FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


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

                         For Quarter Ended June 30, 2005

                                       OR

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

                For the Transition Period from _______ to _______

                         Commission file number 33-20432

                       MAGNITUDE INFORMATION SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

          Delaware                                75-2228828
         -----------                         --------------------
(State or other Jurisdiction of                  (IRS Employer
 Incorporation or Organization)                Identification No.)

                  401 State Route 24, Chester, New Jersey 07930
               (Address of Principal Executive Office) (Zip Code)

                                 (908) 879-2722
               (Registrant's telephone number including area code)


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 |_|

     The number of shares of Registrant's Common Stock, $0.0001 par value,
           outstanding as of August 2, 2005, was 139,687,612 shares.

<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES




                                      INDEX


                                                                    Page
                                                                   Number

PART  1  -  FINANCIAL INFORMATION

Item 1   Financial Statements (unaudited)

         Consolidated Balance Sheet
          - June 30, 2005                                             3

         Consolidated Statements of Operations
          - Three and six months ended June 30, 2005 and 2004         4

         Consolidated Statements of Cash Flows
          - Six months ended June 30, 2005 and 2004                   5

         Notes to Consolidated Financial Statements                   6 - 12


Item 2   Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                    13

Item 3   Controls and Procedures                                      15


PART II  -  OTHER INFORMATION                                         16 - 17


SIGNATURES                                                            18



                                       2
<PAGE>


PART I  - Item 1   Financial Statements

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 2005
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                                <C>
Assets
     Current Assets
       Cash ....................................................................   $     33,675
       Accounts receivable, net of allowance for
         doubtful accounts of $0 ...............................................         47,175
       Inventory ...............................................................          6,214
       Prepaid expenses ........................................................        146,378
       Miscellaneous receivables ...............................................          2,404
                                                                                   ------------
           Total Current Assets ................................................        235,846
     Prepaid expenses, less current portion ....................................          2,843
     Property and equipment, net of accumulated
     depreciation of $150,282 ..................................................          7,032
     Software, net of accumulated amortization of $1,114,027 ...................        393,263
     Deposits ..................................................................         21,829
                                                                                   ------------
         Total Assets ..........................................................        660,813
                                                                                   ============
Liabilities and Stockholders' Equity (Impairment)

     Current Liabilities
       Accounts payable and accrued expenses ...................................        271,768
       Deferred revenue ........................................................         34,123
       Deferred rental obligation ..............................................          1,045
       Dividends payable .......................................................        529,845
       Loans payable ...........................................................         75,000
       Notes payable ...........................................................         54,500
       Current maturities of long-term debt ....................................        133,419
       Current maturities of capitalized lease obligations .....................          2,978
                                                                                   ------------
           Total Current Liabilities ...........................................      1,102,678
     Capitalized lease obligations, less current portion .......................            256
                                                                                   ------------
         Total Liabilities .....................................................      1,102,934

Stockholders' Equity (Impairment)
     Preferred Stock, $0.001 par value, non-voting, 3,000,000 shares authorized:
     2,500 shares have been designated Cumulative Preferred Stock,
     of which 1 share is issued and outstanding ................................              0
     300,000 shares have been designated Series A Convertible Preferred Stock,
     350,000 shares have been designated Series B Convertible Preferred Stock,
     120,000 shares have been designated Series C Convertible Preferred Stock,
     500,000 shares have been designated Series D Convertible Preferred Stock,
     500,000 shares have been designated Series E Convertible Preferred Stock,
     of which a combined total 193,190 shares are issued and outstanding .......            193
     Common Stock, $0.0001 par value, 200,000,000 shares authorized;
     issued and outstanding 139,687,612 shares .................................         13,969
     Additional paid-in capital ................................................     28,760,188
     Accumulated (deficit) .....................................................    (29,216,471)
                                                                                   ------------
         Total Stockholders' Equity (Impairment) ...............................       (442,121)

         Total Liabilities and Equity (Impairment) .............................   $    660,813
                                                                                   ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                       3
<PAGE>



               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                   Three Months Ended                    Six Months Ended
                                                         June 30,                           June 30,
                                                  2005              2004              2005              2004
                                             --------------    --------------    --------------    --------------
<S>                                          <C>               <C>               <C>               <C>
Total Revenues ...........................   $       45,569    $       20,294    $       64,833    $       64,874

      Cost of Goods Sold .................           36,375            39,066            72,742            78,021
                                             --------------    --------------    --------------    --------------

Gross Profit (Loss) ......................            9,194           (18,772)           (7,909)          (13,147)

      Selling expenses ...................          116,399           111,412           212,618           229,649
      Stock-based compensation ...........           57,852            85,978           123,975           236,033
      Research and development cost ......           12,118                --            14,618             1,530
      General and administrative expenses           394,133           329,935           816,934           762,455
                                             --------------    --------------    --------------    --------------

Loss from Operations .....................         (571,308)         (546,097)       (1,176,054)       (1,242,814)

Other Income (Expense)
      Miscellaneous income ...............               --                --            17,537                --
      Misc. non-operating expenses .......               --           (14,489)               --           (14,489)
      Interest income ....................                4               160                 6               186
      Interest expense ...................           (4,392)           (3,567)           (7,574)           (9,389)
                                             --------------    --------------    --------------    --------------
          Total Other Income (Expense) ...           (4,388)          (17,896)            9,969           (23,692)
                                             --------------    --------------    --------------    --------------

Loss before Provision for Income Taxes ...         (575,696)         (563,993)       (1,166,085)       (1,266,506)

      Provision for income taxes .........               --                --              (630)               --
                                             --------------    --------------    --------------    --------------

Net Loss .................................   $     (575,696)   $     (563,993)   $   (1,166,715)   $   (1,266,506)
                                             ==============    ==============    ==============    ==============

Dividends on Preferred Stock .............           28,380           835,899            56,759         1,609,715
                                             --------------    --------------    --------------    --------------

Net Loss applicable to Common Shareholders   $     (604,076)   $   (1,399,892)   $   (1,223,474)   $   (2,876,221)
                                             ==============    ==============    ==============    ==============
Net Loss per Common Share ................   $       (0.004)   $       (0.017)   $       (0.009)   $       (0.036)
                                             ==============    ==============    ==============    ==============
Weighted Average Number of
      Common Shares Outstanding ..........      139,104,279        81,805,474       135,880,945        79,971,031
                                             ==============    ==============    ==============    ==============
</TABLE>



The accompanying notes are an integral part of the consolidated financial
statements.


                                       4
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                         Six Months Ended
                                                             June 30,
                                                     2005              2004
                                                 --------------    --------------
<S>                                              <C>               <C>
Cash Flows from Operating Activities
     Net Loss ................................   $   (1,166,715)   $   (1,266,506)
     Adjustments to Reconcile Net Loss
     to Net Cash Used by Operations
        Depreciation and amortization ........           77,894            82,982
        Securities issued for various expenses          391,580           314,300
     Decreases (Increases) in Assets
        Accounts receivable ..................          (16,544)           34,432
        Miscellaneous receivables ............            8,918                --
        Inventories ..........................               --            14,489
        Prepaid expenses .....................          (60,410)         (129,101)
        Other assets .........................               --            10,577
     Increases (Decreases) in Liabilities
        Deferred revenues ....................          (15,249)           38,925
        Accounts payable and accrued expenses          (126,263)          (66,069)
                                                 --------------    --------------
Net Cash Used by Operating Activities ........         (906,789)         (965,971)

Cash Flows from Investing Activities
     Purchases of equipment and fixtures .....           (2,160)           (3,443)
                                                 --------------    --------------
Net Cash Used by Investing Activities ........           (2,160)           (3,443)

Cash Flows from Financing Activities
     Proceeds from loans and notes payable ...           29,500                --
     Repayment of loans and notes ............               --          (282,851)
     Payment of dividends ....................           (1,020)             (900)
     Issuance of common and preferred stock ..          870,000         1,165,114
                                                 --------------    --------------
Net Cash Provided by Financing Activities ....          898,480           881,363

Net Decrease in Cash .........................          (10,469)          (88,051)
Cash at Beginning of Period ..................           44,144            97,978
                                                 --------------    --------------
Cash at End of Period ........................   $       33,675    $        9,927
                                                 ==============    ==============
</TABLE>






The accompanying notes are an integral part of the consolidated financial
statements.


                                       5
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Nature of Organization

      Magnitude Information Systems, Inc. (the "Company") was incorporated as a
      Delaware corporation on April 19, 1988 under the name Fortunistics, Inc.
      On November 18, 1998, the Company changed its name to Magnitude
      Information Systems, Inc.

      The Company and Magnitude, Inc. are two separate legal entities whereby
      Magnitude, Inc. operates as a subsidiary of the Company. However, the
      operations of the combined entity are currently comprised solely of the
      operations of Magnitude, Inc. The 1% of Magnitude, Inc. not owned by the
      Company constitutes a minority interest which is valued at $0.

      The Company's primary product is an integrated suite of proprietary
      software modules marketed under the name ErgoEnterpriseTM which are
      designed to help individual computer users and businesses increase
      productivity and reduce the risk of potentially preventable repetitive
      stress injury (RSI). These software modules can be applied individually or
      together in a comprehensive ergonomic and early intervention program that
      seeks to modify a user's behavior by monitoring computer usage patterns
      over time and warning the user when to break a dangerous trend in
      repetitive usage of an input device, such as a keyboard or mouse. The
      product was developed to train people working on computers, monitor
      computer-use related activities and evaluate a user's risk exposure and
      propensity towards injury or loss of effectiveness in connection with
      his/her day-to-day work. Moreover, the software enables a company to not
      only address the issue of health risks involving employees and to minimize
      resulting potential liabilities, but delivers a powerful tool to increase
      overall productivity.

     Basis of Presentation

      The accompanying unaudited consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles for
      interim financial statements and with the instructions to Form 10-QSB and
      Article 10 of Regulation S-X. Accordingly, they do not include all of the
      information and disclosures required for annual financial statements.
      These financial statements should be read in conjunction with the
      consolidated financial statements and related footnotes included in the
      Company's annual report on Form 10-KSB for the year ended December 31,
      2004, and quarterly report on Form 10-QSB for the quarter ended March 31,
      2005.

      In the opinion of the Company's management, all adjustments (consisting of
      normal recurring accruals) necessary to present fairly the Company's
      financial position as of June 30, 2005, the results of operations for the
      three and six months ended June 30, 2005 and 2004, and the cash flows for
      the six months ended June 30, 2005 and 2004, have been included.

     Principles of Consolidation

      The consolidated financial statements include the accounts of Magnitude
      Information Systems, Inc. and its subsidiary, Magnitude, Inc. All
      significant inter-company balances and transactions have been eliminated.

     Depreciation and Amortization

      Property and equipment are recorded at cost. Depreciation on equipment,
      furniture and fixtures and leasehold improvements is computed on the
      straight-line method over the estimated useful lives of such assets
      between 3-10 years. Maintenance and repairs are charged to operations as
      incurred. Software assets are capitalized at the fair value of stock
      exchanged/granted upon acquisition and are amortized on the straight-line
      method on a product-by-product basis over the estimated economic life of
      the products which has been determined to be 10 years.


                                       6
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

     Inventory
         Inventory is stated at the lower of cost (first in, first out) or
         market value and consists primarily of packaged software.

     Evaluation of Long Lived Assets
         Long-lived assets are assessed for recoverability on an ongoing basis.
         In evaluating the fair value and future benefits of long-lived assets,
         their carrying value would be reduced by the excess, if any, of the
         long-lived asset over management's estimate of the anticipated
         undiscounted future net cash flows of the related long-lived asset.

     Securities Issued for Services

         The Company accounts for stock, stock options and stock warrants issued
         for services and compensation by employees under the intrinsic value
         method. For non-employees, the fair market value of the Company's stock
         on the date of stock issuance or option/grant is used. The Company
         determined the fair market value of the warrants/options issued under
         the Black-Scholes Pricing Model. Effective January 1, 1996, the Company
         adopted Statement of Financial Accounting Standard (SFAS) No. 123,
         "Accounting for Stock-based Compensation". The statement generally
         suggests, but does not require, employee stock-based compensation
         transactions to be accounted for based on the fair value of the
         services rendered or the fair value of the equity instruments issued,
         whichever is more reliably measurable. As permitted by the statement,
         the Company has elected to continue to follow the requirements of
         Accounting Principles Board Opinion No. 25, "Accounting for Stock
         Issued to Employees' for employees under the intrinsic value method.
         The adoption of SFAS No. 123 does not have a material impact on the
         financial statements.

     Advertising Costs
         Advertising costs are charged to operations when incurred. Advertising
         expense was $496 and $491 for the six months ended June 30, 2005 and
         2004, respectively.

     Income Taxes

         The Company provides for income taxes based on enacted tax law and
         statutory tax rates at which items of income and expenses are expected
         to be settled in the Company's income tax return. Certain items of
         revenue and expense are reported for Federal income tax purposes in
         different periods than for financial reporting purposes, thereby
         resulting in deferred income taxes. Deferred taxes are also recognized
         for operating losses that are available to offset future taxable
         income. Valuation allowances are established when necessary to reduce
         deferred tax assets to the amount expected to be realized. The Company
         has incurred net operating losses for financial-reporting and
         tax-reporting purposes. Accordingly, for Federal and state income tax
         purposes, the benefit for income taxes has been offset entirely by a
         valuation allowance against the related federal and state deferred tax
         asset for the year ended December 31, 2004.

     Net Loss Per Share

         Net loss per share, in accordance with the provisions of Financial
         Accounting Standards Board No. 128, "Earnings Per Share" is computed by
         dividing net loss by the weighted average number of shares of Common
         Stock outstanding during the period. Common Stock equivalents have not
         been included in this computation since the effect would be
         anti-dilutive.


                                       7
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

     Revenue Recognition
         The Company's revenue recognition policy for software sales is in
         accordance with Accounting Statement of Position (SOP) 97-2 "Software
         Revenue Recognition" and SOP 98-9 "Software Revenue recognition" which
         modifies SOP 97-2. Revenue is recognized at the time of licensing
         provided that the resulting receivable is deemed probable of collection
         and is fixed or determinable. Revenue from software maintenance
         contracts is recognized ratably as earned. When a sales contract
         includes multiple elements, revenues are allocated to the various
         elements based on Company-specific objective evidence of fair value,
         regardless of any separate prices for each element that may be stated
         within the contract.

     Use of Estimates
         The preparation of financial statements in conformity with generally
         accepted accounting principles 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.

2. GOING CONCERN

     The ability of the Company to continue its operations is dependent on
     increasing sales and obtaining additional capital and financing. In their
     report for the fiscal year ended December 31, 2004, our auditors had
     expressed an opinion that, as a result of the losses incurred, there was
     substantial doubt regarding our ability to continue as a going concern. The
     accompanying financial statements do not include any adjustments that might
     be necessary if the Company were unable to continue as a going concern.
     Management's plans are to continue seeking additional working capital
     through equity and debt placements with private and institutional
     investors.

3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

     The Company maintains cash balances in a financial institution which is
     insured by the Federal Deposit Insurance Corporation up to $100,000.
     Balances in these accounts may, at times, exceed the federally insured
     limits.

     The Company provides credit in the normal course of business to customers
     located throughout the U.S. and overseas. The Company performs ongoing
     credit evaluations of its customers and maintains allowances for doubtful
     accounts based on factors surrounding the credit risk of specific
     customers, historical trends, and other information.

4. PREPAID EXPENSES

     Prepaid Expenses at the end of the quarter included $72,067 and $33,990
     representing, respectively, the unamortized portions of the value of
     restricted stock and options issued to the Company's president in lieu of
     cash salary and to certain consultants for services rendered, and
     approximately $42,000 prepaid rent and insurance costs.

5. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
<S>                                                                                        <C>
     Property and equipment consist of the following at June 30, 2005:
              Equipment                                                                    $      85,084
              Furniture and fixtures                                                              72,230
                                                                                           --------------

                                                                                                 157,314

              Less accumulated depreciation                                                      150,282
                                                                                           --------------

                                        Total                                              $       7,032
                                                                                           ==============
</TABLE>

Depreciation expense charged to operations was $5,125 and $5,021 in the first
six months of 2005 and 2004, respectively.


                                       8
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following at June 30,
2005:

              Accounts payable                             $   128,681

              Accrued interest                                   58,602

              Accrued salaries                                   27,841

              Accrued professional fees                          51,644

              Miscellaneous accruals                              5,000
                                                           -------------

                                    Total                  $    271,768
                                                           =============


7. DEFERRED REVENUES

     Deferred revenues at June 30, 2005 consist of prepaid software maintenance
     and support charges which are amortized ratably over the remaining duration
     of the underlying maintenance agreements.

8. LOANS PAYABLE

     The Company and Magnitude, Inc. had borrowings under short term loan
     agreements with the following terms and conditions at June 30, 2005:


<TABLE>
<CAPTION>
     <S>                                                                            <C>
     On December 4, 1996, Magnitude, Inc. repurchased 500,000 shares of its
     common stock and retired same against issuance of a promissory note
     maturing twelve months thereafter accruing interest at 5% per annum and due
     December 4, 1998. This note is overdue at June 30, 2005 and no demand for
     payment has been made.                                                         $         75,000
                                                                                    ----------------
             Total                                                                  $         75,000
                                                                                    ================

9. NOTES PAYABLE


     At December 31, 1999 the Company had $1,475,000 of notes outstanding
     related to a June 1995 private placement offering. During 2000 the holders
     of $1,450,000 worth of notes agreed to accept partial repayment of
     approximately 30% of the note balances and converted the remaining balances
     into common shares or convertible preferred shares. The total amount of
     non-converted notes outstanding at June 30, 2005 is $25,000. Attempts to
     locate the holder of this note, to settle this liability, have been
     unsuccessful.                                                                            25,000

     During the second quarter in 2005, the Company's president extended a short
     term loan evidenced by a promissory note issued by the Company. The loan
     carries interest at the rate of 10% p.a. and a loan origination fee of
     $1,180.                                                                        $         29,500
                                                                                    ----------------


             Total                                                                  $         54,500
                                                                                    ================
</TABLE>


                                       9
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

10. LONG-TERM DEBT

       Long-term debt as of June 30, 2005 is comprised of the following:

<TABLE>
<CAPTION>
<S>                                                                                 <C>
     Pursuant to the February 2, 1998, Agreement and Plan of Merger with Rolina
     Corporation, the Company had issued 155,556 shares (the "Shares") of its
     common stock to the principal of Rolina Corporation who currently serves as
     the Company's Chief Executive Officer and Board Chairman, and had issued a
     Put Option for such Shares at a price of $2.41 per share in accordance with
     the provisions contained therein, with notice for exercise eligible to be
     given at any time after February 1, 2000, and before 5:00 p.m. on the 90th
     day thereafter. This liability was converted into a Company obligation for
     $274,890 maturing March 31, 2002 and a demand loan for $100,000 both
     carrying interest at the rate of 7% per year, subsequently increased to
     10%, payable monthly. The demand portion of this note was repaid in April
     2002 and the due date for $274,890 of the remaining balance was extended to
     July 1, 2003. Subsequently, the maturity of the unpaid balance was changed
     to a portion of $174,890 payable on demand, and a portion of $100,000 due
     and payable on January 2, 2005. During the first quarter of 2004, $175,000
     was repaid and the maturity of the unpaid balance was changed to "due upon
     demand". The obligation includes an option to the holder for conversion of
     the outstanding principal into shares of the Company's common
     stock at the rate of $0.06 per common share equivalent.                        $         99,890

     Discounted present value of a non-interest bearing $70,000 settlement with
     a former investor of Magnitude, Inc. to be paid in 24 equal monthly
     payments commencing July 1, 1997. The imputed interest rate used to
     discount the note is 8% per annum. This obligation is in default.                        33,529
                                                                                    ----------------

             Total                                                                           133,419
                  Less current maturities                                                    133,419
                                                                                    ----------------
                  Long-term debt, net of current maturities                         $              -
                                                                                    ================
</TABLE>

11. INCOME TAXES

       The Company's total deferred tax asset and valuation allowance are as
follows:

                                                             December 31,
                                                                  2004
                                                            ---------------

           Total deferred tax asset, non-current            $     7,882,000
           Less valuation allowance                              (7,882,000)
                                                            ---------------
           Net deferred tax asset, non-current              $             -
                                                            ===============

       At December 31, 2004, the Company had available approximately $24,377,000
       of net operating losses to carry-forward and which may be used to reduce
       future federal taxable income and expire between December 31, 2007 and
       2024.

       At December 31, 2004, the Company had available approximately $3,616,000
       of net operating losses to carry-forward and which may be used to reduce
       future state taxable income which expire December 31, 2011.


                                       10
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2005

12. CAPITALIZED LEASE OBLIGATIONS

       The Company leases office equipment under a non-cancelable capital lease
       agreement expiring in January 2006. The capital lease obligation has been
       recorded at the present value of future minimum lease payments,
       discounted at an interest rate of 6.00%. The capitalized cost of
       equipment at December 31, 2004 amounted to $2,442 net of accumulated
       depreciation of $6,067.

       The following is a schedule of minimum lease payments due under capital
leases at December 31, 2004:

<TABLE>
<CAPTION>
<S>                                                                                 <C>
         Total minimum capital lease payments                                       $         3,349
         Less amounts representing interest                                                     115
                                                                                    ---------------
         Present value of net minimum capital lease payments                                  3,234
         Less current maturities of capital lease obligations                                 2,978
                                                                                    ---------------
         Obligations under capital leases, excluding current maturities             $           256
                                                                                    ===============
</TABLE>

13. COMMITMENTS AND CONTINGENCIES

     Lease Agreement

     On March 15, 2000, the Company entered into a lease agreement for office
     space which is utilized for the Company's principal offices. Such lease
     commenced April 15, 2000 and expired on March 31, 2005. The Company has
     recently negotiated a lease renewal which extended the term of the lease to
     March 31, 2007 at a monthly rental of $10,000.

     Under the lease agreement, the Company is required to make future minimum
     lease payments as follows in addition to a pro-rata share of certain
     operating expenses:


                Year Ending December 31,
                         2005                       $     60,000
                         2006                            120,000
                                                    $     30,000
                         2007                       ------------

                             Total minimum payments $    210,000
                                                    ============
  Employment Agreements

     The Company has entered into employment agreements with certain key
     personnel which provide for a base salary, yearly bonuses in common stock
     and/or options of the Company and other benefits. Termination of the
     agreements may be made by either party with advance notice.


RELATED PARTY TRANSACTIONS

     In May 2005 the Company issued 1,000,000 shares of common stock,
     accompanied by warrants for the purchase of 1,000,000 common shares,
     exercisable during three years at the price of $0.15 per share, to the
     Company's president and chief executive officer, in lieu of $100,000 salary
     payable in cash.


                                       11
<PAGE>

     Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

During the quarter we intensified our marketing efforts for our
ErgoEnterprise(TM) software solutions in the framework of our cooperative
programs with our major strategic partner, Aon Risk Services Division with the
goal of introducing Aon's clients to our software. We expect these ventures to
produce tangible results in terms of software licensing contracts during the
remainder of 2005. No such sales were as yet recorded during the first two
quarters in 2005, however, we wrote some smaller orders outside of that
marketing program. Revenues for the quarter totaled $45,569, compared to the
$20,294 achieved in the second quarter of 2004. The six months figures were
$64,833 and $64,874 for 2005 and 2004, respectively.

Gross profits for the quarter amounted to $9,194, including a fixed charge for
amortization of certain proprietary software assets. Such software assets
underlie the Company's products and are being amortized on a straight line over
10 years, resulting in a level charge of approximately $12,000 per month to
cost-of-goods-sold. Our expense and cost structure was essentially unchanged
from prior periods, and, after deducting selling- and general and administrative
expenses, stock-based compensation and R&D expenses of $580,502 which exceeded
the $527,325 recorded in 2004 by 10%, the Company realized a loss from
operations of $571,308, compared to an operating loss of $546,097 in the second
quarter in 2004. Non-operating income and expenses consisted of $4,388 net
interest expense. The period result was a net loss of $575,696, compared to a
loss of $563,993 for the same period in 2004.

After accounting for dividend accruals on outstanding preferred stock which
totaled $28,380, the net loss for the quarter applicable to common shareholders
was $604,076 or $0.004 per share, compared to a loss of $1,399,892 or $0.02 per
share for the same quarter in the previous year.

Liquidity and Capital Resources

In the absence of cash flow from operations, required working capital to finance
ongoing operations was supplied almost entirely from new equity capital. During
the quarter, the Company attracted $200,000 in new equity funding in the form of
cash.

At June 30, 2005, the deficit in working capital amounted to $866,832 as
compared to $977,831 at December 31, 2004. Stockholders' equity showed an
impairment of $442,121 at the end of the quarter, compared to an impairment of
$480,228 at the beginning of the year. The negative cash flow from operations
for the six months ended June 30, 2005 totaled approximately $907,000 and was
substantially financed by new equity which was obtained through private
placements. The new equity placements were consummated by issuance of common
stock and convertible preferred stock to accredited private investors in the
United States. Details of such transactions can be found in the "Changes and
Issuance of Securities" section of this report and the report on Form 10-QSB for
the first quarter in 2005. In April 2005 the Company had filed a new
registration statement on Form SB-2 and amendments to three previously filed
registration statements on Form SB-2, all of which covered common shares
directly issued as well as common shares underlying the previously issued
convertible preferred stock and warrants, in connection with these and prior
financing transactions. These filings were made on behalf of certain investors
in the Company's equities and proceeds of any sales of such registered
securities will accrue entirely to such investors.

At the time of this submission, the Company had no bank debt. At June 30, 2005
its short-term liabilities, aside from trade payables and accruals, consisted of
certain notes and loans aggregating approximately $263,000 of which
approximately $130,000 was owed to the chairman and chief executive officer of
the Company in form of a demand notes (see "Related Party Transactions").
Current liabilities include $529,845 unpaid dividends on outstanding preferred
stock. Such dividends will be paid only if and when capital surplus and
cash-flow from operations are sufficient to cover the outstanding amounts
without thereby unduly impacting the Company's ability to continue operating and
growing its business.

Current cash reserves and net cash flow from operations expected during the near
future are inadequate when measured against present and anticipated future
needs, and the Company's financial situation remains precarious. In order to
remedy the current liquidity constraints and address any "going-concern" issues,
management is currently negotiating with several financing sources with the goal
of obtaining commitments for further investments in form of debt or equity
capital, to be effected during the upcoming quarter. There can be no assurance,
however, that these negotiations will lead to the desired outcome and that the
Company will be successful in its efforts to obtain the working capital needed
to fund on-going operations. If the Company failed to do so, either by not
acquiring sufficient funds, or not receiving such funds in a timely manner,
management may be forced to drastically cut back operations.


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<PAGE>

Item 3.    CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

         As of the end of the period covered by this Form 10-QSB for the quarter
ended June 30, 2005, an evaluation was undertaken by the Company's Chief
Executive Officer and Chief Financial Officer of the effectiveness of the design
and operation of the Company's disclosure controls and procedures, as defined in
Exchange Act Rule 13(a)-14(c), and; based upon that evaluation, Company
management, including the Chief Executive Officer and the Chief Financial
Officer, has concluded that the Company's disclosure controls and procedures
were effective as of the end of the period covered by the subject Form 10-QSB
and ensured that all material information required to be disclosed in the
subject Form 10-QSB, was recorded, processed, summarized and reported as of the
end of the period covered by the subject Form 10-QSB.

         The Company maintains a system of internal controls designed to provide
reasonable assurance that: (i) the Company's transactions are properly
authorized; (ii) the Company's assets are protected against unauthorized or
improper use, and (iii) the Company's transactions are properly recorded and
reported, all to permit the preparation of complete and accurate financial
statements in conformity with generally accepted accounting principles.

(b) Changes in Internal Control over Financial Reporting

           Since the date of the most recent evaluation of the Company's
internal controls by the Chief Executive Officer and Chief Financial Officer,
there have not been any significant changes in the Company's internal controls
or other factors for the period covered by the subject Form 10-QSB that
materially affected or were likely to materially affect the Company's internal
control over financial reporting.


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<PAGE>

PART  II  -  OTHER INFORMATION

Item 1   LEGAL PROCEEDINGS

On March 21, 2005, the Company filed a patent infringement lawsuit in the United
States District Court, District of New Jersey, against Niche Software, Ltd. of
New Zealand, alleging that its software product called Workplace(TM) willfully
infringed on the Company's patent underlying its ErgoEnterprise(TM) product
line. The Company intends to vigorously prosecute its infringement claims
against this infringer. Except for this infringement lawsuit, the Company is not
a party in any legal proceedings.


Item 2   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      a)    Issuance of unregistered securities

            During the quarter ended June 30, 2005, the Company issued the
            following unregistered securities:

            (i)   2,000,000 shares of common stock, accompanied by warrants for
                  the purchase of 2,000,000 common shares, exercisable during
                  three years at the price of $0.15 per share, to four
                  accredited investors pursuant to private placement
                  subscriptions, issued in reliance upon exemptions provided
                  under Section 4(2), Rule 506 of Regulation D of the Securities
                  Act, altogether resulting in the receipt by the Company of
                  $200,000 in cash.

            (ii)  1,000,000 shares of common stock, accompanied by warrants for
                  the purchase of 1,000,000 common shares, exercisable during
                  three years at the price of $0.15 per share, to the Company's
                  president and chief executive officer, in lieu of $100,000
                  salary payable in cash.

      (b)   Not applicable

      (c)   None


Item 3   DEFAULTS UPON SENIOR SECURITIES

      The Company, as of the date of this filing, is in arrears on the payment
      of certain dividends on its Series A, C, and D Senior Convertible
      Preferred Stock. Such arrears total approximately $516,000. These
      dividends have been accrued, however, the Company's management has
      refrained from making payments at this time because of the absence of
      positive equity and/or surplus funds.

Item 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         -  None

Item 5   OTHER INFORMATION

         -  None


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<PAGE>

Item 6   EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            (3)(i) - Articles of Incorporation and Amendments thereto,
            incorporated herein by reference to Exhibits of previous filings
            with the Commission.

            (3)(ii) - By-laws of the Company, incorporated herein by reference
            to Exhibits of previous filings with the Commission.

            (31.1) - Certification of Steven D. Rudnik, Chief Executive Officer,
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            (31.2) - Certification of Joerg H. Klaube, Chief Financial Officer,
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            (32.1) - Certification of Steven D. Rudnik, Chief Executive Officer,
            pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18
            U.S.C. Section 1350

            (32.2) - Certification of Joerg H. Klaube, Chief Financial Officer,
            pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18
            U.S.C. Section 1350

      (b)   Reports on Form 8-K:

      (iii) On April 25, 2005, the Company filed a report on Form 8-K, informing
            about the Company's publishing of certain ergonomic guidelines for
            administrative staff.

            On May 17, 2005, the Company filed a report on Form 8-K, informing
            about the conversion of a portion of the Company president's 2005
            salary, amounting to $100,000 into 1,000,000 common shares.


                                       15
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned, thereunto duly authorized.



                                 MAGNITUDE INFORMATION SYSTEMS, INC.




Date:   August 12, 2005          By: /s/  Steven D. Rudnik
                                     -----------------------------------------
                                          Steven D. Rudnik
                                          Chairman and Chief Executive Officer


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