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, 2004
| | ------------------------------------------------

OR

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

| | For
the transition period from  ___________________  to ____________________
| | ----------------------------------------------------------------------------

Commission file number    
000-23967

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

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

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

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

|One Mid America Plaza, Suite 403, Oakbrook Terrace, Ill                           | 60181
|--------------------------------------------------------------------------------- | -----
|Former name, former address and former fiscal year, if changed since last report.

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

Yes  X    No

Indicate
 by check mark  whether  the  registrant  is an  accelerated  filer (as  defined in Rule
12b-2  under the  Securities Exchange Act of 1934).  Yes      No  X

APPLICABLE
 ONLY TO CORPORATE  ISSUERS:  Indicate the number of shares  outstanding of each of the
issuer's  classes of common stock, as of May 14, 2004: 20,162,893 shares of common stock,
$.001 par value per share.

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WIDEPOINT CORPORATION

INDEX

|                                                             
|-------------------------------------------------------------
|Part I.    FINANCIAL INFORMATION                             
|Item 1.  Condensed Consolidated Financial Statements         
|Condensed Consolidated Balance Sheets as of March 31, 2004,  
|(unaudited) and December 31, 2003 (unaudited)                
|Condensed Consolidated Statements of Operations for the three
|months ended March 31, 2004 and 2003 (unaudited)             
|Condensed Consolidated Statements of Cash Flows for the three
|months ended March 31, 2004 and 2003 (unaudited)             
|Notes to Condensed Consolidated Financial Statements         
|Item 2.  Management's Discussion and Analysis of Financial   
|Condition and Results of Operations                          
|Item 3.  Quantitative and Qualitative Disclosures About      
|Market Risk                                                  
|Item 4.  Controls and Procedures                             
|Part II.    OTHER INFORMATION                                
|Item 6.  Exhibits and Reports on Form 8-K                    
|SIGNATURES                                                   
|CERTIFICATIONS                                               

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# PART 1.    FINANCIAL
INFORMATION

# ITEM 1.  CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

# WIDEPOINT CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

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

The accompanying notes
are an integral part of these statements.

1

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# WIDEPOINT CORPORATION
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

|                                                      | Three Months Ended
March 31,
|----------------------------------------------------- | ----------------------------
|
|
|Revenues, net                                         |                             
|Operating expenses:                                   |                             
|Cost of sales                                         |                             
|Sales and marketing                                   |                             
|General & administrative                              |                             
|Depreciation & amortization                           |                             
|                                                      |                             
|Loss from operations                                  |                             
|Other income, net:                                    |                             
|Interest income, 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 and amortization expense       |                             
|Changes in assets and liabilities           |                             
|Accounts receivable                         |                             
|Prepaid expenses                            |                             
|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 from investing               |                             
|activities                                  |                             
|                                            |                             
|Net cash (used in) financing                |                             
|Activities                                  |                             
|Net payments on long-term obligations       |                             
|                                            |                             
|Net cash used in financing                  |                             
|activities                                  |                             
|                                            |                             
|Net increase (decrease) in cash             |                             
|                                            |                             
|Cash and equivalents, beginning of period   |                             
|                                            |                             
|Cash and equivalents, end of period         |                             
|                                            |                             

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:

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

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

During 2002 and 2003, the Company
witnessed a negative economic environment within the commercial IT sector due to
constrained business investment and an excessive supply of IT Consultants which as a
result reduced gross margins and decreased demand for the IT services that the Company
provided to its customers.

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

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

4

---

The Company continues it efforts to
expand the operations of WidePoint through merger and acquisitions. The Company is also
presently attempting to negotiate several other transactions that will expand the public
sector segment of the Company.

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

# 2.  Significant Accounting
Policies:

Principles of
Consolidation

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

Use of Estimates

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

Cash and Cash Equivalents

Investments purchased with original
maturities of three months or less are considered cash equivalents for purposes of these
consolidated financial statements. The Company maintains cash and cash equivalents with
various major financial institutions. At March 31, 2004 and December 31, 2003, cash and
cash equivalents included $350,492 and $250,144, respectively, on investments in interest
bearing accounts. At times, cash balances held at financial institutions were in excess of
federally insured limits. The Company places its temporary cash investments with
high-credit, quality financial institutions, and as a result, the Company believes that no
significant concentration of credit risk exists with respect to these cash investments.

5

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Accounts Receivable

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

Credit is extended based on
evaluation of a customers financial condition and, generally, collateral is not
required. Accounts receivable are due within 30 to 45 days and are stated at amounts due
from customers net of an allowance for doubtful accounts. Accounts outstanding longer than
the contractual payment terms are considered past due. The Company determines its
allowance by considering a number of factors, including the length of time trade accounts
receivable are past due, the Companys previous loss history, the customers
current ability to pay its obligation to the Company and the condition of the general
economy and the industry as a whole. The Company writes-off accounts receivable when they
become uncollectible and payments subsequently received on such receivables are credited
to the allowance for doubtful accounts. The following table sets forth the rolling forward
balances of the Allowance for doubtful accounts of the Company.

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

Unbilled accounts receivable on
time-and-materials contracts represent costs incurred and gross profit recognized near the
period-end but not billed until the following period. Unbilled accounts receivable on
fixed-price contracts consist of amounts incurred that are not yet billable under contract
terms. Unbilled accounts receivable totaled $0 and $6,207 at March 31, 2004 and December
31, 2003, respectively.

Concentrations of Credit
Risk

Financial instruments that
potentially subject the Company to credit risk consist of cash and cash equivalents and
accounts receivable. As of March 31, 2004, four customers represented 17%, 15%, 13% and
11% percent of accounts receivable, respectively. As of December 31, 2003, three customers
individually represented 26%, 11%, and 10% of accounts receivable.

6

---

Fair Value of Financial
Instruments

WidePoint financial instruments
consist of cash, accounts receivable, accounts payable and accrued expenses. The fair
value of these financial instruments approximates their carrying value as of March 31,
2004, due to their short-term nature.

Revenue Recognition

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

Significant Customers

During the first quarter of 2004,
four customers individually represented 22%, 17%, 14%, and 10% percent of revenue. During
the first quarter of 2003, four customers individually represented 20%, 16%, 13%, and 10%
percent of revenue.

Income Taxes

The Company accounts for income taxes
in accordance with Statement of Financial Accounting Standards (SFAS)
No. 109, Accounting for Income Taxes. Under SFAS No.109, deferred tax
assets and liabilities are computed based on the difference between the financial
statement and income tax bases of assets and liabilities using the enacted marginal tax
rate. SFAS No. 109 requires that the net deferred tax asset be reduced by a valuation
allowance if, based on the weight of available evidence, it is more likely than not that
some portion or all of the net deferred tax asset will not be realized. The Company
continues to reduce its net deferred taxes by a 100% valuation allowance.

Stock-based compensation

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

7

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|                                           | Three Months ended
March 31,
|------------------------------------------ | ----------------------------
|
|Net loss, as reported                      |                             
|Deduct:  Total stock-based employee        |                             
|compensation expense determined under fair |                             
|value based method for awards granted,     |                             
|modified, or settled, net of related tax   |                             
|effects                                    |                             
|                                           |                             
|Pro forma net loss                         |                             
|Net loss per share:                        |                             
|Basic and diluted - as reported            |                             
|Basic and diluted - pro forma              |                             

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

For purposes of determining the
effect of these options, the fair value of each option is estimated on the date of grant
based on the Black-Scholes single-option pricing model assuming the following for the
three months ended March 31, 2004 and 2003:

|                            | 2004      | 2003     
|--------------------------- | --------- | ---------
|Dividend yield              | --        | --       
|Risk-free interest rate (%) | 2.7-4.13% | 2.7-4.13%
|Volatility factor (%)       | 156%      | 156%     
|Expected life in years      | 5         | 5        

Basic and Diluted Net
Loss Per Share

Basic income or loss per share
includes no dilution and is computed by dividing net income or loss by the
weighted-average number of common shares outstanding for the period. Diluted income or
loss per share includes the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock. The
treasury stock effect of options and warrants to purchase 2,112,000 and 1,816,000 shares
of common stock outstanding at March 31, 2004 and 2003, respectively, has not been
included in the calculation of the net loss per share as such effect would have been
anti-dilutive. As a result of these items, the basic and diluted loss per share for all
periods presented are identical.

8

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Reclassifications

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

# 3.  Promissory Notes:

Promissory Notes

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

# 4.  Commitments and
Contingencies:

Litigation

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

9

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

The following discussion and analysis
of the financial condition and results of operations of the Company should be read in
conjunction with the financial statements and the notes thereto which appear elsewhere in
this quarterly report and the Companys Annual Report on Form 10-K for the year ended
December 31, 2003.

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

# Overview

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

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

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

During 2002 and 2003, the Company
witnessed a negative economic environment within the commercial IT sector due to
constrained business investment and an excessive supply of IT Consultants which as a
result reduced gross margins and decreased demand for the IT services that the Company
provided to its customers.

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

10

---

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

The Company continues it efforts to
expand the operations of WidePoint through merger and acquisitions. On April 19, 2004,
WidePoint entered into a non-binding letter of intent to acquire all of the stock of
Knowledge Workers, Inc., (KWI) a Colorado based corporation, for the
consideration of the issuance of WidePoint common stock and the assumption of debt.
KWIs business expertise resides in the improved utilization of Human Capital
services through the use of its proprietary software and solutions with clients in both
the commercial and government marketplace. The Company is working towards a definitive
closing of this transaction no later than the third quarter of 2004. The Company is also
presently attempting to negotiate several other transactions that will expand the public
sector segment of the Company.

For the quarterly period ended March 31, 2004,
revenue was approximately $723,000 as compared to revenue of approximately $923,000 for
the quarterly period ended March 31, 2003. The decrease in revenues in the three months ended March
31, 2004, was attributable to fewer hours billed and a lower average bill rate. The
Company has witnessed a stabilization in billable hours worked during the
first quarter of 2004, pricing pressures within the industry have continued to place
downward pressure on average billable rates as compared to the first quarter of 2003. The
continued weakness within the IT marketplace continues to create negative pricing
pressures and an increase in competitiveness that creates a more difficult environment to
expand revenues internally for the Company. The Company anticipates these trends may
continue into the second quarter of 2004 with a modest pickup in revenue possible during
the second quarter of 2004 and into the second half of 2004. The Company further
anticipates that if it is successful in executing its business strategy to expand into the
government marketplace through mergers and acquisitions that revenue growth can be expected to expand.

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

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

11

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# Results of Operations

Three Months Ended March
31, 2004 as Compared to Three Months Ended March 31, 2003

Revenue. Revenue
for the three month period ended March 31, 2004 was approximately           $723,000 as
compared to approximately $923,000 for the three month period ended           March 31,
2003. The revenue decline was attributable to a smaller number of           billable
hours and a lower average bill rate by consultants in the quarterly period ending March 31, 2004 as compared           to the
quarterly period ended March 31, 2003.

Gross
profit.Gross profit for the three month period ended March 31, 2004, was
approximately $157,000, or 22% of revenues, a decrease of approximately $89,000 from gross
profit of approximately $246,000, or 27% of revenues, for the three month period ended
March 31, 2003. The decline of gross profit was materially attributable to a reduction in
gross margin as a result of negative pricing pressures that are present within the current
marketplace for the companys services.

Sales
and marketing. Sales and marketing expenses for the three month period ended March 31,
2004, were approximately $102,000, or 14% of revenues, a decrease of approximately
$24,000, as compared to approximately $126,000, or 14% of revenues, for the three month
period ended March 31, 2003. The decrease was materially attributable to reduced labor
cost due to the reduction of a sales associate position in the second quarter
of 2003 that has not been replaced subsequently.

General
and administrative. General and administrative expenses for the three month period
ended March 31, 2004, were approximately $150,000, or 21% of revenues, a decrease of
approximately $34,000, as compared to approximately $184,000, or 20% of revenues, incurred
by the Company for the three month period ended March 31, 2003. The decrease in general
and administrative expenses for the three months ended March 31, 2004, was primarily
attributable to a decrease in general overhead expenses.

Depreciation
and amortization. Depreciation and amortization expenses for the three month period
ended March 31, 2004, was $1,789, or less than 1% of revenues, a decrease of $1,391, as
compared to $3,180 of such expenses, or less than 1% of revenues, incurred by the Company
for the three month period ended March 31, 2003. The decrease in depreciation and
amortization expenses for the three month period ended March 31, 2004, was primarily
attributable to a lesser amount of depreciable assets as a result of the reduced
equipments requirements of a smaller consultant base.

12

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Other
income (expense). Interest income for the three month period ended March 31, 2004, was
$1,862, or less than 1% of revenues, a decrease of $1,805 as compared to $3,667, or less
than 1% of revenues, for the three month period ended March 31, 2003. The decrease in
interest income for the three month period ended March 31, 2004, was primarily
attributable to lesser amounts of cash and cash equivalents along with lower short term
interest rates that were available to the Company on investments in overnight sweep
accounts. Interest expense for the three month period ended March 31, 2004, was $115, a
decrease of $404, as compared to $519, or less than 1% of revenues, for the three month
period ended March 31, 2003. The decrease in interest expense for the three months ended
March 31, 2004, was primarily attributable to the elimination of the Companys
capital lease obligations.

Net
loss.As a result of the above, the net loss for the three month period ended March
31, 2004, was approximately $95,000 as compared to the net loss of approximately $64,000
for the three months ended March 31, 2003.

# Liquidity and Capital
Resources

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

Cash provided by operating activities
for the quarter ended March 31, 2004, was approximately $20,000 as compared to cash used
in operating activities of approximately $25,000 for the quarter ended March 31, 2003. The
increase in cash provided by operations during the first quarter of 2004 as compared to
the first quarter ending March 31, 2003 was primarily a result of a decrease in days sales
outstanding in accounts receivable partially offset by a decrease in accounts payable and
accrued expenses and an increase in losses. There was no material amount of capital
expenditures on property for the quarters ended March 31, 2004 and 2003.

As of March 31, 2004, the Company had
net working capital of approximately $1.0 million. The Companys primary source of
liquidity consists of approximately $1.0 million in cash and cash equivalents and
approximately $0.3 million of accounts receivable. The Companys current liabilities
include approximately $0.3 million in accounts payable and accrued expenses.

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

13

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Since 2002, the Company has embarked
upon several new initiatives to counter the current negative environment within our
industry and expand our capacity to restore revenue growth. The Company requires
substantial working capital to fund the future growth of its business, particularly to
finance accounts receivable, sales and marketing efforts, and capital expenditures. The
Company currently has no commitments for capital expenditures. The Companys future
capital requirements will depend on many factors including the rate of revenue growth, if
any, the timing and extent of spending for new product and service development,
technological changes and market acceptance of the Companys services.

The Company believes that its current
cash position is sufficient to meet its capital expenditure and working capital
requirements for the near term, however, the growth and technological change of the market
make it difficult for the Company to predict future liquidity requirements with certainty.
Over the longer term, the Company must successfully execute its plans to increase revenue
and income streams that will generate significant positive cash flows if it is to sustain
adequate liquidity without impairing growth or requiring the infusion of additional funds
from external sources. Additionally, a major expansion, such as would occur with the
acquisition of a major new subsidiary, might also require external financing that could
include additional debt or capital. There can be no assurance that additional financing,
if required, will be available on acceptable terms, if at all.

# Other

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

The preparation of financial
statements in conformity with US GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.

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

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# ITEM 3.  QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

# ITEM 4.  CONTROLS AND
PROCEDURES

An evaluation was carried out under
the supervision and with the participation of the Companys management, including our
Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities
Exchange Act of 1934) as of March 31, 2004. As a result of their evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that the Companys
disclosure controls and procedures are effective to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms. There were no changes in the
Companys internal control over financial reporting that occurred during the quarter
ended March 31, 2004, that has materially affected and is reasonably likely to materially
affect, the Companys internal control over financial reporting.

# PART II.

# OTHER INFORMATION

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

|(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.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

15

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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 17, 2004 | /s/ STEVE L. KOMAR                   
|                    | Steve L. Komar                       
|                    | President and Chief Executive Officer
|                    | /s/ JAMES T. MCCUBBIN                
|                    | James T. McCubbin                    
|                    | Vice President - Principal Financial 
|                    | and Accounting Officer               

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