UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549


--------------------------





**FORM
      10-K/A**


(Amendment
      No. 1)




---------------





**ANNUAL
      REPORT**


**PURSUANT
      TO SECTIONS 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**








(MARK
      ONE)





x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934  FOR THE FISCAL YEAR ENDED: MAY 31,
              2006 OR  o
            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: 001-15503


--------------------------





**WORKSTREAM
      INC.**


(Exact
      name of Registrant as specified in its charter)





CANADA
            
            N/A(State
                or other jurisdiction of
            
            (IRS
                Employer Identification
                No.)incorporation
                or organization)495
                MARCH ROAD, SUITE 300OTTAWA,
                ONTARIO
            
            K2K
                3G1(Address
                of principal executive
                offices)
            
            (zip
                code)(613)
                270-0619(Registrant's
                telephone number,including
                area code)







--------------------------











**SECURITIES
      REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:**





TITLE
                OF EACH CLASS
            
            NAME
                OF EACH EXCHANGE
              ON
                WHICH REGISTERED**COMMON
                SHARES, NO PAR****VALUE**
            
            **BOSTON
                STOCK EXCHANGE**





**SECURITIES
      REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:**





**COMMON
      SHARES, NO PAR VALUE**


(TITLE
      OF
      CLASS)





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o  No
x





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Act. Yes o  No
x





Indicate
      by check mark 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
o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of the registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. x




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check
      one):




Large
                accelerated filer o
            Accelerated
                filer o
            Non-accelerated
                filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes o 
No
x





The
      aggregate market value of the outstanding voting and non-voting common equity
      held by non-affiliates of the registrant, computed by reference to the price
      at
      which the common equity was last sold as of the last business day of the
      registrant’s most recently completed second fiscal quarter was $56,415,000.
      Common shares held by each executive officer and director and by each person
      who
      owned 10% or more of the outstanding common shares as of such date have been
      excluded in that such persons may be deemed to be affiliates. This determination
      of affiliate status is not necessarily a conclusive determination for other
      purposes.





The
      total
      number of common shares, no par value, outstanding on September 25, 2006 was
      50,960,845, excluding 108,304 **** escrow
      shares.








2




**EXPLANATORY
      NOTE**




Part
      III
      of the Annual Report on Form 10-K for the year ended May 31, 2006 of Workstream
      Inc. is hereby amended and restated in its entirety as follows:




**ITEM
      10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**




Set
      forth
      below is certain information regarding our directors and executive
      officers:






Name
            
            Age
            
            PositionMichael
                Mullarkey
            
            38
            
            Chairman
                of the Board of Directors, President and Chief Executive OfficerThomas
                Danis
            
            59
            
            DirectorMichael
                Gerrior
            
            56
            
            DirectorArthur
                Halloran
            
            60
            
            DirectorJohn
                Oltman
            
            61
            
            DirectorMitch
                Tuchman
            
            50
            
            DirectorSteve
                Singh
            
            45
            
            DirectorStephen
                Lerch
            
            52
            
            Executive
                Vice President, Chief Operating and Financial
                Officer







*Michael
      Mullarkey* has been
      the Chairman of our Board of Directors since November 2001 and our Chief
      Executive Officer since April 2001. In April 2003, Mr. Mullarkey assumed the
      responsibilities of President, a position he previously held from April 2001
      until November 2001. From January 2001 to April 2001, Mr. Mullarkey was the
      President, Secretary and a Director of Paula Allen Holdings, Inc., a full
      service outplacement firm in the United States, which we acquired in April
      2001.
      From October 1999 to December 2000, Mr. Mullarkey returned to Sony Corporation
      where he served as General Manager. From January 1998 to September 1999, Mr.
      Mullarkey was the co-founder and managing director of Information Technology
      Mergers & Acquisitions, LLC, an investment capital group managing private
      equity funding and investing in emerging technology markets and organizations.
      From October 1989 to February 1997, Mr. Mullarkey was employed by Sony
      Corporation of America, a subsidiary of Sony Corporation, where his most recent
      position was Vice President and General Manager. Prior to serving as Sony
      Corporation of America’s Vice President and General Manager, Mr. Mullarkey
      served as its National Sales Manager, a position he held from 1992 to 1994,
      and
      prior to that he served as one of its Sales Executives.




*Thomas
      Danis* has been
      a member of our Board of Directors since 2001.  Mr. Danis is currently an
      insurance executive with Aon Corporation, a provider
      of risk management services, insurance and reinsurance brokerage, human capital
      and management consulting, and specialty insurance underwriting .
       During 2001, Mr. Danis was the Market Area Leader for Southern California
      with Aon Risk Services and was responsible for the offices in this area.
 From 1993 to 2000, Mr. Danis was a Managing Director of the Mergers &
Acquisitions Practice for Aon, as well as their St. Louis office.  Mr.
      Danis serves on the Board of Directors of International Wire Group, Inc. and
      International Wire Holding Company.  Mr. Danis also serves on the Board of
      RCP Advisors, a fund to funds private equity firm.




*Michael
      Gerrior* has been
      a member of our Board of Directors since April 2001. From 1988 to present,
      Mr.
      Gerrior has been a partner at Perley-Robertson, Hill & McDougall LLP, our
      Canadian legal counsel. Mr. Gerrior assists his clients with mergers and
      acquisitions, securities matters and corporate governance. He has concluded
      private placements, venture capital transactions, and public offerings on
      various exchanges, including NASDAQ, the TSX Venture Exchange, the Toronto
      Stock
      Exchange and the Montreal Exchange.




3




*Arthur
      Halloran* has been
      a member of our Board of Directors since May 2001. Since April 2004, Mr.
      Halloran has been the Director of Business Development for RSM McGladrey, Inc.,
      an accounting and consulting firm,  and
      is
      responsible for all business development activities for the New York/Connecticut
      Economic Unit. From October 2001 until April 2003, Mr. Halloran served as our
      President and Chief Operating Officer. From October 1989 until October 2001,
      Mr.
      Halloran was employed in a number of positions by Sony Electronics Inc., with
      his most recent position being Senior General Manager Specialty Sales and
      Marketing where he was responsible for retail operations and incentive
      marketing. From September 1999 to April 2000, Mr. Halloran was the President,
      Business Solutions Company, responsible for the creation and development of
      the
      first Sony Company to address all of the Sony Electronic business units. From
      December 1990 to September 1999, Mr. Halloran was the Vice President,
      Diversified Markets, where he was responsible for the non-retail/non-traditional
      markets of Sony Electronics.




*John
      Oltman* joined
      our Board of Directors in November 2005. Mr. Oltman is the Chief Executive
      Officer and Chairman of Seurat Company, a provider of solutions and services
      that assist companies to more effectively target, acquire and retain customers
      through creative marketing strategies. Prior to joining Seurat, he was the
      Chairman and Chief Executive Officer of SHL Systemhouse, a provider of
      client/server systems integration and technology-outsourcing services. Prior
      to
      his tenure at SHL Systemhouse, Mr. Oltman held numerous positions as a senior
      partner with Accenture, including managing the firm's global systems integration
      and outsourcing business. During recent years, Mr. Oltman has been an advisor,
      board member, investor and active participant in the operations of leading
      technology companies including Exult, Inc., Lante, and Evolve Software
      Technologies.




*Mitch
      Tuchman* joined
      our Board of Directors in November 2005. Mr. Tuchman has served as a consultant
      and sub-advisor to Apex Capital, LLC, a hedge fund based in Orinda, California,
      where he has advised on the firm's technology micro-cap and special situations
      portfolio that ranges from $30 million to $200 million. In 2000, Mr. Tuchman
      co-founded and remains General Partner of Net Market Partners, LP, a venture
      fund specializing in business-to-business e-commerce investments. From 1998
      to
      2000, Mr. Tuchman ran an incubator that assisted venture-backed Internet
      companies to optimize their business models, develop strategies, consummate
      key
      strategic partnerships and raise capital.




*Steve
      Singh* joined
      our Board of Directors in October 2004. Since 1996 Mr. Singh has served as
      President and Chief Executive Officer of Concur Technologies Inc., a provider
      of corporate expense management solutions ,
      and as
      a director since 1993, including service as Chairman of the Board of Directors
      since September 1999. From 1993 to 1996, Mr. Singh was General Manager of the
      Contact Management Division at Symantec Corporation, a computer software and
      services company.




*Stephen
      Lerch* has
      been
      our Executive Vice President, Chief Operating and Financial Officer since April
      2005. He is in charge of our financial, human resources, legal and
      administrative affairs and has operational oversight responsibility. From April
      2003 to January 2004, Mr. Lerch was the Executive Vice President and Chief
      Operating Officer of Rewards Network Inc/iDine Rewards Network Inc. Rewards
      Network Inc. is a provider of dining and hotel rewards and credit card loyalty
      programs. In this position, Mr. Lerch directed operations of merchant sales
      and
      support, contract administration, information technology and corporate and
      partner development. Prior to this position, Mr. Lerch held the position of
      Executive Vice President and Chief Financial Officer from February 1997 to
      August 2003 where he was responsible for all traditional CFO responsibilities
      including internal and external reporting, budgeting, treasury, banking, human
      resources and Audit Committee and Board meetings.





*Audit
      Committee Financial Expert*





The
      Audit
      Committee is comprised of four non-employees, Thomas Danis, Steve Singh, Mitch
      Tuchman and John Oltman. The Board has determined that all members of the Audit
      Committee are “independent” as that term is currently defined in Rule
      4200(a)(15) of the listing standards of the NASD and Rule 10A-3(b)(1) of the
      Securities Exchange Act of 1934. Mr. Singh has been determined to be an "audit
      committee financial expert" as defined by the SEC.





4


*Company
      Employee Code of Conduct*





The
      Board
      has adopted a Code of Conduct that applies to our directors, officers and
      employees, including our principal executive, financial and accounting officers
      and persons performing similar functions. The Code of Conduct will be made
      available, without charge, upon written request made to Matthew Middendorf
      of
      the Company at its principal executive offices located at 495 March Road, Suite
      300, Ottawa, Ont. K2K 3G1. In addition, it is also available on our website
      at
      www.workstreaminc.com.






**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Exchange Act requires that our officers, directors and persons
      who
      beneficially own more than 10% of a registered class of our equity securities
      file with the SEC initial reports of ownership and reports of changes in
      ownership of our Common Shares and other equity securities. Officers, directors
      and greater than 10% beneficial owners are required by SEC regulation to furnish
      us with copies of all Section 16(a) forms they file.





To
      our
      knowledge, based solely on a review of the copies of such reports furnished
      to
      us and written representations that no other reports were required during the
      year ended May 31, 2006, all Section 16(a) filing requirements applicable to
      our
      officers, directors and greater than 10% beneficial owners were complied with.







**ITEM
      11. EXECUTIVE COMPENSATION**




**Summary
      Compensation Table**




The
      following table sets forth the cash compensation as well as certain other
      compensation earned during the fiscal years indicated by certain of our
      executive officers (the “Named Executive Officers”).






Annual
                Compensation
            Long-Term
              Compensation
                Awards
            All
                Other Compensation
              ($)Name
                and Principal Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Other
                Annual Compensation
              ($)
            Securities
              Underlying
              Options
                (#)(1)Michael
                Mullarkey, Chairman, Chief Executive Officer and President
            2006
              
              2005
              
              2004
            $250,000
              
              $239,615
              
              $216,667
            --
              
              $775,619
              
              $150,000
            --
              
              --
              
              --
            --
              
              --
              
              300,000
            $27,392
                (2)
              
              $31,271(3)
              
              $49,410(4)Stephen
                Lerch, Executive Vice President, Chief Operating and Financial
                Officer
            2006
              
              2005
            $200,000
              
              $23,077(5)
            $50,000
              
              $8,344
            --
              
              --
            --
              
              100,000(6)
              50,000(7)
            $6,000(8)
              
              $1,000(9)





5





(1)
            Represents
                the number of Common Shares underlying options granted under our
                2002
                Amended and Restated Stock Option Plan, as
                Amended.


(2)
            Consists
                of $3,555 of insurance premiums paid with respect to a $5,000,000
                term
                life insurance policy on the life of Mr. Mullarkey, $9,600 car allowance,
                health and dental insurance premiums of
                $14,237.


(3)
            Consists
                of $7,159 of insurance premiums paid with respect to a $5,000,000
                term
                life insurance policy on the life of Mr. Mullarkey, $9,600 car allowance,
                health and dental insurance premiums of
                $14,512.


(4)
            Consists
                of $5,344 of insurance premiums paid with respect to a $5,000,000
                term
                life insurance policy on the life of Mr. Mullarkey, a $30,166 lump
                sum car
                allowance, which covers years 2001 through 2004, and health and dental
                insurance premiums of $13,899.


(5)
            Mr.
                Lerch joined the Company in April 2005. His base pay, on an annual
                basis,
                was $200,000.


(6)
            Mr.
                Lerch received 100,000 stock options that vest 1/3 equally over 3
                years.


(7)
            Mr.
                Lerch received 50,000 Restricted Stock Units that vest 1/3 equally
                over 3
                years.


(8)
            Mr.
                Lerch received a car allowance of
                $6,000.


(9)
            Mr.
                Lerch received a car allowance of
                $1,000.








**Stock
      Option Exercises and Holdings**





The
      following table sets forth for each of the Named Executive Officers certain
      information with respect to stock options exercised during the year ended May
      31, 2006 and the number and value of exercisable and unexercisable options
      held
      by the Named Executive Officers as of May 31, 2006.





**Aggregated
      Option Exercises in Last Fiscal Year and Fiscal Year-End Option
      Values**




**Name**
            **Shares
                Acquired on Exercise**
              **(#)**
            **Value
                Realized**
              **($)**
            **Number
                of Securities**
              **Underlying
                Unexercised**
              **Options
                at Fiscal Year-End**
              **Exercisable/Unexercisable
                (#)**
            **Value
                of Unexercised In-the-**
              **Money
                Options at Fiscal**
              **Year-End
                (1)**
              **Exercisable/Unexercisable
                ($)**Michael
                Mullarkey
            --
            --
            400,000/100,000
            $78,000/
                --Stephen
                Lerch
            --
            --
            33,333/66,667
            --
                / --





(1)
            The
                value of unexercised in-the-money options is based on the difference
                between the last sale price of a share of our common shares as reported
                on
                the NASDAQ Small Cap Market on May 31, 2006 ($1.39) and the exercise
                price
                of the options, multiplied by the number of
                options.




**Compensation
      of Directors**




All
      directors are entitled to reimbursement of their reasonable out-of-pocket
      expenses incurred in attending Board and committee meetings. Directors who
      are
      not also Workstream employees or professionals on retainer with Workstream
      were
      paid an annual fee of $20,000 for fiscal year 2006. Directors who are members
      of
      our Audit Committee were paid an additional $15,000 for fiscal year 2006. The
      Chairman of the Audit Committee was paid $25,000 for fiscal year 2006. In
      addition, each director is eligible to participate in our 2002 Amended and
      Restated Stock Option Plan and is to receive restricted stock unit grants.





6




**Employment**  **Contracts,
      Termination of Employment and Change-in-Control
      Arrangements**




*Michael
      Mullarkey Employment Agreement.* We
      entered into an employment agreement as of January 2004 with Michael Mullarkey
      to serve as our Chief Executive Officer at a minimum annual salary of $250,000.
      The employment agreement has a three year term unless written notice is given
      by
      either party at least ninety (90) days before the end of the first year term
      or
      any extension thereof, that they wish the Agreement to terminate at the end
      of
      that Term, the Agreement will automatically be extended by successive one year
      terms. Mr. Mullarkey is also entitled to receive a bonus of up to $200,000
      to be
      awarded should certain mutually agreed upon goals and objectives be achieved.
      Mr. Mullarkey is also entitled to an Accelerator Bonus which is an additional
      bonus payable of 5% of revenue for revenue growth in excess of 20% to 40%
      inclusive, 7% of revenue growth in excess of 41%. EBITDA must be positive during
      the evaluation period. This Accelerator Bonus would be payable over a three
      year
      period, one third each year as long as Mr. Mullarkey is employed with the
      Company.




In
      addition, we granted Mr. Mullarkey an option to purchase 300,000 Common Shares
      at an exercise price of $2.15 per share, which options vest in three equal
      annual installments beginning in January 2005. Under the agreement, Mr.
      Mullarkey also receives a car allowance of $800 per month as well as short-term
      and long-term disability coverage and term life insurance coverage of
      $5,000,000. If we elect to terminate Mr. Mullarkey’s employment other than for
“cause” (as defined in the agreement) within one year of the signing of the
      agreement, Mr. Mullarkey would be entitled to six months salary and benefits.
      If
      after one year of the signing of the agreement, we elect to terminate Mr.
      Mullarkey’s employment other than for “cause,” or do not renew his employment
      agreement and fail to offer him continued employment on comparable terms, Mr.
      Mullarkey would be entitled to 12 months’ salary and benefits. If we elect to
      terminate Mr. Mullarkey’s employment for “cause” at any time during the
      agreement, Mr. Mullarkey will continue to receive his salary and benefits until
      the date his employment is terminated. Should there be a change in control
      of
      the Company and Mr. Mullarkey is released for any reason save and except for
      cause, Workstream shall pay Mr. Mullarkey, three years’ severance. The severance
      amount is due and payable upon completion of the transaction and is further
      based on the average of the previous three years total compensation. Should
      Mr.
      Mullarkey be released for any reason except for cause, all stock options, stocks
      and warrants and bonuses shall vest immediately. Change in control is defined
      as
      a change in ownership of an amount greater than 50% of the total issued and
      outstanding shares of Workstream.




*Stephen
      Lerch Employment Agreement* *.* On
      April
      4, 2005, we entered into an employment agreement with Stephen Lerch, pursuant
      to
      which Mr. Lerch was appointed as the Executive Vice President and
      Chief Financial Officer/Chief Operating Officer of the Company.





Mr.
      Lerch's employment agreement has a one-year term expiring in April 2006 that
      automatically renews at the end of the initial or any renewal term for an
      additional one-year term unless either party provides prior notice of non
      renewal. Mr. Lerch will earn an annual base salary of not less than $200,000
      and
      will also be entitled to a bonus of $200,000 based on mutually agreed objectives
      being achieved. However, in no event shall such bonus be less than 25% of the
      entitled amount paid on a quarterly basis. Mr. Lerch also receives a car
      allowance of $500 per month. In addition, we granted Mr. Lerch an option to
      purchase 100,000 Common Shares at an exercise price of $4.02 per share, the
      closing price of the shares on April 4, 2005, in accordance with the terms
      and
      conditions of our 2002 Amended and Restated Stock Option Plan, as Amended.
      We
      also granted Mr. Lerch 50,000 Restricted Stock Units that vest one third per
      year over a three-year period beginning on the first anniversary of the grant.
      If we elect to terminate Mr. Lerch’s employment other than for “cause”, Mr.
      Lerch would be entitled to a payment equal to six months’ salary and
      benefits.





7





**ITEM
      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT RELATED
      STOCKHOLDER MATTERS**




**Security
      Ownership of Principal Shareholders**





The
      following table sets forth as of September 25, 2006 certain information with
      respect to the beneficial ownership of each person whom we knew to be the
      beneficial owner of more than 5% of our Common Shares.




**Common
                Shares****Name
                and Address of**
              **Beneficial
                Owner**
            **Number
                of Shares (1)**
            **Percent**Janus
                Capital Corporation
              100
                Fillmore Street, Suite 400
              Denver,
                CO 80206
            5,275,282
            10.35%William
                Blair & Company
              222
                West Adams Street
              Chicago,
                IL 60606
            5,016,812
            9.84%Coghill
                Capital Management LLC
              One
                North Wacker Drive, Suite 4350
              Chicago,
                IL 60606
            4,850,237
            9.52%Magnetar
                Capital LLC
              1603
                Orrington Avenue, 13thfloor
              Evanston,
                IL 60201
            4,901,901
            9.62%Michael
                Mullarkey
              c/o
                Workstream Inc.
              495
                March Road, Suite 300
              Ottawa,
                Ontario, K2K 3G1
            4,637,000
            9.03%Harris
                Investment Management
              190
                South LaSalle Street, 4thFloor
              Chicago,
                IL 60603
            3,925,000
            7.70%





(1)
            With
                respect to each shareholder, includes any shares issuable upon exercise
                of
                options or warrants held by such shareholder that are or will become
                exercisable within 60 days of September 25,
                2006.








8





**Security
      Ownership of Management**





The
      following table sets forth as of September 25, 2006 certain information with
      respect to the beneficial ownership of (i) each director, (ii) each nominee
      for
      election to the board of directors, (iii) our chief executive officer and each
      other executive officer who earned more than $100,000 during fiscal year 2006
      (collectively, the “Named Executive Officers”) and (iv) all the directors and
      executive officers as a group.




**Name
                of Beneficial Owner**
            **Number
                of Shares(1)**
            **Percent
                of Class**Michael
                Mullarkey
            4,637,000
                (2)
            9.03%Michael
                A. Gerrior
            83,667
                (3) (4)
            *Thomas
                Danis
            66,667
                (4) (5)
            *Arthur
                Halloran
            56,667
                (4) (6)
            *John
                Oltman
            26,667
                (4) (7)
            *Mitch
                Tuchman
            67,667
                (4) (7)
            *Steve
                Singh
            26,667
                (4) (7)
            *Stephen
                Lerch
            118,333
                (8) (9)
            *All
                executive officers and directors as a group (8 persons)
            5,083,335 (10)
                (11)
            9.83%





*
      Less
      than 1%





(1)
            With
                respect to each shareholder, includes any shares issuable upon exercise
                of
                options held by such shareholder that are or will become exercisable
                within 60 days of September 25,
                2006.


(2)
            Includes
                400,000 Common Shares issuable upon the exercise of stock
                options.


(3)
            Includes
                29,667 Common Shares issuable upon the exercise of stock
                options.


(4)
            Includes
                20,000 Common Shares issuable upon the vesting of restricted stock
                units.


(5)
            Includes
                46,667 Common Shares issuable upon the exercise of stock
                options.


(6)
            Includes
                26,667 Common Shares issuable upon the exercise of stock
                options.


(7)
            Includes
                6,667 Common Shares issuable upon the exercise of stock
                options.


(8)
            Includes
                33,333 Common Shares issuable upon the exercise of stock
                options.


(9)
            Includes
                50,000 Common Shares issuable upon the vesting of restricted stock
                units.


(10)
            Includes
                556,333 Common Shares issuable upon the exercise of stock
                options.


(11)
            Includes
                170,000 Common Shares issuable upon the vesting of restricted stock
                units.




**ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**




Michael
      Gerrior, a member of our Board of Directors, is a partner in the law firm of
      Perley-Robertson, Hill & McDougall, LLP, which provides ongoing legal
      services to us.





9




**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**





The
      fees
      for all services provided by our independent auditors to us during fiscal year
      2006 and fiscal 2005 are as follows:




Fiscal
                Year 2005
            
            Fiscal
                Year 2006Audit
                Fees
            
            $
            318,054
                CDN
            
            $
            368,282
                CDNAudit
                Related Fees
            
            $
            28,500
                CDN
            
            $
            --Tax
                Fees
            
            $
            319,725
                CDN
            
            $
            25,149
                CDNAll
                Other Fees
            
            $
            --
            
            $
            1,500
                U.S.







**Audit
      Fees**




Audit
      fees include fees billed by PricewaterhouseCoopers LLP for services rendered
      in
      connection with the audit of our annual financial statements and for the reviews
      of our quarterly financial statements and for audit of our internal control
      over
      financial reporting.




**Audit-Related
      Fees**




Audit-related
      fees were incurred in connection with work performed with respect to audits
      and
      reviews of acquired entities and registration statements and other filings
      with
      the Securities and Exchange Commission. All of these fees were pre-approved
      by
      the Audit Committee.




**Tax
      Fees**




Tax
      fees
      relate to tax consultation and compliance services, and work performed with
      respect to registration statements and other filings with the Securities and
      Exchange Commission. All of these fees were pre-approved by the Audit
      Committee.




**All
      Other Fees**




Other
      fees include fees paid to PricewaterhouseCoopers LLP for accounting-related
      research software.






**Audit
      Committee Pre-Approval Policies and Procedures**




Section
      10A(i)(1) of the Exchange Act and related SEC rules require that all auditing
      and permissible non-audit services to be performed by the Company's principal
      accountants be approved in advance by the Audit Committee of the Board of
      Directors. Pursuant to Section 10A(i)(3) of the Exchange Act and related SEC
      rules, the Audit Committee has established procedures by which the Chairman
      of
      the Audit Committee may pre-approve such services provided that the pre-approval
      is detailed as to the particular service or category of services to be rendered
      and the Chairman reports the details of the services to the full Audit Committee
      at its next regularly scheduled meeting.




10





**SIGNATURES**







Pursuant
      to the requirements of Section 13 or 15(d) 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.




WORKSTREAM
              INC.By:
            /s/ Michael
              MullarkeyMichael
              Mullarkey,Chairman
              of the Board and Chief Executive Officer  Dated:
              September
              28, 2006







11




**EXHIBIT
      INDEX**




Exhibit
                    No.
                
                Description31.1
                
                Certification
                    of Michael Mullarkey pursuant to Rule
                    13a-14(a)/15d-14(a).31.2
                
                Certification
                    of Stephen Lerch pursuant to Rule 13a-14(a)/15d-14(a).32.1
                
                Certification
                    of Michael Mullarkey pursuant to 18 U.S.C. Section
                    1350.32.2
                
                Certification
                    of Stephen Lerch pursuant to 18 U.S.C. Section
                    1350.




12