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

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# FORM 10-Q

(Mark One)

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

| |  | For the
quarterly period ended March 31, 2007
| |  | ---------------------------------------------

OR

|[    ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE          SECURITIES
EXCHANGE ACT OF 1934
|------ |  | -------------------------------------------------------------------------------------------------

| |  | For the
transition period from __________________________ to __________________________
| |  | ---------------------------------------------------------------------------------------

Commission file number
000-23967

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

|                                |                                  
|------------------------------- | ---------------------------------
|Delaware                        | 52-2040275                       
|(State or other jurisdiction of | (IRS Employer Identification No.)
|incorporation or organization)  |                                  

|                                                                                    |           
|----------------------------------------------------------------------------------- | ----------
|One Lincoln Centre, 18W140 Butterfield Road, Suite 1100, Oakbrook Terrace, Illinois | 60181     
|(Address of principal executive offices)                                            | (Zip Code)

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

Indicate
by check whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.   Yes 
   NoX

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer (as defined in Rule 12b-2 under the Securities Exchange Act of
1934).

Large accelerated filer [   ]
       Accelerated filer [ X ]      
Non-accelerated filer [   ]

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

As of May 7, 2007, 52,532,699 shares
of common stock, $.001 par value per share, were outstanding.
____________________________________

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WIDEPOINT CORPORATION

INDEX

|           |                                                                                  |         
|---------- | -------------------------------------------------------------------------------- | --------
|           |                                                                                  | Page No.
|Part I.    | FINANCIAL INFORMATION                                                            |         
|Item 1.    | Condensed Consolidated Financial Statements                                      |         
|           | Condensed Consolidated Balance Sheets as of March 31, 2007 (unaudited) and       |         
|           | December 31, 2006 (unaudited)                                                    | 1       
|           | Condensed Consolidated Statements of Operations for the three months ended March |         
|           | 31, 2007 and 2006 (unaudited)                                                    | 2       
|           | Condensed Consolidated Statements of Cash Flows for the three months ended March |         
|           | 31, 2007 and 2006 (unaudited)                                                    | 3       
|           | Notes to Condensed Consolidated Financial Statements                             | 4       
|Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of       |         
|           | Operations                                                                       | 15      
|Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                       | 21      
|Item 4.    | Controls and Procedures                                                          | 21      
|Part II.   | OTHER INFORMATION                                                                |         
|Item 1A.   | Risk Factors                                                                     | 22      
|Item 6.    | Exhibits                                                                         | 23      
|SIGNATURES |                                                                                  | 24      

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# PART 1. FINANCIAL
INFORMATION

|ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
|------- | --------------------------------------------

# WIDEPOINT CORPORATION
AND SUBSIDIARIES  CONDENSED CONSOLIDATED
BALANCE SHEETS

|Consolidated Balance Sheets                                    | March 31,2007 | December 31,2006
|-------------------------------------------------------------- | ------------- | ----------------
|                                                               | (unaudited)  
|Assets                                                         |               |                 
|Current assets:                                                |               |                 
|Cash and cash equivalents                                      |               |                 
|Accounts receivable                                            |               |                 
|Prepaid expenses and other assets                              |               |                 
|                                                               |               |                 
|Total current assets                                           |               |                 
|                                                               |               |                 
|Property and equipment, net                                    |               |                 
|Goodwill                                                       |               |                 
|Intangibles, net                                               |               |                 
|Other assets                                                   |               |                 
|                                                               |               |                 
|Total assets                                                   |               |                 
|                                                               |               |                 
|Liabilities and stockholders' equity                           |               |                 
|Current liabilities:                                           |               |                 
|Accounts payable                                               |               |                 
|Accrued expenses                                               |               |                 
|Deferred revenue                                               |               |                 
|Short-term portion of deferred rent                            |               |                 
|Short-term portion of capital lease obligation                 |               |                 
|                                                               |               |                 
|Total current liabilities                                      |               |                 
|                                                               |               |                 
|Long-term portion of deferred rent                             |               |                 
|Capital lease obligation, net of current portion               |               |                 
|                                                               |               |                 
|Total liabilities                                              |               |                 
|Stockholders' equity:                                          |               |                 
|Preferred stock, $0.001 par value; 10,000,000 shares           |               |                 
|authorized; 0 and 195,214 shares issued and outstanding,       |               |                 
|respectively, liquidation value $3,416,245                     |               |                 
|Common stock, $0.001 par value; 110,000,000 shares authorized; |               |                 
|52,522,699 shares and 50,494,759 shares                        |               |                 
|issued and outstanding, respectively                           |               |                 
|Stock warrants                                                 |               |                 
|Additional paid-in capital                                     |               |                 
|Accumulated deficit                                            |               |                 
|                                                               |               |                 
|Total stockholders' equity                                     |               |                 
|                                                               |               |                 
|Total liabilities and stockholders' equity                     |               |                 
|                                                               |               |                 

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

1

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                       | Three Months Ended
March 31,
|------------------------------------------------------ | ----------------------------
|
|
|Revenues, net                                          |                             
|Cost of sales (including amortization and depreciation |                             
|of $110,049 and $101,837, respectively)                |                             
|                                                       |                             
|Gross profit                                           |                             
|Sales and marketing                                    |                             
|General & administrative                               |                             
|Depreciation expense                                   |                             
|                                                       |                             
|Loss from operations                                   |                             
|Interest income                                        |                             
|Interest expense                                       |                             
|                                                       |                             
|Net loss before income tax                             |                             
|Income tax benefit, net                                |                             
|                                                       |                             
|Net loss                                               |                             
|                                                       |                             
|Basic and diluted net loss per share                   |                             
|                                                       |                             
|Basic and diluted weighted average shares outstanding  |                             

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

2

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

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

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

3

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES

# NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

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

WidePoint Corporation
(WidePoint or the Company) is a technology-based provider of
product and services to both the government sector and commercial markets. We specialize
in providing systems engineering, information technology services and information
assurance in the form of identity management services. Our subsidiary, Operational
Research Consultants, Inc. (ORC), is the leading provider of E-Authentication federal
credential and federal compliant Public Key Infrastructure (PKI) managed services to the
federal government. We intend to grow over the next few years through a combination of
organic growth, the acquiring of selective strategic assets or acquisitions, and by
operational efficiencies among our subsidiaries.

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

On October 25, 2004, we completed the
acquisition of ORC. ORC specializes in IT integration and secure authentication processes
and software, and providing services to the United States Government. ORC has been at the
forefront of implementing PKI technologies. PKI technology is rapidly becoming the
technology of choice to enable security services within and between different computer
systems utilized by various agencies and departments of the U.S. Government. Based on
asymmetric key cryptography, PKI technology uses a class of algorithms in which a user can
receive two electronic keys, consisting of a public key and a private key, to encrypt any
information and/or communication being transmitted to or from the user within a computer
network and between different computer networks. The user provides his or her public key
to any and all desired persons or entities. The user does not share the private key with
anyone else. The public key will encrypt all information and/or communication from any
sender and the private key will allow only the holder of the private key to unlock and
decrypt such information and/or communication. Thus, the algorithms used in PKI
technologies help to achieve authentication of users and information, integrity of all
data and communications, non-repudiation or rejection of data and communications, and
support confidentiality of data and communications. PKI also speeds up and simplifies the
delivery of products and services by providing electronic approaches to processes that
historically have been paper based. These electronic solutions depend on PKI for
identification and authentication; data integrity; confidentiality of information and
transactions; and non-repudiation to facilitate mission-related transactions internal to
an organization and with external organizations. ORC is authorized to issue all
permissible certificate types and services in accordance with Defense Information Systems
Agency and National Security Agency standards, necessary for the interoperable, secure
exchange of information between U.S. Governmental agencies, contractors, and international
allies such as members of NATO.

In 2005 and 2006, WidePoint focused
on the consolidation of its recent acquisition of ORC, accelerating the rollout of the ORC
E-Authentication and PKI identity management initiatives, and continuing to implement our
project based enterprise strategy, emphasizing our industry-wide best practices
disciplines. With the addition of the customer base and the increase in revenues
attributable to the ORC acquisition, WidePoints opportunity to leverage and expand
further into the federal marketplace has improved dramatically. ORCs past client
successes, top facility security clearances, security personnel expertise, and additional
breadth of management talent have expanded our reach into markets that previously were not
accessible to WidePoint. We intend to continue to market and sell our technical
capabilities into the governmental and commercial marketplace. Further, we are continuing
to actively search out new synergistic acquisitions that we believe may further enhance
our present base of business and service offerings, which has been augmented by our recent
acquisition of ORC and our internal growth initiatives.

4

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The Company has physical locations in
Oakbrook Terrace, 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.

The accompanying condensed
consolidated financial statements and related notes of the Company should be read in
conjunction with the consolidated financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2006. These
condensed consolidated financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain information
and footnote disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. These condensed consolidated financial
statements are unaudited but, in the opinion of management, reflect all material
adjustments necessary to present fairly the financial position, results of operations and
cash flows of the Company for the periods presented. All such adjustments were of a
normal, recurring nature. The results of operations for such interim periods are not
necessarily indicative of the results of operations for the full year.

# 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 inter-company amounts have been eliminated.

Use of Estimates

The preparation of consolidated
financial statements in conformity with accounting principles generally accepted in the
United States 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
consolidated financial statements. The Company maintains cash and cash equivalents with
various major financial institutions. Included in the March 31, 2007 cash balances was
$2,437,003 in interest bearing balances in two banks, mostly in excess of federally
insured amounts, as compared to $1,924,324 in interest bearing balances in one bank for
December 31, 2006. The Company places its temporary cash investments with high
credit-quality financial institutions, and as a result, the Company believes that no
significant credit risk exists with respect to these cash investments.

Accounts Receivable

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

5

---

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, 2006, |                                |                                         |            |                         
|Allowance for doubtful accounts       |                                |                                         | $          | --                      
|For the quarter ended March 31, 2007, |                                |                                        
|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, 2007 and December 31, 2006, unbilled accounts receivable totaled
$248,576 and $354,123, respectively.

Revenue Recognition

The majority of the Companys
revenues are derived from cost-plus, or time-and-materials contracts. Under cost-plus
contracts, revenues are recognized as costs are incurred and include an estimate of
applicable fees earned. For time-and-material contracts, revenues are computed by
multiplying the number of direct labor-hours expended in the performance of the contract
by the contract billing rates and adding other billable direct costs. In the event of a
termination of a contract, all billed and unbilled amounts associated with those task
orders where work has been performed would be billed and collected. The termination
provisions of the contract would be accounted for at the time of termination. Any deferred
and/or amortization cost would either be billed or expensed depending upon the termination
provisions of the contract. Further, the Company has had no material history of losses nor
has it identified any material specific risk of loss at March 31, 2007 or on December 31,
2006 due to termination provisions and thus has not recorded provisions for such events.

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

Significant Customers

For the quarter ended March 31, 2007,
one customer, the Defense Information Security Agency (DISA), represented approximately
24% of revenues. Due to the nature of our business and the relative size of certain
contracts, which are entered into in the ordinary course of business, the loss of any
single significant customer could have a material adverse effect on results. For the
quarter ended March 31, 2006, one customer, Baxter Healthcare Corporation, individually
represented approximately 10% of revenues.

Fair value of financial
instruments

The Companys financial instruments include cash equivalents,
accounts receivable, accounts payable, and 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.

6

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Concentrations of Credit
Risk

Financial instruments potentially
subject the Company to credit risk, which consist of cash and cash equivalents and
accounts receivable. As of March 31, 2007, one customer, Defense Information Security
Agency (DISA), accounted for approximately 24% of accounts receivable. As of December 31,
2006, one customer, Headquarters Cryptologic Systems Group (HQ CPSG), represented 54% of
accounts receivable.

Income Taxes

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

Property and Equipment

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

|                                                | March 31,
2007 | December 31,
2006
|----------------------------------------------- | -------------- | -----------------
|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 SFAS No. 86, Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed. For projects fully funded by the Company,
significant development costs are capitalized from the point of demonstrated technological
feasibility until the point in time that the product is available for general release to
customers. Once the product is available for general release, capitalized costs are
amortized based on units sold, or on a straight-line basis over a six-year period or other
such shorter period as may be required. WidePoint recorded approximately $14,000 of
amortization expense for PKI-I and $31,000 for PKI-II for the three month period ending
March 31, 2007. WidePoint recorded approximately $183,000 of amortization expense for
PKI-I and PKI-II for the year ended December 31, 2006. Capitalized software costs included
in Other Intangibles at March 31, 2007 and December 31, 2006 were approximately $0.6
million and $0.7 million, respectively.

7

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Goodwill, Other
Intangible Assets, and Long-Lived Assets

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

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

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

Basic and Diluted Net
Earnings (Loss) Per Share

Basic earnings or loss per share
includes no dilution and is computed by dividing net earnings or loss by the
weighted-average number of common shares outstanding for the period. Diluted earnings or
loss per share includes the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock. The
treasury stock effect of the conversion of preferred stock to common stock, options and
warrants to purchase 6,293,514 and 6,779,233, shares of common stock outstanding for the
three months ended March 31, 2007 and 2006, respectively, has not been included in the
calculation of the net loss per share as such effect would have been anti-dilutive.

Stock-based compensation

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

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

The amount of compensation expense
recognized under SFAS 123(R) during the three months ended March 31, 2007 and 2006,
respectively, under our plans was comprised of the following:

8

---

|                                          | Three Months ended
|----------------------------------------- | ------------------
|                                          | March 31, 2007    
|General and administrative expense        |                   
|Share-based compensation before taxes     |                   
|Related income tax benefits               |                   
|Share-based compensation expense          |                   
|Net share-based compensation expenses per |                   
|basic and diluted common share            |                   

Since we have cumulative operating
losses as of March 31, 2007 for which a valuation allowance has been established, we
recorded no income tax benefits for share-based compensation arrangements. 
Additionally, no incremental tax benefits were recognized from stock options exercised
during the quarter ended March 31, 2007, which would have resulted in a reclassification
to reduce net cash provided by operating activities with an offsetting increase in net
cash provided by financing activities.

The fair value of each option award
is estimated on the date of grant using a Black-Scholes option pricing model.
Expected volatilities are based on the historical volatility of our common stock. The
expected term of options granted is based on analyses of historical employee termination
rates and option exercises. The risk-free interest rates are based on the U.S. Treasury
yield for a period consistent with the expected term of the option in effect at the time
of the grant.  Share-based compensation expense recognized during the period is based
on the value of the portion of share-based payment awards that is ultimately expected to
vest during the period.  The estimated forfeiture rates are based on analyses of
historical data, taking into account patterns of involuntary termination and other
factors.  A summary of the option activity under our plans during the quarter ended
March 31, 2007 is presented below:

|                                     | # of Shares | Weighted average
Grant date fair value
per share
|------------------------------------ | ----------- | ------------------------------------------------
|NON -VESTED                          |             |                                                 
|Non-vested at January 1, 2007        |             |                                                 
|Granted                              |             |                                                 
|Vested                               |             |                                                 
|Forfeited                            |             |                                                 
|Non-vested at March 31, 2007         |             |                                                 
|OUTSTANDING AND EXERCISABLE          |             |                                                 
|Total outstanding at January 1, 2007 |             |                                                 
|Issued                               |             |                                                 
|Cancelled                            |             |                                                 
|Exercised                            |             |                                                 
|Total outstanding at March 31, 2007  |             |                                                 
|Total exercisable at March 31, 2007  |             |                                                 

9

---

The aggregate remaining contractual
lives in years for the options outstanding and exercisable on March 31, 2007 was 4.04 and
3.77, respectively.

Aggregate intrinsic value represents
total pretax intrinsic value (the difference between WidePoints closing stock price
on March 31, 2007 and the exercise price, multiplied by the number of in-the-money
options) that would have been received by the option holders had all option holders
exercised their options on March 31, 2007. This amount changes based on the fair market
value of WidePoints stock. The total intrinsic value of options outstanding as of
March 31, 2007 was $10,297,767. The total intrinsic value of options exercisable on March
31, 2007 was $9,964,507. The total intrinsic value of options exercised for the first
quarter of fiscal 2007 was $111,088. The Company issues new shares of common stock upon
the exercise of stock options.

At March 31, 2007, 4,884,738 shares
were available for future grants under the Companys 1997 Stock Compensation Plans.
This includes options for 1,012,150 shares previously issued and cancelled under the
Companys 1997 Stock Compensation Plans. This does not include 3,999,999 warrants
granted and vested to members of the senior management team that were not issued under the
Companys 1997 Stock Compensation Plans.

At March 31, 2007, the Company had
approximately $300,000 of total unamortized compensation expense, net of estimated
forfeitures, related to stock option plans that will be recognized over the weighted
average period of 4.04 years.

# 3.    Debt

As of December 31, 2006 and March 31,
2007, the Company maintained no outstanding balances under our senior lending agreement
with RBC-Centura Bank, which expired on June 1, 2006. The senior lending agreement was
executed on October 25, 2004 and had a maturity date of October 25, 2005, which was
extended until June 1, 2006 at which time it expired. The Agreement provided for a $2.5
million revolving credit facility. Borrowings under the Agreement were collateralized by
the Companys eligible contract receivables, inventory, all of its stock in certain
of our subsidiaries and certain property and equipment, and bore interest at the prime
rate.

WidePoints credit facility
required 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. As of and during the quarter ended March 31, 2006 and during the
year ended December 31, 2006, WidePoint was either in compliance with each of these
financial covenants, received waivers, or was allowed to continue to utilize the credit
facility through June 1, 2006. There were no weighted average borrowings under the
revolving portion of the facility during the quarters ended March 31, 2007 and March 31,
2006. There were no interest fees paid during the quarters ended March 31, 2007 and 2006.

WidePoint has been provided a term
sheet to provide a line of credit for up to $2.0 million under a revolving credit facility
by Cardinal Bank for which the Company is presently undergoing a collateral review by
Cardinal Bank, prior to initiating the line of credit. If completed, the line of credit
will be collateralized by the Companys eligible accounts receivable, inventory, all
of its stock in certain of our subsidiaries and certain property and equipment, and bear
interest at the prime rate less 0.25%. The credit facility will maintain specific financial
covenants related to working capital levels and consolidated net worth and be for a period
of one year.

10

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# 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
acquisition of Operational Research Consultants, Inc (ORC). The Company has
also capitalized software development costs associated with its PKI initiative,
established the purchase price allocation of the assets acquired and allocated the
purchase price of the components and software capitalization of goodwill and other
intangibles as follows:

|Amortized Intangible Assets | As of March 31, 2007
|--------------------------- | --------------------
|                            |                     
|(1)                         |                     
|                            |                     
|                            |                     
|(2)                         |                     
|                            |                     
|(3)                         |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     
|                            |                     

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

11

---

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

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

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

There were no amounts of research and
development assets acquired during the quarter ended March 31, 2007 nor any written-off in
the period.

There were no changes in the carrying
amount of goodwill for the quarter ended March 31, 2007.

The goodwill acquired is associated
with the acquisition of ORC in October of 2004. No impairment was required as of March 31,
2007.

# 5.    Income Taxes

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

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

As of March 31, 2007, the
Company had net operating loss carry forwards of approximately $21 million to offset
future taxable income. These carry forwards expire between 2010 and 2026. 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. Upon review and analysis by the Company we have
concluded that no FIN 48 effects are present as of March 31, 2007 and our tax position has
not materially changed since December 31, 2006.

# 6.    Stockholders
Equity

The Company is authorized to issue
110,000,000 shares of common stock, $.001 par value per share. During the quarter ended
March 31, 2007 1,952,140 shares of common stock were issued as the result of the
conversion of 195,214 Preferred Shares by Barron Partners LP, and 75,800 shares of common
stock were issued as the result of the exercise of employee stock options for 75,800
shares. As of March 31, 2007 there were 52,522,699 shares of common stock outstanding. 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 of Series A Convertible
Preferred Stock and of any additional series of preferred stock that may be designated and
issued in the future.

12

---

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 0 and 195,214 shares were outstanding at March 31, 2007 and
December 31, 2006, respectively. Preferred stock of 195,214 shares were converted during
the quarter ended March 31, 2007 into 1,952,140 shares of Common Stock.

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 attained
certain performance parameters in 2004 and 2005. As of December 31, 2005, no common shares
were earned and the 5,555,556 shares were returned to the Company and cancelled during the
second quarter of 2006.

On April 30, 2004, the Company closed
upon the acquisition of all the issued and outstanding shares of Chesapeake Government
Technologies, Inc. (Chesapeake), pursuant to the terms of an Agreement and
Plan of Merger, dated as of March 24, 2004. This transaction was accounted for as a
consulting arrangement because Chesapeake did not meet the definition of a business under
FAS 141. 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 Chesapeake 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 were not recorded in equity at the time of the acquisition and were only to be
released to the Chesapeake shareholders in the event of the satisfaction of certain
conditions set forth in the merger agreement, which provided 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 would be released to the Chesapeake shareholders in a
ratio based on the amount of revenues actually received by the Company from the business
acquired as a result of activities originated and consummated by Chesapeake. The December
31, 2005 escrow expiration date could have been extended for one additional year in the
event that it was determined that Chesapeake had achieved certain performance levels in
the latter part of 2005, which did not occur. All shares earned were charged to expense
through December 31, 2006. Of the 3,266,384 shares of common stock held in escrow, 816,596
and 1,905,390 were released in 2005 and 2006, respectively, with the 544,398 remaining
shares cancelled in 2006.

Stock Warrants

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

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

# 7.    Segment reporting

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

13

---

During 1998, the Company adopted SFAS
No. 131 and until December 31, 2005 the Company was comprised of a single segment, which
was comprised of our consulting services segment within our Commercial and Federal
Government Marketplaces. As of January 1, 2006, the Company added a second segment, which
consists of PKI credentialing and managed services. The PKI credentialing and managed
services segment provides PKI credentialing and managed services to United States federal
agencies and federal contractors as a result of regulatory compliance requirements.

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

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

|                                                 | Three Months Ended
March 31
|------------------------------------------------ | ---------------------------
|
|Consulting services:                             |                            
|Revenues                                         |                            
|Operating income                                 |                            
|Total assets                                     |                            
|PKI Credentialing and Managed Services:          |                            
|Revenues                                         |                            
|Operating loss (includes amortization expense of |                            
|$45,838 and $45,838, respectively)               |                            
|Total assets                                     |                            
|Credentials issued                               |                            
|Total Company                                    |                            
|Revenues                                         |                            
|Operating loss                                   |                            
|Depreciation expense                             |                            
|Interest income (expense), net                   |                            
|Other income                                     |                            
|Net loss                                         |                            
|Total Corporate assets                           |                            

(1)    
          Includes $55,270 of amortization expense in cost of sales associated with the
          purchase of ORC, which is not allocated among the segments and includes $257,054
          in unallocated corporate costs in general and administrative expense.

(2)    
          Includes $55,270 of amortization expense in cost of sales associated with the
          purchase of ORC, which is not allocated among the segments and includes $208,448
          in unallocated corporate costs in general and administrative expense.

14

---

# 8.   Litigation

The Company is not involved in any
material legal proceedings.

# 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, 2006.

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

# Overview

WidePoint Corporation
(WidePoint or the Company) is a technology-based provider of
products and services to both the government sector and commercial markets. We specialize
in providing systems engineering, information technology services and information
assurance in the form of identity management services. Our subsidiary, Operational
Research Consultants, Inc. (ORC), is the leading provider of E-Authentication
federal credentialing and federal compliant Public Key Infrastructure (PKI)
managed services to the federal government. We intend to grow over the next few years
through a combination of organic growth, the acquiring of selective strategic assets and
by operational efficiencies among our subsidiaries.

On October 25, 2004, we completed the
acquisition of ORC. ORC specializes in IT integration and secure authentication processes
and software, and providing services to the United States Government. ORC has been at the
forefront of implementing Public Key Infrastructure (PKI) technologies. PKI
technology is rapidly becoming the technology of choice to enable security services within
and between different computer systems utilized by various agencies and departments of the
U.S. Government. Based on asymmetric key cryptography, PKI technology uses a class of
algorithms in which a user can receive two electronic keys, consisting of a public key and
a private key, to encrypt any information and/or communication being transmitted to or
from the user within a computer network and between different computer networks. The user
provides his or her public key to any and all desired persons or entities. The user does
not share the private key with anyone else. The public key will encrypt all information
and/or communication from any sender and the private key will allow only the holder of the
private key to unlock and decrypt such information and/or communication. Thus, the
algorithms used in PKI technologies help to achieve authentication of users and
information, integrity of all data and communications, non-repudiation or rejection of
data and communications, and support confidentiality of data and communications. PKI also
speeds up and simplifies the delivery of products and services by providing electronic
approaches to processes that historically have been paper based. These electronic
solutions depend on PKI for identification and authentication; data integrity;
confidentiality of information and transactions; and non-repudiation to facilitate
mission-related transactions internal to an organization and with external organizations.
ORC is currently one of only a few organizations that has been designated by the United
States Government as fully compliant to issue certificates for the U.S. Government. As
such, ORC is authorized to issue all permissible certificate types and services in
accordance with Defense Information Systems Agency and National Security Agency standards,
necessary for the interoperable, secure exchange of information between U.S. Governmental
agencies, contractors, and international allies such as members of NATO.

15

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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 activity and internal growth initiatives.

As a result of these actions
WidePoints total revenues increased by approximately $0.2 million from $2.7 million
for the three months ended March 31, 2006 to $2.9 million for the three months ended March
31, 2007.

Our PKI credentialing and managed
services segment experienced revenue growth of approximately 40% with revenues increasing
approximately $87,000 from approximately $223,000 for the three months ended March 31,
2006, to approximately $310,000 for the three months ended March 31, 2007, as a result of
continuing adoption of several of the Federal Governments mandates under Homeland
Security Presidential Directive No. 12 (HSPD-12) and the External Certificate
Authority (ECA) program by the Department of Defense. We issued 2,843 PKI
electronic identification credentials (PKI credentials) to our customers for
the three months ended March 31, 2007 as compared to 1,733 PKI credentials for the three
months ended March 31, 2006. We anticipate that PKI credential sales will continue to grow
as our PKI credentialing and managed services segment expands as we fulfill recent
contract wins and we witness the further adoption of the ECA program and the HSPD-12
program is increasingly adopted by the Federal Government agencies and departments.

Our consulting services segment
experienced a slight increase in revenues of approximately $81,000 from approximately
$2,461,000 for the three months ended March 31, 2006 as compared to approximately
$2,542,000 for the three months ended March 31, 2007. The slight increase in revenues for
the three months ended March 31, 2007 as compared to the three months ended March 31, 2006
was materially the result of decreases in our commercial consulting services as we
experienced difficulties in identifying and deploying consultants suitable for new project
opportunities, partially offset by slight increases in revenues by our government
consulting services clients.

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

16

---

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 the services that we offer.

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

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

# Results of Operations

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

Revenues,
net.Revenues for the three month period ended March 31, 2007 were approximately
$2,852,000 as compared to approximately $2,684,000 for the three month period ended March
31, 2006. The increase in revenues was primarily attributable to growth within our PKI
credentialing and managed services segment augmented by a slight increase within our
consulting services segment. Our PKI credentialing and managed services segment
experienced revenue growth of approximately 40% with revenues increasing approximately
$87,000 from approximately $223,000 for the quarter ended March 31, 2006, to approximately
$310,000 for the quarter ended March 31, 2007. We issued 2,843 PKI credentials for the
three months ended March 31, 2007, as compared to 1,733 PKI credentials for the three
months ended March 31, 2006. We anticipate that PKI credentials sales should continue to
increase as we fulfill recent contract wins and we witness the continued adoption of the
ECA program by the Department of Defense and the HSPD-12 program is further rolled out and
adopted by the Federal Government agencies and departments.

Cost
of sales.Cost of sales for the three month period ended March 31, 2007, was
approximately $2,197,000, or 77% of revenues, an increase of approximately $230,000 from
cost of sales of approximately $1,967,000, or 73% of revenues, in the three month period
ended March 31, 2006. The increase in cost of sales was primarily attributable to higher
fringe benefit and applied overhead costs, along with slightly higher direct labor costs
and a slightly higher mix of software sales in support of our consulting services that
were recognized during the quarter ending March 31, 2007.

Gross
profit. As a result of the above, gross profit for the three month period ended March
31, 2007, was approximately $656,000, or 23% of revenues, a decrease of approximately
$61,000 from gross profit of approximately $717,000, or 27% of revenues, for the three
month period ended March 31, 2006.

17

---

Sales
and marketing. Sales and marketing expense for the three month period ended March 31,
2007, was approximately $203,000, or 7% of revenues, a decrease of approximately $1,000,
as compared to approximately $204,000, or 8% of revenues, for the three month period ended
March 31, 2006. The slight decrease was materially attributable to lesser direct expenses
incurred during the quarter ending March 31, 2007.

General
and administrative. General and administrative expenses for the three month period
ended March 31, 2007, were approximately $841,000, or 29% of revenues, an increase of
approximately $61,000, as compared to approximately $780,000, or 29% of revenues, incurred
by the Company for the three month period ended March 31, 2006. The increase in general
and administrative expenses for the three months ended March 31, 2007, was primarily
attributable to approximately $55,000 in non-recurring legal expenses associated with
contract and document reviews during quarter ending March 31, 2007.

Depreciation.   Depreciation
expense for the three month period ended March 31, 2007, was           approximately
$16,000, or less than 1% of revenues, an increase of approximately           $9,000, as
compared to approximately $7,000 of such expenses, or less than 1% of           revenues,
recorded by the Company for the three month period ended March 31,           2006. The
increase in depreciation expense for the three month period ended           March 31,
2007, was primarily attributable to greater amounts of depreciable           assets.

Interest
income. Interest income for the three month period ended March 31, 2007, was
approximately $32,000, or less than 1% of revenues, an increase of approximately $14,000
as compared to approximately $18,000, or less than 1% of revenues, for the three month
period ended March 31, 2006. The increase in interest income for the three month period
ended March 31, 2007, was primarily attributable to greater amounts of cash and cash
equivalents along with higher short-term interest rates that were available to the Company
on investments in money market accounts.

Interest
expense. Interest expense for the three month period ended March 31, 2007, was $3,305,
or less than 1% of revenues, an increase of $1,709 as compared to $1,596, or less than 1%
of revenues, for the three month period ended March 31, 2006. The increase in interest
expense for the three month period ended March 31, 2007 was primarily attributable to an
increase in interest expense associated with capital leases that the Company entered into
in 2006.

Net
Loss.As a result of the above, the net loss for the three month period ended March
31, 2007, was approximately $376,000 as compared to the net loss of approximately $258,000
for the three months ended March 31, 2006.

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

18

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|                                                 | Three Months Ended
March 31
|------------------------------------------------ | ---------------------------
|
|Consulting services:                             |                            
|Revenues                                         |                            
|Operating income                                 |                            
|Total assets                                     |                            
|PKI Credentialing and Managed Services:          |                            
|Revenues                                         |                            
|Operating loss (includes amortization expense of |                            
|$45,838 and $45,838, respectively)               |                            
|Total assets                                     |                            
|Credentials issued                               |                            
|Total Company                                    |                            
|Revenues                                         |                            
|Operating loss                                   |                            
|Depreciation expense                             |                            
|Interest income (expense), net                   |                            
|Other income                                     |                            
|Net loss                                         |                            
|Total Corporate assets                           |                            

(1)    
          Includes $55,270 of amortization expense in cost of sales associated with the
          purchase of ORC, which is not allocated among the segments and includes $257,054
          in unallocated corporate costs in general and administrative expense.

(2)    
          Includes $55,270 of amortization expense in cost of sales associated with the
          purchase of ORC, which is not allocated among the segments and includes $208,448
          in unallocated corporate costs in general and administrative expense.

# Liquidity and Capital
Resources

The Company has, since inception,
financed its operations and capital expenditures through the sale of preferred and common
stock, seller notes, convertible notes, convertible exchangeable debentures, senior
secured loans and the proceeds from the exercise of the warrants related to a convertible
exchangeable debenture. During 2006 and through the period ended March 31, 2007,
operations were materially financed with working capital, and the proceeds from a
convertible preferred stock issuance which occurred in October 2004.

Net cash provided by operating
activities for the quarter ended March 31, 2007, was approximately $3,000 as compared to
cash used in operating activities of approximately $324,500 for the quarter ended March
31, 2006. The increase in cash balances available for operating activities for the quarter
ended March 31, 2007, was primarily a result of an improvement in the collection of
accounts receivable partially offset by a decrease in our accounts payable.Net
cash used in investing activities for the quarter ended March 31, 2007, was approximately
$22,000 as compared to $11,000 in the quarter ended March 31, 2006. The increase in net
cash used in investing activities resulted from increased expenditures in property and
equipment. Net cash used in financing activities amounted to approximately $14,000 in the
quarter ended March 31, 2007, as compared to $279,000 of net cash used in financing
activities in the quarter ended March 31, 2006. The change primarily resulted from a
decrease in costs related to our registration and a warrant exercise, partially offset by
a decrease in proceeds related to the exercise of stock options and an increase in
principal payments made under our capital lease obligations during the quarter ended March
31, 2007. Capital expenditures in property and equipment were approximately $22,000 for
the quarter ended March 31, 2007, as compared to capital expenditures in property and
equipment of approximately $11,000 for the quarter ended March 31, 2006.

As of March 31, 2007, the Company had
a net working capital of approximately $3.5 million. WidePoints primary source of
liquidity consists of approximately $2.7 million in cash and cash equivalents and
approximately $3.3 million of accounts receivable. The decrease in accounts receivable was
primarily the result of a decrease in days sales outstanding of accounts receivable and
the collection attributable to a material sale which occurred at the end of the fourth
quarter of 2006. Current liabilities include approximately $2.5 million in accounts
payable and accrued expenses. The substantial decrease in current liabilities is
predominately the result of the payoff of the account payable attributable to a material
sale referenced in this paragraph.

19

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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 LP (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
were 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 a
warrant to purchase up to an additional 10,228,571 shares of its Common Stock at an
exercise price of $0.40 per common share. Through March 31, 2007, Barron has converted all
of its Series A Convertible Preferred Stock and has fully exercised its warrant.
Barrons conversion of its Series A Convertible Preferred Stock and its warrant
exercises were subject to contractual restrictions which restrict the ability of Barron
and its affiliates to acquire shares of Common Stock which equal no more than 4.99% of the
outstanding shares of WidePoints Common Stock at any time. This contractual
restriction could have been removed upon 61 days notice to WidePoint from Barron, but in
the event Barron elects to remove this restriction, then Barron and its affiliates agreed
that Barron and its affiliates could only vote the shares of Common Stock held by Barron
and its affiliates which result in Barron and its affiliates having no more than 22% of
the total voting power of all outstanding shares of WidePoints Common Stock at any
time. As a result of the Barron financing transaction, WidePoint issued warrants to
Westcap Securities, Inc., a registered broker-dealer (Westcap) and
WidePoints placement agent in such transaction, to purchase 511,428 shares of Common
Stock at an exercise price of $0.40 per share, which warrants expire in October 2009. As
of March 31, 2007 all of the Westcap warrants had been exercised.

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. Under the
agreement, if the registration statement was not declared effective by April 23, 2005 and
thereafter kept effective through October 20, 2007, subject to permissible blackout
periods and registration maintenance periods, then WidePoint would be required to pay
Barron a maximum penalty of up to $20,000 for each month the registration statement was
not effective. Barron waived this penalty provision through February 9, 2006, when the
registration statement was declared effective by the SEC.

WidePoint believes that its current
cash position is sufficient to meet capital expenditure and working capital requirements
for the near term. However, the growth and technological change of the market make it
difficult to predict future liquidity requirements with certainty. Over the longer term,
the Company must successfully execute its plans to increase revenue and income streams
that will generate significant positive cash flows if it is to sustain adequate liquidity
without impairing growth or requiring the infusion of additional funds from external
sources. Additionally, a major expansion, such as occurred with the acquisition of ORC or
any other major new subsidiaries, might require external financing that could include
additional debt or equity capital. 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. Further, the Company raised approximately $4.1 million
dollars in connection with the attached warrants associated with the aforementioned equity
investments by Barron Partners LP during the year ended 2005. 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.

20

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# Off-Balance Sheet
Arrangements

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

# ITEM 3.   QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not exposed to market risks
related to changes in interest rates and changes in the market value of our investments as
we have no borrowings outstanding under a bank credit agreement as of March 31, 2007 and
we only invest our excess cash in marketable securities in a money market account which
due to the short maturity and our availability to withdraw those securities at any time
does not present any material market exposure.

# ITEM 4.   CONTROLS
AND PROCEDURES.

# Conclusions regarding
disclosure controls and procedures

The Companys disclosure
controls and procedures are designed to provide reasonable assurance that information
required to be disclosed by it in its periodic reports filed with the Securities and
Exchange Commission is recorded, processed, summarized and reported, within the time
periods specified in the Commissions rules and forms. Our principal executive
officer and principal financial officer, after evaluating the effectiveness of our
disclosure controls and procedures (as defined in Securities Exchange Act
Rule 13a-15(e)) as of the end of the period covered by this report, have concluded
that, based on the evaluation of these controls and procedures required by paragraph (b)
of Securities Exchange Act Rule 13a-15, our disclosure controls and procedures were not
effective. That conclusion was based on the fact that
the Company was not aware that it was required to include its managements annual
report on internal control over financial reporting and the attestation report of the
Companys registered public accounting firm in its Form 10-K for the year ended
December 31, 2006, as discussed in further detail below.

# Management's  Annual
Report on Internal  Control Over Financial  Reporting and Attestation  Report of the
Company's  Registered  Public Accounting Firm

SEC rules require that a company that
is an accelerated filer, as defined by Rule 12b-2 under the Securities
Exchange Act, must set forth in its annual report on Form 10-K a managements annual
report on internal control over financial reporting pursuant to Rule 13a-15(f). The
Company did not become an accelerated filer until December 31, 2006, based on the
calculation called for by paragraph (i) of the definition of that term under Rule 12b-2.
During 2006, prior to the Companys becoming an accelerated filer, the SEC extended
the deadline date for compliance with that requirement for non-accelerated filers until
the first fiscal year ending on or after December 15, 2007. At the time that the Company
filed its Annual Report on Form 10-K for the year ended December 31, 2006, the Company
believed that since it was a non-accelerated filer at the time of the SECs granting
of that extended compliance deadline, the Company was not required to set forth its
managements annual report on internal control over financial reporting and the
attestation report of the Companys registered public accounting firm in its Form
10-K for the year ended December 31, 2006. As a result of subsequent discussions with the
SEC, the Company now understands that it was not entitled to rely on the extended
compliance deadline as a result of the Company becoming an accelerated filer on December
31, 2006 and that the Company should have filed its managements annual report on
internal control over financial reporting and the attestation report of the Companys
registered public accounting firm in its Form 10-K for the year ended December 31, 2006.
In accordance with the Companys discussions with the SEC, the Company will set forth
such reports in its Form 10-K for the year ended December 31, 2007.

# Changes in internal
control over financial reporting

There were no changes in our internal
control over financial reporting identified in connection with the evaluation required by
paragraph (d) of Exchange Act Rule 13a-15 that occurred during our last fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. Subsequent to December 31, 2006, the Company
became aware of its obligation to file its annual report on internal control over
financial reporting and related auditor attestation report in the Form 10-K for the year
ended December 31, 2006, and the Company will include such reports in its Form 10-K for
the year ended December 31, 2007.

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# PART II.

# OTHER INFORMATION

# ITEM 1A.    RISK FACTORS

Item 1A (Risk Factors) of
the Companys Annual Report on Form 10-K for the year ended December 31, 2006 sets
forth information relating to important risks and uncertainties that could materially
adversely affect the Companys business, financial condition or operating
results.  Those risk factors continue to be relevant to an understanding of the
Companys business, financial condition and operating results.  Certain of those
risk factors have been revised below to provide updated information.  References to
we, our and us in these risk factors refer to the
Company.

# We could issue
additional shares of common stock, which might dilute the book value of our common stock.

We have a total of 110,000,000
authorized shares of common stock, of which 52,522,699 shares were issued and outstanding
as of March 31, 2007. In addition, we had warrants and options outstanding as of that date
with respect to which 7,088,257 shares of common stock were reserved for issuance. Our
board of directors has the authority, without action or vote of our stockholders in most
cases, to issue all or a part of any authorized but unissued shares of our common stock.
Such stock issuances may be made at a price that reflects a discount from the then-current
trading price of our common stock. In addition, in order to raise capital for acquisitions
or other general corporate purposes that we may need at todays stock prices, we
would likely need to issue securities that are convertible into or exercisable for a
significant number of shares of our common stock. These issuances would dilute our
stockholders percentage ownership interest, which would have the effect of reducing our
stockholders influence on matters on which our stockholders vote, and might dilute
the book value of our common stock. You may incur additional dilution of net tangible book
value if holders of stock options or warrants, whether currently outstanding or
subsequently granted, exercise their options or warrants to purchase shares of our common
stock.

22

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# The sale of a large
number of shares of our common stock could depress our stock price.

As of March 31, 2007, we had reserved
7,088,257 shares of common stock for issuance upon exercise of stock options and warrants.
As of March 31, 2007, holders of warrants and options to purchase an aggregate of
6,687,213 shares of our common stock may exercise those securities and transfer the
underlying common stock at any time subject, in some cases, to Rule 144 of the Securities
Act of 1933. In addition, in connection with our financing with Barron, we have registered
(i) all of the shares of common stock issuable upon conversion of the Series A Convertible
Preferred Stock that we issued and sold in the Barron financing and (ii) all of the shares
of common stock that are issuable upon exercise of the warrants issued to Westcap in
connection with the financing. The Series A Convertible Preferred Stock was initially
convertible into 20,457,143 shares of our common stock and the warrants initially entitled
the holders to acquire an additional 10,739,999 shares of our common stock. In January and
February of 2007, Barron converted all of its remaining shares of Series A Convertible
Preferred Stock, which conversion resulted in the issuance to Barron of a total of
1,952,140 shares of our Common Stock. From January 1 through December 31, 2006, Barron
converted a portion of its shares of Series A Convertible Preferred Stock into 10,005,000
shares of common stock. During April, May, September, October, and December 2005, Barron
converted a portion of its shares of Series A Convertible Preferred Stock into 8,500,000
shares of common stock and exercised warrants to purchase 7,428,572 shares of common
stock. In December 2005, Barron transferred warrants to purchase 2,800,000 shares of
common stock to other institutional investors. In December 2005, the holders of such
warrants to acquire such 2,800,000 shares of common stock exercised such warrants. These
shares of common stock are registered for possible resale by the holders thereof under the
Securities Act of 1933. The market price of our common stock could decline as a result of
sales of a large number of shares of our common stock in the market, or the perception
that these sales could occur. These sales might also make it more difficult for us to
issue equity securities in the future at a price that we think is appropriate, or at all.

# Financial investors
may have interests different than our stockholders or WidePoint, and may be able to
impact corporate actions requiring stockholder approval because they own a significant
amount of our common stock.

In future financings, we may issue
securities that are convertible into or exercisable for a significant number of shares of
our outstanding common stock. Financial investors may have short-term financial interests
different from our long-term goals and the long-term goals of our management and other
stockholders. In addition, based on the significant ownership of our outstanding common
stock, financial investors may be able to impact corporate actions requiring stockholder
approval.

# 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------

23

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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 10, 2007 | /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               

24