SECURITIES AND EXCHANGE
COMMISSION  Washington, D.C. 20549

_________________

# FORM 10-QSB

(Mark One)

||X| | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

| | For
the quarterly period endedMarch 31, 2005
| | --------------------------------------------

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 number000-23967

|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

|                                                                                  | 
|--------------------------------------------------------------------------------- | 
|Former name, former address and former fiscal year, if changed since last report.

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 an  accelerated  filer (as  defined in Rule
12b-2  under the  Securities Exchange Act of 1934).  Yes   No
X

APPLICABLE
 ONLY TO CORPORATE  ISSUERS:  Indicate the number of shares  outstanding of each of the
issuer's  classes of common stock, as of May 13, 2005: 30,780,949 shares of common
stock, $.001 par value per share.

---

Traditional Small Business
Disclosure Format:  Yes [_]  No [X]

---

WIDEPOINT CORPORATION

INDEX

|                                                                     
|---------------------------------------------------------------------
|Part I.        FINANCIAL INFORMATION                                 
|Item 1.   Condensed Consolidated Financial Statements                
|Condensed Consolidated Balance Sheets as of March 31, 2005,          
|(unaudited) and December 31, 2004 (unaudited)                        
|Condensed Consolidated Statements of Operations for the three        
|months ended March 31, 2005 and 2004 (unaudited)                     
|Condensed Consolidated Statements of Cash Flows for the three        
|months ended March 31, 2005 and 2004 (unaudited)                     
|Notes to Condensed Consolidated Financial Statements                 
|Item 2.   Management's Discussion and Analysis of Financial          
|Condition and Results of Operations                                  
|Item 3.   Controls and Procedures                                    
|Part II.         OTHER INFORMATION                                   
|Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds
|Item 4.   Submission of Matters to a Vote of Security Holders        
|Item 6.   Exhibits                                                   
|SIGNATURES                                                           
|CERTIFICATIONS                                                       

---

# PART 1. FINANCIAL
INFORMATION

# ITEM 1. CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

# WIDEPOINT CORPORATION
AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                           | March 31,   | December 31,
|-------------------------------------------------------------------------- | ----------- | ------------
|
|(unaudited)                                                                | (unaudited)
|Assets                                                                     |             |             
|Current assets:                                                            |             |             
|Cash and cash equivalents                                                  |             |             
|Accounts receivable                                                        |             |             
|Prepaid expenses and other assets                                          |             |             
|                                                                           |             |             
|Total current assets                                                       |             |             
|                                                                           |             |             
|Property and equipment, net                                                |             |             
|Goodwill                                                                   |             |             
|Intangibles                                                                |             |             
|Other assets                                                               |             |             
|                                                                           |             |             
|Total assets                                                               |             |             
|                                                                           |             |             
|Liabilities and stockholders' equity                                       |             |             
|Current liabilities:                                                       |             |             
|Accounts payable                                                           |             |             
|Accrued expenses                                                           |             |             
|Income taxes payable                                                       |             |             
|Short-term portion of deferred rent                                        |             |             
|Short-term borrowings                                                      |             |             
|Financial instruments                                                      |             |             
|                                                                           |             |             
|Total current liabilities                                                  |             |             
|                                                                           |             |             
|Long-term portion of deferred rent                                         |             |             
|Deferred income tax liability                                              |             |             
|                                                                           |             |             
|Total liabilities                                                          |             |             
|Stockholders' (deficit) equity:                                            |             |             
|Preferred stock, $0.001 par value; 10,000,000 shares authorized; 2,045,714 |             |             
|shares issued and outstanding, respectively                                |             |             
|Common stock, $0.001 par value; 110,000,000 shares authorized; 21,125,393  |             |             
|shares issued and outstanding, respectively                                |             |             
|Stock warrants                                                             |             |             
|Related party notes receivable                                             |             |             
|Additional paid-in capital                                                 |             |             
|Accumulated deficit                                                        |             |             
|                                                                           |             |             
|Total stockholders' (deficit) equity                                       |             |             
|                                                                           |             |             
|Total liabilities and stockholders' (deficit) equity                       |             |             
|                                                                           |             |             

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

1

---

# WIDEPOINT CORPORATION
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

|                                                      | Three Months Ended
March 31,
|----------------------------------------------------- | ----------------------------
|
|(unaudited)                                          
|Revenues, net                                         |                             
|Cost of sales                                         |                             
|                                                      |                             
|Gross Profit                                          |                             
|Sales and marketing                                   |                             
|General & administrative                              |                             
|Depreciation & amortization                           |                             
|                                                      |                             
|Loss from operations                                  |                             
|Other income, net:                                    |                             
|Interest income                                       |                             
|Interest expense                                      |                             
|Loss from financial instrument                        |                             
|Other                                                 |                             
|                                                      |                             
|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,
|-------------------------------------------- | ----------------------------
|
|(unaudited)                                 
|Cash flows from operating activities:        |                             
|Net loss                                     |                             
|Adjustments to reconcile net loss            |                             
|to net cash provided by operating            |                             
|activities                                   |                             
|Depreciation Expense                         |                             
|Amortization expense                         |                             
|Deferred financing costs                     |                             
|Loss from financial instruments              |                             
|Changes in assets and liabilities            |                             
|Accounts receivable                          |                             
|Prepaid expenses and other assets            |                             
|Other assets                                 |                             
|Accounts payable and accrued expenses        |                             
|                                             |                             
|Net cash provided by operating               |                             
|Activities                                   |                             
|                                             |                             
|Net cash flows used in investing activities: |                             
|Purchase of property and equipment           |                             
|                                             |                             
|Net cash flows used in investing activities  |                             
|                                             |                             
|Net cash used in financing                   |                             
|Activities                                   |                             
|Borrowings on notes payable                  |                             
|Payments on notes payable                    |                             
|Collections on related party notes           |                             
|APIC expenses                                |                             
|Proceeds from issuance of stock options      |                             
|                                             |                             
|Net cash used in financing                   |                             
|Activities                                   |                             
|                                             |                             
|Net (decrease) increase in cash              |                             
|                                             |                             
|Cash and equivalents, beginning of period    |                             
|                                             |                             
|Cash and equivalents, end of period          |                             
|                                             |                             
|Cash paid for interest                       |                             

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

3

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# WIDEPOINT CORPORATION
AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

|1. | Basis
of Presentation, Organization and Nature of Operations:
|-- | -------------------------------------------------------------

WidePoint is an information
technology (IT) services firm with established competencies in federal
government and commercial sector IT consulting services, including planning, managing and
implementing IT solutions, software and secure authentication processes, and specialized
outsourcing arrangements.Its staff consists of business and computer specialists
who help 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.

In 2004, WidePoint acquired
Chesapeake Government Technologies, Inc. (Chesapeake) and Operational Research
Consultants, Inc. (ORC) as part of WidePoints strategy to refocus our
business development initiatives toward the substantial increase in government spending on
infrastructure and automation that has been accelerated by recent geopolitical events that
have created an unprecedented need for systems and process expertise across most
government markets, federal, state and local. WidePoint intends to capitalize on the
expected growth in its target markets through its strategic acquisitions, continue rollout
of ORCs Public Key Infrastructure (PKI) initiative, and by continuing to
implement our project based enterprise strategy emphasizing industry-wide best practices
disciplines. The Company intends to continue to leverage the synergies between its newly
acquired operating subsidiaries and cross sell its technical capabilities into each
separate marketplace serviced by its respected subsidiaries.

The Company has physical locations in
Oakbrook Terrance, Illinois, Fairfax, Virginia, Alexandria, Virginia, and Chesapeake,
Virginia. The Company employees work at various client locations throughout the upper
Midwest, Texas, and Mid Atlantic areas of the United States.

In addition, 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 as a result of its
plan to expand its operations through a combination of internal growth initiatives
and merger and acquisition opportunities, the Company expects such costs to
increase.  The Company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 costs is labor related, the Company 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 the Companys proprietary methodologies, and by offsetting increases in
consultant salaries with increases in consultant fees received from its clients. The
uncertainties relating to its ability to achieve and maintain profitability, obtain
additional funding to fund its 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
selected consolidated financial information presented above. The Company believes that its
cash on hand, and available senior lending facility is adequate to finance operations
through 2005.

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

Principles of
Consolidation

The accompanying consolidated
financial statements include the accounts of 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.

4

---

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. 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 either United States federal agencies or established
companies in the following industries: manufacturing, consumer product goods, direct
marketing, healthcare and financial services. Credit is extended based on evaluation of a
customers 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. 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.

|Description                           | Balance at
Beginning of
Period | Additions
Charged to
Costs and
Expenses | Deductions | Balance at
End of
Period
|------------------------------------- | ------------------------------ | --------------------------------------- | ---------- | ------------------------
|For the quarter ended March 31, 2004, |                                |                                         |            |                         
|Allowance for doubtful accounts       |                                |                                         | $          | 18,819                  
|For the quarter ended March 31, 2005, |                                |                                        
|Allowance for doubtful accounts       |                                |                                         | $          | --                      

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, 2005 and December 31, 2004, unbilled accounts receivable totaled
$12,869 and $0, respectively.

5

---

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 history of losses nor has it
identified any specific risk of loss at March 31, 2005 or on December 31, 2004 due to termination provisions and
thus has not recorded provisions for such events.

Significant Customers

For the period ending March 31, 2005,
two customers, Tangible Software and The Department of Homeland Security, individually
represented approximately 15% and 14% of revenues, respectively. For the period ending
March 31, 2004, four customers, Abbot Laboratories, Spencer Stuart, Manpower, and Baxter
Healthcare, individually represented 18%, 14%, 13%, and 13% of revenue, respectively.

Fair value of financial
instruments  The Companys financial instruments include cash equivalents,
accounts receivable, accounts payable, short-term debt and other financial instruments
associated with the issuance of the common stock warrants attributable to the preferred
stock capital investment in the Company in October of 2004. 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
bank borrowings under its credit facility approximate fair value because the interest
rates are reset periodically to reflect current market rates.

The Companys financial
instruments also include a financial instrument in which a valuation for the warrants from
the Barron Partners, LP preferred financing agreement contained a registration rights
agreement which contained a liquidating damages provision. Accordingly, a Black Scholes
calculation was used to determine the fair value of those warrants which are classified as
a financial instrument. The Financial Instrument was marked to market at March 31, 2005.

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 March 31, 2005, two customers, Tangible Software and The
Department of Homeland Security accounted for approximately 25% and 18%, respectively of
accounts receivable. As of December 31, 2004, two customers, The Department of Homeland
Security and Tangible Software, individually represented 24% and 13% 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.

6

---

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,
|----------------------------------------------- | --------- | ------------
|
|Computers, equipment and software               |           |             
|Less- Accumulated depreciation and amortization |           |             
|                                                |           |             
|                                                |           |             
|                                                |           |             

Depreciation expense is computed
using the straight-line method over the estimated useful lives of three years.

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 Statement of Financial Accounting Standards (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 five-year period or other such shorter period as may be
required. WidePoint recorded approximately $14,000 of amortization expense for the period
ending March 31, 2005. WidePoint recorded approximately $9,700 of amortization expense for
the year ended December 31, 2004. Capitalized software costs included in Other Intangibles
at March 31, 2005 and December 31, 2004 were approximately $0.7 and $0.6 million,
respectively.

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 Statement of Financial Accounting Standards (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.

7

---

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 18,314,748 and 2,112,000 shares
of common stock outstanding at March 31, 2005 and 2004, 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.

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-BasedCompensation, using the assumptions
described in Note 8, to its stock-based employee plans.

|                                                 | Three Months ended
March 31,
|------------------------------------------------ | ----------------------------
|
|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                               |                             
|Net loss per share:                              |                             
|Basic and diluted - as reported                  |                             
|Basic and diluted - pro forma                    |                             

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 months ended March 31, 2005:

8

---

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

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

|                                                    | March 31,
2005 | December 31,
2004
|--------------------------------------------------- | -------------- | -----------------
|Borrowings under WidePoint's Senior Debt Agreement: |                |                  

On
October 25, 2004, the Company executed a senior lending agreement with RBC-Centura. The
Agreement initially provides for a $2.5 million revolving credit facility. The maturity
date of the credit facility is October 25, 2005.

The
maximum available borrowing under revolving credit facility at March 31, 2005 and December
31, 2004 was $1.8 million and $2.2 million, respectively. Borrowings under the Agreement
are collateralized by the Companys eligible contract receivables, inventory, all of
its stock in certain of our subsidiaries and certain property and equipment, and bear
interest at the Prime Rate which was 5.75% and 5% on March 31, 2005 and December 31, 2004,
respectively.

WidePoints
credit facility requires that the Company maintain specified financial covenants relating
to fixed charge coverage, interest coverage, and debt coverage, and maintain a certain
level of consolidated net worth. The weighted average borrowings under the revolving
portion of the facility and the prior agreement for the quarter ended March 31, 2005 and
during the year ended December 31, 2004, were $1.5 and $1.5 million, respectively. In
conjunction with the execution of the credit facility, the Company recorded $0.1 million
in loan origination costs, included in other assets, which have been amortized ratably
over the term of the credit facility which commenced in October of 2004 and will expire in
October of 2005.

The
total interest and finders fees paid was approximately $34,000 for the year ended
December 31, 2004. The total interest fees paid for the quarter ended March 31, 2005 was
approximately $20,000.

|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.

During
2004, WidePoint completed the acquisitions of Chesapeake Government Technologies, Inc. and
Operational Research Consultants, Inc. The Company has also capitalized software
development cost associated with its PKI initiative and has estimated the purchase price
allocation of the assets acquired and pursuant to a final valuation have allocated
estimated purchase price of the components and software capitalization of goodwill and
other intangibles as follows:

|                           
|---------------------------
|Amortized Intangible
Assets
|                           
|ORC Intangible             
|                           
|Chesapeake Intangible      
|                           
|PKI Intangible             
|                           
|Total                      
|                           

9

---

The Company has accumulated an
unamortized intangible asset related to its continued development of its PKI initiative of
approximately $403,000 and $235,000 for the quarter ended March 31, 2005 and for the year
ended December 31, 2004, respectively. The PKI initiative intangible assets are expensed in cost of revenues.

The Companys aggregate
amortization expense was approximately $97,000 and $65,000 for the quarter ending March
31, 2005 and year ending December 31, 2004, respectively.

|5. | 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 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 December 31, 2004 the
Company had net operating loss carry forwards of approximately $17,025,000 to offset
future taxable income. These carry forwards expire between 2010 and 2024. Under the
provision 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.

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

The Company is authorized to issue
110,000,000 shares of common stock, $.001 par value per share. As of March 31, 2005 and
December 31, 2004, there were 21,125,393 shares of common stock outstanding. As of March
31, 2005, 5,555,556 additional common shares have been issued and placed into escrow with
none of those shares yet having been earned under a purchase agreement between WidePoint
and ORC. The rights, preferences and privileges of holders of common stock are subject to,
and may be adversely affected by the rights of the holders of shares Series A Convertible
Preferred Stock and of any additional series of preferred stock that may be designated and
issued in the future.

Preferred Stock

Our certificate of incorporation
authorizes the Company to issue up to 10,000,000 shares of preferred stock, $0.001 par
value per share, of which 2,045,714 shares are outstanding.

Pursuant to the Certificate of
Designation of Preferences, Rights and Limitations of Series A Convertible Preferred
Stock, filed with the Secretary of State of the State of Delaware on November 9, 2004,
2,045,714 shares of the Companys preferred stock are designated as Series A
Convertible Preferred Stock having the following rights:

Each share of Series A Convertible
Preferred Stock has a conversion rate equal to $0.175 per share and is convertible into
ten shares of common stock.

The conversion of the Series A
Convertible Preferred Stock is subject to the following conditions:

10

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| |  | Subject
to waiver, holders of Series A Convertible Preferred Stock do not have the right to
convert any portion of the preferred stock to the extent that after giving effect to such
conversion, the holder (together with any affiliates of the holder), would beneficially
own in excess of 4.99% of the number of shares of the common stock outstanding
immediately after giving effect to such conversion. In the event the converted shares
when issued and combined with all other shares of common stock beneficially owned by the
holder and its affiliates equals, at any time, more than 4.99% of the total number of
then outstanding shares of common stock, then for so long as such holder and its
affiliates beneficially owns more than 4.99% of the total number of then outstanding
shares of common stock, the holder of the converted shares and its affiliates shall have
no more than 22% of the total voting power of all outstanding shares of common stock at
any time.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Holders
of WidePoints Series A Convertible Preferred Stock are entitled to receive a
liquidation preference equal to $1.75 per share in the event of the liquidation,
dissolution, or winding up of the Companys business.

Holders
of Series A Convertible Preferred Stock are not entitled to voting rights. However, unless
approved by the holders of the outstanding Series A Convertible Preferred Stock, the
Company cannot: (a) alter or change adversely the powers, preferences or rights given to
the Series A Convertible Preferred Stock or alter or amend the certificate of designation
relating to the Series A Convertible Preferred Stock, (b) authorize or create any class of
stock ranking as to dividends or distribution of assets upon a liquidation senior to or
otherwise pari passu with the Series A Convertible Preferred Stock, (c) amend the
certificate of incorporation or other charter documents in breach of the certificate of
designations, or (d) increase the authorized number of shares of Series A Convertible
Preferred Stock.

Dividends
are not payable with respect to the Series A Convertible Preferred Stock.

Shares
of Series A Convertible Preferred Stock are subject to automatic conversion generally
under the following circumstances: (i) a change in control of WidePoint, (ii) the
consummation of a public offering (with a value of at least $5 million or more) of our
common stock, (iii) upon receipt of the consent of all holders of the Series A Convertible
Preferred Stock, or (iv) in the event that the fair market value of the outstanding shares
of our common stock exceeds $100 million.

As
a result of the issuance of a registration rights agreement that contained a liquidated
damages clause, the Company is required to follow EITF 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
by the Company (see footnote 7). In light of the required accounting treatment under EITF
00-19, the entire proceeds of the issuance were allocated to warrants and as such no
proceeds have been allocated to the preferred stock issuance as of December 31, 2004.

Common Stock

On October 25, 2004, WidePoint
completed the acquisition of Operational Research Consultants, Inc., or ORC, a privately
held IT and engineering firm providing mission-critical sensitive and strategic
information security solutions to the United States Government. Pursuant to the terms of a
Purchase Agreement entered into on October 25, 2004, between the Company and the ORC
Shareholders, the Company issued 5,555,556 common shares of the Companys stock and
placed it into an escrow to be released to the ORC shareholders in the event they attain
certain performance parameters in 2004 and 2005. As of March 31, 2005 no common shares
were earned.

On April 30, 2004, the Company
closed upon the acquisition of all the issued and outstanding shares of Chesapeake,
pursuant to the terms of an Agreement and Plan of Merger, dated as of March 24, 2004.
WidePoint issued 4,082,980 shares of its common stock to stockholders of Chesapeake in
consideration for all of the issued and outstanding shares of Chesapeake owned by them. In
conjunction with this closing, the sole stockholders also entered into an escrow agreement
and deposited 3,266,384 shares of the 4,082,980 newly issued shares of WidePoint common
stock into escrow. The 3,266,384 shares of common stock placed into escrow will be
released to the Chesapeake Shareholders in the event of the satisfaction of certain
conditions set forth in the merger agreement, which provides that during the period
commencing after the closing of the merger and ending on December 31, 2005, the
3,266,384 shares of common stock will be released to the Chesapeake shareholders in a
ratio based on the amount of revenues actually received by the Company from the business
acquired from Chesapeake. The December 31, 2005 escrow expiration date may be
extended for one additional year in the event it is determined that Chesapeake has
achieved certain performance levels in the latter part of 2005. In the event that
WidePoint does not receive certain levels of revenues from the business acquired from
Chesapeake, then any of the 3,266,384 shares of common stock to which the Chesapeake
shareholders have not become entitled to receive will be returned to the Company. For the
period ending March 31, 2005, the Company released 544,397 shares from escrow to the
Chesapeake shareholders upon the filing of the Companys Form 10K with the securities
and exchange commission.

11

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Pursuant to an agreement on April 30,
2004 between the Company and Tripoint Capital Advisors, LLP, the company issued 500,000
shares of its common stock without registration under the Securities Act of 1933 for
services rendered in association with the Chesapeake acquisition. These shares were
reported at the fair value at the date of issuance.

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-year full-recourse note.

Stock Warrants

On October 27, 2004 and November 22,
2004, the Company issued warrants to purchase 30,612 and 5,556 shares of common stock,
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. 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 and
are being amortized over the life of the debt as interest expense.

Related Party Notes

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-year full-recourse, 5% interest bearing promissory note with equal annual principal
payments due, issued by each such person to the Company in the principal amount of
$60,550.00, or $181,650.00 in the aggregate (which equals $0.07 per share, being the
closing price of the Companys common stock on July 8, 2002). Amounts outstanding
under these notes are reflected as a reduction to stockholders equity until paid.

|7. | Financial
Instrument
|-- | --------------------

In October of 2004, the Company
issued warrants to purchase 10,228,571 shares of common stock to Barron Partners, LP as
part of a preferred stock financing. The warrants have a term of 5 years. The Company used
a fair-value option pricing model to value these stock warrants. The value of these
warrants has been reflected as a financial instrument in the short-term liabilities
section of the consolidated balance sheet as a result of the issuance of a registration
rights agreement that included a liquidated damages clause, which is linked to an
effective registration of such securities. Accordingly, the Company applied EITF 00-19,
Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in,
a Companys Own Stock and accounted for the warrants as a liability. In light of
the required accounting treatment under EITF 00-19, the Company is also required to value
the fair market price of the financial instrument as of March 31, 2005. The Company has
recorded a loss on the financial instrument of $1,869,356 for the period ending March 31,
2005, to adjust the difference between the fair-value of these warrants and the market
price.

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

As of December 31, 2004, ORC was the
defendant in a lawsuit entitled Fleuette v. ORC, C.A. No. 1:04-cv-1054, in the Eastern
District of Virginia, in which Renee Fleuette Gallagher, a former employee of ORC, alleged
that ORC wrongfully terminated her employment with ORC. The plaintiff sought an
unspecified amount of damages from ORC. Prior administrative and judicial proceedings
instituted by Ms. Gallagher against ORC have been dismissed or found to be without merit.
ORC did not believe that it had committed any wrong against Ms. Gallagher and therefore
vigorously defended itself in the lawsuit filed by Ms. Gallagher. As part of the
agreements entered into between WidePoint, ORC and the former stockholders of ORC at the
time of WidePoints acquisition of ORC, the former stockholders of ORC agreed to
indemnify WidePoint and ORC from any liability involving the claims by Ms. Gallagher
against ORC, including the above-captioned lawsuit. In February of 2005, a settlement was
reached between the parties and the complaints were dismissed.

12

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Other than as described above, the
Company is not involved in any material legal proceedings.

|9. | Subsequent
events
|-- | -----------------

In April and May of 2005, Barron
Partners LP converted 300,000 preferred shares into 3,000,000 common shares and
subsequently sold the 3,000,000 common shares in private transactions to three
institutional investors. Barron Partners LP also exercised warrants to purchase 2,000,000
common shares and subsequently sold the 2,000,000 common shares in private transactions to
two institutional investors. As a result of the exercise of the 2,000,000 warrants, gross
proceeds of $800,000 were realized by the Company.

13

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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, 2004.

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 is an information
technology (IT) services firm with established competencies in federal
government and commercial sector IT consulting services, including planning, managing and
implementing IT solutions, software and secure authentication processes, and specialized
outsourcing arrangements. Its staff consists of business and computer specialists who help
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.

In 2004, WidePoint acquired
Chesapeake Government Technologies, Inc. (Chesapeake) and Operational Research
Consultants, Inc. (ORC) as part of WidePoints strategy to refocus the
Companys business development initiatives toward the substantial increase in
government spending on infrastructure and automation that has been accelerated by recent
geopolitical events that have created an unprecedented need for systems and process
expertise across most government markets, federal, state and local. This market is also
growing due to the fact that many government legacy systems and processes are approaching
the end of their technologically useful lives, indicating the need for significant upgrade
and enhancement. WidePoint intends to capitalize on the expected growth in its target
markets through its strategic acquisitions, continuing rollout of the ORC Public Key
Infrastructure (PKI) initiative, and by continuing to implement our project
based enterprise strategy emphasizing industry-wide best practices disciplines.

With the addition of the customer
base and the increase in revenues attributable from the ORC acquisition, WidePoints
opportunity to leverage and expand further into the federal marketplace has improved
dramatically. ORC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 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 been augmented by our recent
acquisitions and internal growth initiatives.

As a result of these actions
WidePoints revenues for the period ending March 31, 2005 increased by approximately
385% from approximately $0.7 million for the period ending March 31, 2004 to $2.7 million
for the period ending March 31, 2005. This increase was materially due to the additional
revenues generated by WidePoints acquisition of ORC in October 2004. Due to our
recent acquisition of ORC we presently derive a relatively larger base of revenue from
contracts with U.S. government agencies and U.S. government contractors that are focused
on national security. Funding for these programs and services are generally linked to
trends in U.S. government spending in the areas of defense, intelligence and homeland
security. Leading up to and following the terrorist events of September 11, 2001, the U.S.
government substantially increased its overall defense, intelligence and homeland security
budgets. Because of the increasing focus on national security, ORCs client
relationships in this sector, and ORCs PKI initiative we anticipate that quarterly
revenues will continue at these levels or higher levels in future quarters.

14

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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.

With our recent acquisition of 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 implement the services which 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 selected consolidated financial information presented above.

# Results of Operations

Three Months Ended March
31, 2005 as Compared to Three Months Ended March 31, 2004

Revenue. Revenue
for the three month period ended March 31, 2005 was approximately           $2,670,000 as
compared to approximately $723,000 for the three month period           ended March 31,
2004. The increase in revenue was primarily attributable to a           full quarter of
revenues from our acquisition of ORC in October 2004.

Cost
of sales.Cost of sales for the three month period ended March 31, 2005, was
approximately $1,847,000, or 70% of revenues, an increase of approximately $1,281,000 over
cost of sales of approximately $566,000, or 78% of revenues, for the three month period
ended March 31, 2004. The percentage decrease in cost of sales was primarily attributable
to lower cost of sales associated with the performance of revenues at ORC. The absolute
increase in cost of sales was materially attributable to higher revenues and cost of sales
as a result of our acquisition of ORC in October 2004.

Gross
profit. As a result of the above, gross profit for the three month period ended March
31, 2005, was approximately $822,000, or 30% of revenues, an increase of approximately
$665,000 over gross profit of approximately $157,000, or 22% of revenues, for the three
month period ended March 31, 2004.

Sales
and marketing. Sales and marketing expense for the three month period ended March 31,
2005, was approximately $176,000, or 7% of revenues, an increase of approximately $74,000,
as compared to approximately $102,000, or 14% of revenues, for the three month period
ended March 31, 2004. The increase was materially attributable to the increase in sales
and marketing expenses from our acquisition of ORC in October 2004.

15

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General
and administrative. General and administrative expenses for the three month period
ended March 31, 2005, were approximately $728,000, or 27% of revenues, an increase of
approximately $578,000, as compared to approximately $150,000, or 21% of revenues,
incurred by the Company for the three month period ended March 31, 2004. The increase in
general and administrative expenses for the three months ended March 31, 2005, was
primarily attributable to an increase of approximately $578,000 in additional general and
administrative expenses associated with our acquisition of ORC in October 2004, other
general and administrative costs associated with the integration of ORC with WidePoint,
increases in our accounting and legal fees associated with our requisite filings with the
Securities and Exchange Commission, and WidePoints mergers and acquisitions efforts
currently underway.

Depreciation
and amortization. Depreciation and amortization expenses for the three month period
ended March 31, 2005, was approximately $89,000, or 3% of revenues, an increase of
$87,000, as compared approximately $1,800 of such expenses, or less than 1% of revenues,
recorded by the Company for the three month period ended March 31, 2004. The increase in
depreciation and amortization expenses for the three month period ended March 31, 2005,
was primarily attributable greater amounts of depreciable assets as a result of the
acquisition of ORC in October 2004 and an increase in amortization expense associated with
the purchase accounting related to the purchase of ORC in October 2004.

Interest
income. Interest income for the three month period ended March 31, 2005, was $770, or
less than 1% of revenues, a decrease of $1,092 as compared to $1,862, or less than 1% of
revenues, for the three month period ended March 31, 2004. The decrease in interest income
for the three month period ended March 31, 2005, 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.

Interest
expense. Interest expense for the three month period ended March 31, 2005, was
$52,783, or 2% of revenues, an increase of $52,668 as compared to $115, or less than 1% of
revenues, for the three month period ended March 31, 2004. The increase in interest
expense for the three month period ended March 31, 2005 was primarily attributable to
WidePoints increase in interest expense associated with its recent secured senior
lending facility with RBC-Centura which was utilized in association with the purchase of
ORC.

Loss
on Financial instrument. The loss from financial instrument for the three month period
ended March 31, 2005, was approximately $1,869,000. The loss on financial instrument relates to the difference between the fair value of the warrants issued to
Barron Partners, LP in connection with the preferred stock financing and the market price
of the common stock underlying such warrants at March 31, 2005. In the event that the
penalty associated with the registration rights agreement between WidePoint and Barron
Partners, LP is cancelled, the liability
associated with the warrants would be removed and applied to the value of the warrants within the
equity of WidePoint. No such loss was recognized in the quarter ended March 31, 2005.

Other.           Other
income for the three month period ended March 31, 2005, was $3,253, or           less
than 1% of revenues. Other income was primarily attributable to           finders
fees. There were no other income for the three month period ended           March 31,
2004.

Net
loss.As a result of the above, the net loss for the three month period ended March
31, 2005, was approximately $2,090,000 as compared to the net loss of approximately
$95,000 for the three months ended March 31, 2004.

# 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 2004 and the quarter ended March 31, 2005, operations were materially financed with
working capital, senior debt and the proceeds from a convertible preferred stock issuance.

16

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Cash provided by operating activities
for the quarter ended March 31, 2005, was approximately $2,300 as compared to cash
provided by operating activities of approximately $10,400 for the quarter ended March 31,
2004. The decrease in cash balances available for operating activities for the quarters
ended March 31, 2005 and 2004, respectively, were primarily a result of investments in
which we expanded our sales and general and administrative cost structure to implement our
growth strategy. Capital expenditures in property and equipment were approximately $1,000
for the quarter ended March 31, 2005, as compared to capital expenditures in property and
equipment of no material amount for the quarter ended March 31, 2004.

As of March 31, 2005, the Company had
a net working capital deficit of approximately $6.3 million. Excluding the impact of the
financial instruments associated with the issuance of the common stock warrants
attributable to the preferred stock capital investment by Barron Partners, LP in the
Company in October 2004 and discussed below, the working capital deficit would be reduced
by approximately $5.7 million, resulting in a net working capital deficit of approximately
$0.6 million. WidePoints primary source of liquidity consists of approximately $0.3
million in cash and cash equivalents and approximately $2.3 million of accounts
receivable. Current liabilities include approximately $2.0 million in accounts payable and
accrued expenses; $1.4 million in a line of credit with RBC Centura Bank; and $5.7 million
in financial instruments which may be converted to equity upon the extinguishment of the
Companys liquidation damages clause within the registration rights agreement entered
into with Barron Partners, LP.

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

Since 2002, WidePoint 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. There
are currently no commitments for capital expenditures. 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.

On October 25 and 29, 2004,
WidePoint completed financings with Barron Partners L.P. (Barron), a private
equity fund that engages in investing primarily in private investments in publicly traded
entities, for an aggregate amount of $3,580,000, under a preferred stock purchase
agreement and related agreements. Net proceeds from the financing after costs and
expenses, including fees of finders and agents, were approximately $3,030,000. WidePoint
issued an aggregate of 2,045,714 shares of its Series A Convertible Preferred Stock that
are convertible into an aggregate of 20,457,143 shares of its Common Stock at a conversion
rate equal to $0.175 per share. In addition, WidePoint issued to Barron warrants to
purchase up to an additional 10,228,571 shares of its Common Stock at an exercise price of
$0.40 per common share. In April and May, 2005, Barron exercised warrants for 2,000,000
shares, providing $800,000 in gross proceeds to the Company.

Pursuant to the registration rights
agreement, between Barron and WidePoint, related to the stock issuances described in the
preceding paragraph, WidePoint filed a registration statement on January 5, 2005, covering
the resale of the shares of Common Stock issuable upon conversion and/or exercise of the
Series A Convertible Preferred Stock and the warrants issued to Barron. If our
registration statement is not declared effective by the Securities and Exchange Commission
by April 23, 2005 and thereafter kept effective through October 20, 2007, subject to
permissible blackout periods and registration maintenance periods, then WidePoint will be
required to pay Barron a maximum penalty of up to $20,000 for each month the registration
statement is not effective. As of May 16, 2005, the registration statement has not been declared effective.

WidePoint believes that its current
cash position and line of credit 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 ORC or any other major new subsidiaries, might require external financing
that could include additional debt or equity capital. The Company obtained a one year
senior line of credit from RBC-Centura Bank in October 2004 for up to $2.5 million
dollars, collateralized against accounts receivables, that also allows for the expansion
of this line of credit up to $5.0 million upon the successful completion of an additional
acquisition. The interest rate on the line of credit is variable, and is based upon the
prime lending rate. Approximately $1.2 million dollars of the senior line of credit was
utilized in the acquisition of ORC. In addition, the Company raised approximately $3.6
million dollars in connection with the aforementioned equity investments by Barron
Partners, LP, that were used in the acquisition of ORC. 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.

17

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# Off-Balance Sheet
Arrangements

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

# ITEM 3. CONTROLS AND
PROCEDURES.

An evaluation was carried out under
the supervision and with the participation of the Companys management, including its
Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of the
Companys disclosure controls and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934) as of March 31, 2005. As a result of such evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that the Companys
disclosure controls and procedures are 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 periods specified in the
Securities and Exchange Commission rules and forms. In its efforts to continually monitor
and improve its controls and procedures, the Company has identified a material weakness in
the design of our internal controls due to insufficient technical accounting expertise
within the accounting function to resolve non-routine or complex accounting matters such
as occurs with a material acquisition such as we encountered in our recent acquisition of
Operational Research Consultants, Inc. This weakness facilitated the requirement for
additional review time which subsequently led to the late filing of the Companys
most recent 10-K filing. The Company is currently working to augment its accounting staff
with resources to assist it in complex non-routine accounting issues as a result of events
such as mergers and acquisitions. Otherwise, there were no other changes in the
Companys internal control over financial reporting that occurred during the period
ended March 31, 2005, that has materially affected and is reasonably likely to materially
affect, the Companys internal control over financial reporting.

18

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# PART II.

# OTHER INFORMATION

# ITEM 2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In October 2004, WidePoint issued to
Barron Partners, LP warrants to purchase up to an additional 10,228,571 shares of its
Common Stock at an exercise price of $0.40 per common share. In April and May, 2005,
Barron exercised warrants to purchase 2,000,000 shares of common stock, providing $800,000
in gross proceeds to the Company. The Companys sale of shares to Barron upon
exercise of such warrants was effected by the Company without registration under the
Securities Act of 1933 in reliance upon the private offering exemption under section 4(2)
thereof.

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

The information called for by this
item is set forth in Item 4 of the Companys Annual Report on Form 10-K for the year
ended December 31, 2004.

# ITEM 6. EXHIBITS.

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

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

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

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

19

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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 16, 2005 | /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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