% of revenues,
incurred by the Company for the three month period ended June 30, 2003. The increase in
general and administrative expenses for the three months ended June 30, 2004, was
primarily attributable to the issuance and expensing of stock associated with the recent
acquisition of CGT and other monthly expenses associated with the merger and acquisition
efforts currently underway. Approximately $72,000 of this expense was non-recurring and
associated with a stock issuance expense for services associated with the Companys
mergers and acquisitions efforts. Approximately $430,000 was related to compensation
expense associated with the stock issuance for our acquisition of CGT.

Depreciation.      Depreciation
expenses for the three month period ended June 30, 2004, was $650,           or less than
1% of revenues, a decrease of $2,809, as compared to $3,459 of such           expenses,
or 1% of revenues, incurred by the Company for the three month period           ended
June 30, 2003. The decrease in depreciation expenses for the three month           period
ended June 30, 2004, was primarily attributable to a lesser amount of
          depreciable assets as a result of the reduced equipments requirements of a
          smaller consultant base.

Other
income (expense). Interest income (expense), net for the three month period ended June
30, 2004, was $1,837, or less than 1% of revenues, a decrease of $1,446 as compared to
$3,283, or less than 1% of revenues, for the three month period ended June 30, 2003. The
decrease in interest income for the three month period ended June 30, 2004, was primarily
attributable to lesser amounts of cash and cash equivalents along with lower short term
interest rates that were available to the Company on investments in overnight sweep
accounts.

15

---

Net
loss.As a result of the above, the net loss for the three month period ended June 30,
2004, was approximately $612,000 as compared to the net loss of approximately $56,000 for
the three months ended June 30, 2003.

Six Months Ended June 30,
2004 as Compared to Six Months Ended June 30, 2003

Revenue.  Revenue for the six month period ended June 30, 2004 was approximately
          $1,564,000 as compared to approximately $1,738,000 for the six month period
          ended June 30, 2003. The revenue decrease was attributable to a lower average
          bill rate by consultants and fewer billable hours in the six months ending June
          30, 2004 as compared to the six months ended June 30, 2003. This decrease in
          Revenue was materially due to lower levels of billable hours in the first
          quarter of 2004 as compared to the same period in 2003.

Gross
profit.Gross profit for the six month period ended June 30, 2004, was approximately
$380,000, or 24% of revenues, a decrease of approximately $85,000 from gross profit of
approximately $465,000, or 27% of revenues, for the six month period ended June 30, 2003.
The decline of gross profit was materially attributable to a reduction in gross margin as
a result of negative pricing pressures that were present within the current IT marketplace
for the Companys services within the first quarter comparative periods.

Sales
and marketing. Sales and marketing expenses for the six month period ended June 30,
2004, were approximately $230,000, or 15% of revenues, a decrease of approximately $8,000,
as compared to approximately $238,000, or 14% of revenues, for the six month period ended
June 30, 2003. The decrease was materially attributable to a reduction in expenses related
to the preparation and one time cost associated with preparing our GSA Schedule in the
first half of 2003.

General
and administrative. General and administrative expenses for the six month period ended
June 30, 2004, were approximately $858,000, or 55% of revenues, an increase of
approximately $511,000, as compared to approximately $347,000, or 20% of revenues,
incurred by the Company for the six month period ended June 30, 2003. The increase in
general and administrative expenses for the six months ended June 30, 2004, was primarily
attributable to the issuance of stock for services associated with the Companys
mergers and acquisitions activities and monthly expenses associated with the mergers and
acquisitions efforts currently underway. Approximately $430,000 was related to
compensation expense associated with the stock issuance for our acquisition of CGT.

Depreciation.          Depreciation
expenses for the six month period ended June 30, 2004, was $2,439,           or less than
1% of revenues, a decrease of $4,200, as compared to $6,639 of such           expenses,
or less than 1% of revenues, incurred by the Company for the six month           period
ended June 30, 2003. The decrease in depreciation expenses for the six           month
period ended June 30, 2004, was primarily attributable to a lesser amount           of
depreciable assets as a result of the reduced equipments requirements of a
          smaller consultant base.

16

---

Other
income (expense). Interest income (expense), net for the six month period ended June
30, 2004, was $3,583, or less than 1% of revenues, a decrease of $2,847 as compared to
$6,430, or less than 1% of revenues, for the six month period ended June 30, 2003. The
decrease in interest income (expense), net for the six month period ended June 30, 2004,
was primarily attributable to lesser amounts of cash and cash equivalents along with lower
short term interest rates that were available to the Company on investments in
interest-bearing accounts.

Net
loss.As a result of the above, the net loss for the six month period ended June 30,
2004, was approximately $707,000 as compared to the net loss of approximately $120,000 for
the six months ended June 30, 2003.

# Liquidity and Capital
Resources

The Company has, since inception,
financed its operations and capital expenditures through the sale of stock, seller notes,
convertible notes, convertible exchangeable debentures and the proceeds from the exchange
offer and exercise of the warrants related to a convertible exchangeable debenture. During
2004 and 2003 the Company has materially financed its operations with its working capital.

Cash used in operating activities for
the quarter ended June 30, 2004, was approximately $202,000 as compared to cash used in
operating activities of approximately $111,000 for the quarter ended June 30, 2003. The
increase in cash used by operations during the second quarter of 2004 as compared to the
second quarter ending 2003 was primarily a result of consulting expenses paid in the form
of stock compensation and an increase in days sales outstanding in accounts receivable.
There was no material amount of capital expenditures on property for the quarters ended
June 30, 2004 and 2003.

As of June 30, 2004, the Company had
net working capital of approximately $0.9 million. The Companys primary source of
liquidity consists of approximately $0.8 million in cash and cash equivalents and
approximately $0.5 million of accounts receivable. The Companys current liabilities
include approximately $0.4 million in accounts payable and accrued expenses.

The market for the Companys
services is experiencing an environment of constrained technology investment as a result
of an economic slowdown that has reduced new technology initiatives. As a result of this
negative environment, the demand for IT consultants ranging from software programmers to
network engineers has been negatively effected. This has reduced demand for the
Companys consultants as well has created an increase in competition from both
domestic and foreign firms for the diminished amount of new and ongoing IT initiatives.
The Company anticipates in the future a reversal of these negative events as economic
growth is restored, the constrained environment in new technology initiatives ebb, and the
Company executes it current mergers and acquisitions strategy. Therefore, the
Companys business environment is characterized by rapid technological changes,
experiences times of high growth and contraction, and material events such as mergers and
acquisitions can materially change the profile of the Company.

17

---

Since 2002, the Company has embarked
upon several new initiatives to counter the current negative environment within our
industry and expand our capacity to restore revenue 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. The
Company currently has no commitments for capital expenditures. The Companys 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.

The Company believes that its current
cash position is sufficient to meet its capital expenditure and working capital
requirements for the near term, however, the growth and technological change of the market
make it difficult for the Company 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 would occur with the
acquisition of a major new subsidiary, might also require external financing that could
include additional debt or capital. The Company is currently in discussions with financing
sources to obtain the appropriate amounts of capital necessary to acquire companies that
are being considered by the Company. There can be no assurance that additional financing,
if required, will be available on acceptable terms, if at all.

# Other

Inflation has not had a significant
effect on the Companys operations, as increased costs to the Company have generally
been offset by increased prices of services sold.

The preparation of financial
statements in conformity with US GAAP 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.

This report contains forward-looking
statements setting forth the Companys beliefs or expectations relating to future
revenues, profitability, and performance. Statements that contain words such as
believes, expects, anticipates, intends,
estimates, or similar expressions are forward-looking statements.
Forward-looking statements involve risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such forward-looking statements.
Actual results may differ materially from projected or expected results due to changes in
the demand for the Companys products and services, uncertainties relating to the
results of operations, dependence on its major customers, risks associated with rapid
technological change and the emerging services market, potential fluctuations in quarterly
results, its dependence on key employees, its ability to successfully effect acquisitions
of and mergers with other companies, and other risks and uncertainties affecting the
technology industry generally. The Company disclaims any intent or obligation to up-date
publicly these forward-looking statements, whether as a result of new information, future
events or otherwise.

18

---

# ITEM 4. CONTROLS AND
PROCEDURES

Disclosure Controls and
Procedures

An evaluation was carried out under
the supervision and with the participation of the Companys management, including our
Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(c) under the Securities
Exchange Act of 1934) as of June 30, 2004. As a result of their evaluation, our Chief
Executive Officer and Chief Financial Officer originally concluded that the Companys
disclosure controls and procedures were effective to ensure that information required to
be disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time period specified in SEC rules
and forms. However, as a result of the subsequent identification of a material weakness in
the Companys internal control over financial reporting and need for certain
restatements referred to below under Changes in Internal Control Over Financial
Reporting, such officers subsequently determined that the Companys disclosure
controls and procedures as of that date were not effective.

Changes in Internal
Control Over Financial Reporting

The Company reported in its original
Form 10-Q that there had been no changes in the Companys internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred
during the quarter ended June 30, 2004, that materially affected or was reasonably likely
to materially affect, the Companys internal control over financial reporting.
However, in connection with the subsequent evaluation by the principal executive officer
and principal financial officer of the Company required by Rule 13a-15(d) under the
Securities Exchange Act of 1934, such officers subsequently determined that the following
change had occurred that materially affected the Companys internal control over
financial reporting relating to the quarter ended June 30, 2004.

During the fourth quarter of 2004, in
connection with the Companys preparation of an S-1 filing, the Company identified a
material weakness in its internal control over financial reporting related to insufficient
technical accounting expertise within our accounting function to resolve non-routine or
complex accounting matters that occurred in connection with our acquisition of Chesapeake
Government Technologies, Inc. and the inaccurate determination of the proper accounting
treatment related to this acquisition. The material weakness in internal controls resulted
in the need to restate our financial results for the three and six month periods ending
June 30, 2004.

19

---

In order to remediate that material
weakness, we engaged a consulting firm in January 2005 with the requisite accounting
expertise, and are continuing to use the services of that firm in connection with such
complex accounting matters. That action constituted a change in the Companys
internal control over financial reporting that occurred during the first quarter of 2005.
To date, the Company has not expended any material costs, nor does it estimate it will
expend any material costs associated with engaging the accounting consultancy firm the
Company hired to assist it in its technical accounting requirements. The accounting
consultancy firm does not have any relationship with our current independent auditors.

20

---

# PART II.

# OTHER INFORMATION

# ITEM 6. EXHIBITS AND
REPORTS ON FORM 8-K.

| | (a) | Exhibits
| | --- | --------

| | 31.1A | Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ----- | ---------------------------------------------------------------------------------------------------

| | 31.2A | Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | ----- | ---------------------------------------------------------------------------------------------------

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

| | (b) | Reports
on Form 8-K
| | --- | -------------------

The
Company filed a Form 8-K on May 14, 2004 describing the acquisition of Chesapeake
Government  Technologies, Inc.

21