10-Q

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

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 September 30, 2007

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________

Commission file number 000-23967

WIDEPOINT CORPORATION

(Exact name of registrant as specified in its charter)

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

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

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

        Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes              No   X  

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

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

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

As of November 6, 2007, 52,558,699 shares of common stock, $.001 par value per share, were outstanding.

WIDEPOINT CORPORATION

INDEX

		Page No.
Part I.    FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2007
	(unaudited) and December 31, 2006 (unaudited)	1
	Condensed Consolidated Statements of Operations for the three and nine
	months ended September 30, 2007 and 2006 (unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the three and nine
	months ended September 30, 2007 and 2006 (unaudited)	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial	17
	Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
Part II.    OTHER INFORMATION
Item 1A.	Risk Factors	25
Item 6.	Exhibits	26
SIGNATURES		28
CERTIFICATIONS

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

Consolidated Balance Sheets	September 30,			December 31,
	2007			2006
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	2,861,982		$	2,774,813
Accounts receivable		3,682,709			6,220,444
Prepaid expenses and other assets		323,591			463,369
Total current assets		6,868,282			9,458,626
Property and equipment, net		267,728			205,231
Goodwill		2,526,110			2,526,110
Intangibles, net		1,118,699			1,358,212
Other assets		106,947			56,192
Total assets	$	10,887,766		$	13,604,371
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,987,008		$	4,364,747
Accrued expenses		909,348			786,842
Deferred revenue		175,730			564,594
Short-term portion of deferred rent		--			3,057
Short-term portion of capital lease obligation		52,725			45,020
Total current liabilities		3,124,811			5,764,260
Capital lease obligation, net of current portion		38,360			67,851
Total liabilities		3,163,171			5,832,111
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares
authorized; 0 and 195,214 shares issued and outstanding,
respectively,		--			195
Common stock, $0.001 par value; 110,000,000 shares authorized; 52,558,699 and
50,494,759 shares issued and outstanding, respectively		52,559			50,495
Stock warrants		38,666			38,666
Additional paid-in capital		60,816,310			60,667,229
Accumulated deficit		(53,182,940	)		(52,984,325	)
Total stockholders’ equity		7,724,595			7,772,260
Total liabilities and stockholders’ equity	$	10,887,766		$	13,604,371

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

1

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
	(unaudited)
Revenues, net	$	4,005,463		$	3,208,261		$	10,146,942		$	10,734,027
Cost of sales (including amortization and depreciation
of $112,749, $102,127, $332,867, and $306,090,
respectively)		2,873,643			2,327,930			7,262,276			8,322,886
Gross profit		1,131,820			880,331			2,884,666			2,411,141
Sales and marketing		239,248			248,730			685,857			662,121
General & administrative		710,956			845,311			2,413,017			2,473,663
Depreciation expense		22,599			7,202			59,773			20,927
Income (Loss) from operations		159,017			(220,912	)		(273,981	)		(745,570	)
Interest income		21,944			29,122			83,942			67,887
Interest expense		(2,704	)		(573	)		(8,576	)		(2,544	)
Net income (loss) before income tax	$	178,257		$	(192,363	)	$	(198,615	)	$	(680,227	)
Income tax benefit, net		--			--			--			83
Net income (loss)	$	178,257		$	(192,363	)	$	(198,615	)	$	(680,144	)
Basic net income (loss) per share	$	0.003		$	(0.004	)	$	(0.004	)	$	(0.015	)
Basic weighted average shares outstanding		52,558,699			47,442,123			52,348,799			44,089,874
Diluted net income (loss) per share	$	0.003		$	(0.004	)	$	(0.004	)	$	(0.015	)
Diluted weighted average shares outstanding		57,470,064			47,442,123			52,348,799			44,089,874

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

2

WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
	(unaudited)
Cash flows from operating activities:
Net income (loss)	$	178,257		$	(192,363	)	$	(198,615	)	$	(680,144	)
Adjustments to reconcile net (loss)/income to net cash
provided by operating activities:
Depreciation expense		34,241			8,221			89,318			23,695
Amortization expense		101,107			101,108			303,322			303,322
Stock compensation expense		--			5,625			--			29,094
Stock options expense		31,090			112,236			117,753			265,628
Changes in assets and liabilities
Accounts receivable		(869,338	)		1,732,571			2,537,735			1,016,516
Prepaid expenses and other current assets		136,795			67,966			139,778			(10,467	)
Other assets		(49,536	)		2,274			(50,755	)		38,027
Accounts payable and accrued expenses		24,488			(1,649,235	)		(2,618,947	)		(667,464	)
Net cash (used in) provided by operating activities	$	(412,896	)	$	188,403		$	319,589		$	318,207
Cashflows from investing activities:
Purchase of property and equipment		(6,799	)		(20,665	)		(135,429	)		(35,862	)
Software development costs		--			--			(63,809	)		--
Net cash used in investing activities	$	(6,799	)	$	(20,665	)	$	(199,238	)	$	(35,862	)
Cashflows from financing activities:
Principal payments under capital lease
obligation		(13,019	)		--			(38,172	)		--
Costs related to registration statement		--			(40,786	)		(29,720	)		(372,533	)
Proceeds from exercise of stock options		--			36,288			34,710			180,331
Proceeds from exercise of warrants		--			160,000			--			204,571
Costs related to warrant exercise		--			--			--			(166,600	)
Net cash (used in) provided by
financing activities	$	(13,019	)	$	155,502		$	(33,182	)	$	(154,231	)
Net increase (decrease) in cash	$	(432,714	)	$	323,240		$	87,169		$	128,114
Cash and cash equivalents, beginning of period	$	3,294,696		$	2,331,509		$	2,774,813		$	2,526,635
Cash and cash equivalents, end of period	$	2,861,982		$	2,654,749		$	2,861,982		$	2,654,749
Supplementary Information:
Liabilities incurred but not yet paid relating to
Registration statement	$	--		$	15,570		$	--		$	59,222
Noncash investing and financing activity -
capital leases for acquisition of
property and equipment		--			--			16,386			--
Cash paid for interest	$	2,704		$	--		$	8,576		$	--

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

3

WIDEPOINT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation, Organization and Nature of Operations

The consolidated balance sheet as of September 30, 2007, the consolidated statements of operations for the three and nine months ended September 30, 2007 and September 30, 2006, and the consolidated statements of cash flows for the nine months ended September 30, 2007 and September 30, 2006 have been prepared by the Company and are unaudited. The consolidated balance sheet as of December 31, 2006 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

The unaudited condensed consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to such regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is the opinion of management that all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results are reflected in the interim periods presented. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. The results of operations for the three and nine months ended September 30, 2007 are not indicative of the operating results for the full year.

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

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

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

4

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

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

2. Significant Accounting Policies

Principles of Consolidation

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

Use of Estimates

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

Cash and Cash Equivalents

Investments purchased with original maturities of three months or less are considered cash equivalents for purposes of these consolidated financial statements. The Company maintains cash and cash equivalents with various major financial institutions. Included in the September 30, 2007 cash balances was $1,917,458 in interest bearing balances in one bank, mostly in excess of federally insured amounts, as compared to $1,924,324 in interest bearing balances in one bank for December 31, 2006. The Company places its temporary cash investments with high credit-quality financial institutions, and as a result, the Company believes that no significant credit risk exists with respect to these cash investments.

Accounts Receivable

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

5

The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Description	Balance at Beginning of Period		Additions Charged to Costs and Expenses		Deductions		Balance at End of Period
For the quarter ended September 30, 2006,
Allowance for doubtful accounts	$	--	$	20,000	$	20,000	$	--
For the quarter ended September 30, 2007,
Allowance for doubtful accounts	$	--	$	14,400	$	--	$	14,400

Unbilled accounts receivable on time-and-materials contracts represent costs incurred and gross profit recognized near the period-end but not billed until the following period. Unbilled accounts receivable on fixed-price contracts consist of amounts incurred that are not yet billable under contract terms. At September 30, 2007 and December 31, 2006, unbilled accounts receivable totaled $529,848 and $354,123, respectively.

Revenue Recognition

The majority of the Company’s revenues are derived from cost-plus, or time-and-materials contracts. Under cost-plus contracts, revenues are recognized as costs are incurred and include an estimate of applicable fees earned. For time-and-material contracts, revenues are computed by multiplying the number of direct labor-hours expended in the performance of the contract by the contract billing rates and adding other billable direct costs. In the event of a termination of a contract, all billed and unbilled amounts associated with those task orders where work has been performed would be billed and collected. The termination provisions of the contract would be accounted for at the time of termination. Any deferred and/or amortization cost would either be billed or expensed depending upon the termination provisions of the contract. Further, the Company has had no material history of losses nor has it identified any material specific risk of loss at September 30, 2007 or on December 31, 2006 due to termination provisions and thus has not recorded provisions for such events.

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

Significant Customers

For the quarter ended September 30, 2007, two customers, the GSA Aces eOffers Program and Lockheed Martin represented approximately 12% and 11% of revenues, respectively. Due to the nature of our business and the relative size of certain contracts, which are entered into in the ordinary course of business, the loss of any single significant customer could have a material adverse effect on results. For the quarter ended September 30, 2006, no customer represented over 10% of revenues. For the nine- month period ended September 30, 2007 no customers represented over 10% of revenues. For the nine-month period ended September 30, 2006, one customer, the FSS HQ CPSG represented approximately 18% of revenues.

Fair value of financial instruments  

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

6

Concentrations of Credit Risk

Financial instruments potentially subject the Company to credit risk, which consist of cash and cash equivalents and accounts receivable. As of September 30, 2007, two customers, Lockheed Martin and GSA/FEDERAL ACQUISITION, accounted for approximately 17% and 10% of accounts receivable, respectively. As of December 31, 2006, one customer, Headquarters Cryptologic Systems Group (HQ CPSG), represented 54% of accounts receivable.

Income Taxes

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

Property and Equipment

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

	September 30,			December 31,
	2007			2006
Automobiles, computers, equipment and software	$	453,655		$	301,840
Less- Accumulated depreciation and amortization		(185,927	)	$	(96,609	)
	$	267,728		$	205,231

Depreciation expense is computed using the straight-line method over the estimated useful lives of between two and five years depending upon the classification of the property and/or equipment.

In accordance with the American Institute of Certified Public Accountants Statement of Position 98-1 “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use,” the Company capitalizes costs related to software and implementation in connection with its internal use software systems.

Software Development Costs

WidePoint accounts for software development costs related to software products for sale, lease or otherwise marketed in accordance with SFAS No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed.” For projects fully funded by the Company, significant development costs are capitalized from the point of demonstrated technological feasibility until the point in time that the product is available for general release to customers. Once the product is available for general release, capitalized costs are amortized based on units sold, or on a straight-line basis over a six-year period or other such shorter period as may be required. WidePoint recorded approximately $14,000 of amortization expense for PKI-I and $31,000 for PKI-II for the three month period ended September 30, 2007. WidePoint recorded approximately $183,000 of amortization expense for PKI-I and PKI-II for the year ended December 31, 2006. Capitalized software costs included in Other Intangibles at September 30, 2007 and December 31, 2006 were approximately $0.7 million and $0.7 million, respectively. The Company also initiated PKI-III to attain an Authority to Operate (“ATO”) under the guidelines associated with our ACES certificates. WidePoint recorded no accumulated costs for the three month period ended September 30, 2007, and approximately $64,000 in the nine month period ended September 30, 2007. We estimate that we will record another approximately $45,000 prior to issuance of the ATO during the first quarter of 2008 at which time we will commence amortizing the ATO over an approximate three year life.

7

Goodwill, Other Intangible Assets, and Long-Lived Assets

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

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

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

Basic and Diluted Net Earnings (Loss) Per Share

Basic earnings or loss per share includes no dilution and is computed by dividing net earnings or loss by the weighted-average number of common shares outstanding for the period. Diluted earnings or loss per share includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The treasury stock effect of the conversion of options and warrants to purchase 4,911,366 shares of common stock outstanding for the three months ended September 30, 2007, has been included in the calculation of the diluted net income per share. This excludes 183,000 options which option exercise price exceeds the average price per share during the period. The inclusion of the conversion of preferred stock, outstanding options and warrants to purchase 5,726,519 and 13,987,482 shares, respectively, for the nine months ended September 30, 2007 and 2006 has not been included in the calculation of the net loss per share as such effect would have been anti-dilutive. The inclusion of the conversion of preferred stock, outstanding options and warrants to purchase 10,696,100 shares for the three month period ending September 30, 2006 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 net loss per share for the three month period ending September 30, 2006 and the nine month periods ended September 30, 2007 and 2006, respectively, are presented as identical.

Stock-based compensation

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

8

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

The amount of compensation expense recognized under SFAS 123(R) during the three and nine month periods ended September 30, 2007 and 2006, respectively, under our plans was comprised of the following:

	Three Months ended September 30				Nine Months ended September 30
	2007		2006		2007		2006
General and administrative expense	$	31,090	$	112,236	$	117,753	$	265,628
Share-based compensation before taxes		31,090		112,236		117,753		265,628
Share-based compensation expense	$	31,090	$	112,236	$	117,753	$	265,628
Net share-based compensation expenses per basic
and diluted common share	$	0.00	$	0.00	$	0.00	$	0.01

Since we have cumulative operating losses as of September 30, 2007 for which a valuation allowance has been established, we recorded no income tax benefits for share-based compensation arrangements.  Additionally, no incremental tax benefits were recognized from stock options exercised during the quarter ended September 30, 2007, which would have resulted in a reclassification to reduce net cash provided by operating activities with an offsetting increase in net cash provided by financing activities.  

The fair value of each option award is estimated on the date of grant using a Black-Scholes option pricing model (“Black-Scholes model”) that uses the assumptions of no dividend yield, risk free interest rates of between 2.70% and 4.83%, volatility of between 156% to 57%, and expected life in years of approximately 4 years. Expected volatilities are based on the historical volatility of our common stock. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant.  Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.  The estimated forfeiture rates are based on analyses of historical data, taking into account patterns of involuntary termination and other factors.  A summary of the option activity under our plans during the three and nine month period ended September 30, 2007 and September 30, 2006 is presented below:

9

	# of Shares	Weighted average Grant date fair value per share
OUTSTANDING AND NON -VESTED
Non-vested at January 1, 2007	753,477	$0.67
Granted	--	--
Vested	323,183	$0.58
Forfeited	29,250	$0.43
Non-vested at March 31, 2007	401,044	$0.76
Granted	--	--
Vested	--	--
Non-vested at June 30, 2007	401,044	$0.76
Granted	124,000	$0.58
Vested	68,000	$0.63
Non-vested at September 30, 2007	457,044	$0.73
OUTSTANDING AND EXERCISABLE
Total outstanding at January 1, 2007	7,103,261	$0.36
Issued	--	--
Cancelled	30,250	$0.48
Exercised	75,800	$0.34
Total outstanding at March 31, 2007	6,997,211	$0.36
Total exercisable at March 31, 2007	6,596,167	$0.32
Issued	--	--
Cancelled	--	--
Exercised	36,000	$0.24
Total outstanding at June 30, 2007	6,961,211	$0.36
Total exercisable at June 30, 2007	6,560,167	$0.32
Issued	124,000	$0.58
Cancelled	--	--
Exercised	--	--
Total outstanding at September 30, 2007	7,085,211	$0.37
Total exercisable at September 30, 2007	6,628,167	$0.32

The aggregate remaining contractual lives in years for the options outstanding and exercisable on September 30, 2007 were 3.64 and 3.32, respectively.

Aggregate intrinsic value represents total pretax intrinsic value (the difference between WidePoint’s closing stock price on September 30, 2007 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2007. This amount changes based on the fair market value of WidePoint’s stock. The total intrinsic value of options outstanding as of September 30, 2007 was $3,309,160. The total intrinsic value of options exercisable on September 30, 2007 was $3,290,995. The total intrinsic value of options exercised for the third quarter of fiscal 2007 was $0. The Company issues new shares of common stock upon the exercise of stock options.

At September 30, 2007, 4,884,738 shares were available for future grants under the Company’s 1997 Stock Compensation Plans. This includes options for 1,012,150 shares previously issued and cancelled under the Company’s 1997 Stock Compensation Plans. This does not include 3,999,999 warrants granted and vested to members of the senior management team that were not issued under the Company’s 1997 Stock Compensation Plans.

At September 30, 2007, the Company had approximately $318,000 of total unamortized compensation expense, net of estimated forfeitures, related to stock option plans that will be recognized over the weighted average period of 3.64 years.

10

Recent Accounting Pronouncements

In June 2006, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue No. 06-03 (“EITF 06-03”), “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).” EITF 06-03 provides that the presentation of taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer on either a gross basis (included in revenues and costs) or on a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. The provisions of EITF 06-03 became effective as of December 31, 2006. Our adoption of ETIF 06-03 has not and is not expected to have a material effect on our consolidated financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157), which provides guidance on how to measure assets and liabilities that use fair value. SFAS 157 will apply whenever another US GAAP standard requires (or permits) assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This standard also will require additional disclosures in both annual and quarterly reports. SFAS 157 will be effective for fiscal 2009. We are currently evaluating the potential impact this standard may have on its financial position and results of operations.

On February 15, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). Under this Standard, we may elect to report financial instruments and certain other items at fair value on a contract-by-contract basis with changes in value reported in earnings. This election is irrevocable. SFAS No. 159 provides an opportunity to mitigate volatility in reported earnings that is caused by measuring hedged assets and liabilities that were previously required to use a different accounting method than the related hedging contracts when the complex provisions of SFAS No. 133 hedge accounting are not met. SFAS No. 159 is effective for years beginning after November 15, 2007. Early adoption within 120 days of the beginning of the company’s 2008 fiscal year is permissible, provided the company has not yet issued interim financial statement for 2008 and has adopted SFAS No. 157. Management is currently evaluating the potential impact of adopting this Standard.

3. Debt

The Company entered into a senior lending agreement with Cardinal Bank on August 16, 2007. The senior lending agreement has a maturity date of September 1, 2008. The Agreement provides for a $2 million revolving credit facility. Borrowings under the Agreement are collateralized by the Company’s eligible contract receivables, inventory, all of its stock in certain of its subsidiaries and certain property and equipment, and bear interest at the prime rate minus .25%. The credit facility contains specific financial covenants related to working capital levels and consolidated net worth.

4. Goodwill and Intangible Assets

Effective January 1, 2002, WidePoint adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 142 requires, among other things, the discontinuance of goodwill amortization. Under SFAS 142, goodwill is to be reviewed at least annually for impairment; the Company has elected to perform this review annually on December 31^st of each calendar year. These reviews have resulted in no adjustments in goodwill.

During 2004, WidePoint completed the acquisition of Operational Research Consultants, Inc. (“ORC”). The Company has also capitalized software development costs associated with its PKI initiative, established the purchase price allocation of the assets acquired and allocated the purchase price of the components and software capitalization of goodwill and other intangibles as follows:

11

Amortized Intangible Assets		As of September 30, 2007
		Gross Carrying Amount	Accumulated Amortization
(1)	ORC Intangible (Includes customer
	relationships and PKI business
	opportunity purchase accounting
	preliminary valuations)	$  1,145,523	$  (644,811)
(2)	PKI-I Intangible (Related to
	internally generated software)	$     334,672	$  (169,761)
(3)	PKI-II Intangible (Related to
	internally generated software)	$     649,991	$  (260,724)
(4)	PKI-III Intangible (Related to
	internally generated software)	$       63,809	--
	Total	$  2,193,995	$(1,075,296)
	Aggregate Amortization Expense:
	For quarter ended 9/30/07	$     101,107
	Estimated Amortization Expense:
	For year ended 12/31/07	$     415,763
	For year ended 12/31/08	$     438,430
	For year ended 12/31/09	$     408,272
	For year ended 12/31/10	$     197,747

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

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

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

12

(4) The PKI-III intangible is related to an additional PKI software development by ORC to attain an Authority To Operate (“ATO”) under the guidelines associated with ACES certificates that will be issued under a General Service Administration (“GSA”) credential program. It is estimated that we will accumulate approximately $110,000 in cost through the 1^st quarter of 2008 prior to the issuance by the GSA of an ATO to ORC allowing them to issue ACES certificates for a 3 year period. Upon issuance of the ATO, ORC will amortize the accumulated costs over a weighted average life of 3 years to operate under the new ATO to issue ACES Certificates.

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

There were no amounts of research and development assets acquired during the quarter ended September 30, 2007 nor any written-off in the period.

There were no changes in the carrying amount of goodwill for the quarter ended September 30, 2007.

The goodwill acquired is associated with the acquisition of ORC in October of 2004. No impairment was required as of September 30, 2007.

5. Income Taxes

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

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

As of September 30, 2007, the Company had net operating loss carry forwards of approximately $21 million to offset future taxable income. These carry forwards expire between 2010 and 2026. Under the provisions of the Tax Reform Act of 1986, when there has been a change in an entity’s ownership of 50 percent or greater, utilization of net operating loss carry forwards may be limited. As a result of WidePoint’s equity transactions, the Company’s net operating losses will be subject to such limitations and may not be available to offset future income for tax purposes. Upon review and analysis by the Company, we have concluded that no FIN 48 effects are present as of September 30, 2007 and our tax position has not materially changed since December 31, 2006.

6. Stockholders’ Equity

The Company is authorized to issue 110,000,000 shares of common stock, $.001 par value per share. During the quarter ended September 30, 2007, no shares of common stock were issued as the result of the exercise of employee stock options. As of September 30, 2007, there were 52,558,699 shares of common stock outstanding.

Preferred Stock

Our certificate of incorporation authorizes the Company to issue up to 10,000,000 shares of preferred stock, $0.001 par value per share, of which no shares and 195,214 shares were outstanding at September 30, 2007 and December 31, 2006, respectively. Preferred stock of 195,214 shares was converted during the quarter ended March 31, 2007 into 1,952,140 shares of Common Stock.

13

Common Stock

On October 25, 2004, WidePoint completed the acquisition of Operational Research Consultants, Inc., or ORC, a privately held IT and engineering firm providing mission-critical sensitive and strategic information security solutions to the United States Government. Pursuant to the terms of a Purchase Agreement entered into on October 25, 2004, between the Company and the ORC shareholders, the Company issued 5,555,556 common shares of the Company’s stock and placed it into an escrow to be released to the ORC shareholders in the event they attained certain performance parameters in 2004 and 2005. As of December 31, 2005, no common shares were earned and the 5,555,556 shares were returned to the Company and cancelled during the second quarter of 2006.

On April 30, 2004, the Company closed upon the acquisition of all the issued and outstanding shares of Chesapeake Government Technologies, Inc. (“Chesapeake”), pursuant to the terms of an Agreement and Plan of Merger, dated as of March 24, 2004. This transaction was accounted for as a consulting arrangement because Chesapeake did not meet the definition of a business under FAS 141. WidePoint issued 4,082,980 shares of its common stock to stockholders of Chesapeake in consideration for all of the issued and outstanding shares of Chesapeake owned by them. In conjunction with this closing, the Chesapeake stockholders also entered into an escrow agreement and deposited 3,266,384 shares of the 4,082,980 newly issued shares of WidePoint common stock into escrow. The 3,266,384 shares of common stock placed into escrow were not recorded in equity at the time of the acquisition and were only to be released to the Chesapeake shareholders in the event of the satisfaction of certain conditions set forth in the merger agreement, which provided that during the period commencing after the closing of the merger and ending on December 31, 2005, the 3,266,384 shares of common stock would be released to the Chesapeake shareholders in a ratio based on the amount of revenues actually received by the Company from the business acquired as a result of activities originated and consummated by Chesapeake. The December 31, 2005 escrow expiration date could have been extended for one additional year in the event that it was determined that Chesapeake had achieved certain performance levels in the latter part of 2005, which did not occur. All shares earned were charged to expense through December 31, 2006. Of the 3,266,384 shares of common stock held in escrow, 816,596 and 1,905,390 were released in 2005 and 2006, respectively, with the 544,398 remaining shares cancelled in 2006.

Stock Warrants

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

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

7. Segment reporting

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

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

14

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

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

	Three Months Ended September 30
	2007			2006
Consulting services:
Revenues	$	2,690,653		$	2,963,423
Operating income		138,932			213,219
Total assets		4,213,943			2,498,462
PKI Credentialing and Managed Services
Revenues	$	1,314,810		$	244,838
Operating income (loss) (includes amortization expense of $45,838
and $45,838, respectively)		293,882			(31,155	)
Total assets		1,409,408			1,164,745
Total Company
Revenues	$	4,005,463		$	3,208,261
Operating income (loss)		181,616	(1)		(213,710	)(2)
Depreciation expense		22,599			7,202
Interest income (expense), net		19,240			28,549
Income tax benefit		--			--
Net income (loss)	$	178,257		$	(192,363	)
Total Corporate assets	$	5,264,415		$	5,802,968
Total assets	$	10,887,766		$	9,466,175

(1)   Includes $55,269 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $195,929 in unallocated corporate costs in general and administrative expense.

(2)   Includes $55,270 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $340,504 in unallocated corporate costs in general and administrative expense.

15

	Nine Months Ended September 30
	2007			2006
Consulting services:
Revenues	$	7,336,466		$	10,064,850
Operating income		120,226			421,834
Total assets		4,213,943			2,498,462
PKI Credentialing and Managed Services
Revenues	$	2,810,476		$	669,177
Operating income (loss) (includes amortization expense of $137,514
and $137,514, respectively)		563,717			(168,763	)
Total assets		1,409,408			1,164,745
Total Company
Revenues	$	10,146,942		$	10,734,027
Operating loss		214,208	(1)		724,643	(2)
Depreciation expense		59,773			20,927
Interest income, net		75,366			65,343
Income tax benefit		--			83
Net loss	$	198,615		$	680,144
Total Corporate assets	$	5,264,415		$	5,802,968
Total assets	$	10,887,766		$	9,466,175

(1)   Includes $165,808 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $732,343 in unallocated corporate costs in general and administrative expense.

(2)   Includes $165,809 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $811,905 in unallocated corporate costs in general and administrative expense.

8. Litigation

The Company is not involved in any material legal proceedings.

9. Subsequent Events

On November 5, 2007 the Company entered into several agreements with Protexx, Inc. allowing for a short-term borrowing facility of up to $100,000 between November 5, 2007 and January 2, 2008. The borrowing facility is fully collateralized against all of the assets of Protexx, Inc. As of November 5, 2007 Protexx had drawn down $30,000 against the credit facility.

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the notes thereto which appear elsewhere in this quarterly report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

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

Overview

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

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

With the addition of the customer base and the increase in revenues attributable from the ORC acquisition, WidePoint’s opportunity to leverage and expand further into the federal marketplace has improved dramatically. ORC’s past client successes, top security clearances in their facilities and with their personnel, and additional breadth of management talent have expanded the Company’s reach into markets that previously were not accessible to WidePoint. WidePoint intends to continue to leverage the synergies between the newly acquired operating subsidiaries and cross sell those technical capabilities into each separate marketplace serviced by its respective subsidiaries. Further, WidePoint is continuing to actively search out new synergistic acquisitions that we believe will further enhance the present base of business, which has already been augmented by our recent acquisitions activity and internal growth initiatives.

17

WidePoint’s total revenues increased by approximately $0.8 million from $3.2 million for the three months ended September 30, 2006 to $4.0 million for the three months ended September 30, 2007. WidePoint’s total revenues decreased by approximately $0.6 million from $10.7 million for the nine months ended September 30, 2006 to $10.1 million for the nine months ended September 30, 2007. The increase in revenues during the three month period ending September 30, 2007 as compared to the same three month period ending September 30, 2006 was primarily a result of increased growth in our PKI managed services segment, partially offset by a reduction in our consulting services segment. The reduction in revenues during the nine month period ending September 30, 2007 as compared to the same nine month period ending September 30, 2006 was a result of the non-recurrence of a one time software resale of approximately $1.5 million that occurred during the 2^nd quarter of 2006, along with a reduction in consulting services driven by difficulties in sourcing appropriately skilled candidates for open positions within our consulting services segment, all partially offset by increased growth within our PKI managed services segment.

For the three months ended September 30, 2007, our PKI credentialing and managed services segment experienced revenue growth of approximately 536% with revenues increasing approximately $1,070,000 from approximately $245,000 for the quarter ended September 30, 2006, to approximately $1,315,000 for the quarter ended September 30, 2007. Our PKI credentialing and managed services segment experienced revenue growth of approximately 420% with revenues increasing approximately $2,141,000 from approximately $669,000 for the nine months ended September 30, 2006, to approximately $2,810,000 for the nine months ended September 30, 2007, as a result of continuing adoption of the Federal Government’s various mandates to roll out credential programs to various agencies and contractors. We anticipate that credential sales and managed services sales should continue to increase in the medium to long-term time horizons as we continue to fulfill contract wins and we witness the adoption of the External Certificate Authority (“ECA”) program by the Department of Defense, the HSPD-12 program is increasingly adopted by the Federal Government agencies and departments, and other groups commence the pilot programs and rollout associated with the expansion of various programs which are being mandated by the Federal Government. During the short-term time horizon we believe that sales associated with our PKI managed services segment could be erratic as they may be driven by delivery timeframes controlled by external Company partners and clients which may be outside of the control of the Company.

Our consulting services segment experienced decreasing revenues of approximately $273,000 from approximately $2,963,000 for the quarter ended September 30, 2006 as compared to approximately $2,691,000 for the quarter ended September 30, 2007. Our consulting services segment experienced decreasing revenues of approximately $2,728,000 from approximately $10,065,000 for the nine months ended September 30, 2006 as compared to approximately $7,336,000 for the nine months ended September 30, 2007. The decrease in revenues for the quarter ended September 30, 2007 as compared to the quarter ended September 30, 2006 was materially the result of difficulties in sourcing appropriately skilled candidates for open positions. The decrease in revenues for the nine months ended September 30, 2007 as compared to the nine months ended September 30, 2006 was materially the result of the non-recurrence and replacement associated with the resale of software in support of the Department of Defense’s (“DOD”) preparation for their widescale launch of the ECA program during the third quarter of 2006 along with a reduction in consulting services driven by difficulties in sourcing appropriately skilled candidates for open positions.

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

18

A number of factors, including the progress of contracts, revenues earned on contracts, the number of billable days in a quarter, the timing of the pass-through of other direct costs, the commencement and completion of contracts during any particular quarter, the schedule of the government agencies for awarding contracts, the term of each contract that we have been awarded and general economic conditions may subject our revenues and operating results to significant variation from quarter to quarter. Because a significant portion of our expenses, such as personnel and facilities costs, are fixed in the short term, successful contract performance and variation in the volume of activity as well as in the number of contracts commenced or completed during any quarter may cause significant variations in operating results from quarter to quarter.

With our acquisition of ORC we rely upon a larger portion of our revenues from the Federal Government directly or as a subcontractor. The Federal Government’s fiscal year ends September 30. If a budget for the next fiscal year has not been approved by that date, our clients may have to suspend engagements that we are working on until a budget has been approved. Such suspensions may cause us to realize lower revenues in the fourth quarter and/or first quarter of the year. Further, a change in presidential administrations and in senior government officials may negatively affect the rate at which the Federal Government purchases the services that we offer.

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

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

Results of Operations

Three Months Ended September 30, 2007 as Compared to Three Months Ended September 30, 2006

Revenues, net. Revenues for the three month period ended September 30, 2007 were approximately $4,005,000 as compared to approximately $3,208,000 for the three month period ended September 30, 2006. The increase in revenues was primarily attributable to increases in our PKI managed services segment partially offset by declines within our consulting services segment. We have experienced difficulties recently in sourcing appropriately skilled candidates for open positions within our consulting services segment for which we have just recently seen an improvement. Our PKI credentialing and managed services segment experienced revenue growth of approximately 536% with revenues increasing approximately $1,070,000 from $245,000 for the three month period ended September 30, 2006, to $1,315,000 for the three month period ended September 30, 2007, as a result of various mandates to roll out credential programs to various agencies and contractors. Our consulting services segment experienced decreasing revenue of approximately 10% with revenues decreasing approximately $272,000 from $2,963,000 for the three month period ended September 30, 2006 as compared to $2,691,000 for the three month period ended September 30, 2007, as a result of difficulties associated with sourcing candidates for open positions which led to decreases in providing contracting services.

Cost of sales. Cost of sales for the three month period ended September 30, 2007, was approximately $2,874,000, or 72% of revenues, an increase of approximately $546,000 from cost of sales of approximately $2,328,000, or 73% of revenues, for the three month period ended September 30, 2006. The absolute increase in cost of sales was primarily attributable to an increase in revenues with the improvement in the percentage of cost of sales primarily attributable to greater profit margins associated with the Company’s PKI managed services segment.

Gross profit. As a result of the higher sales mix for PKI, gross profit for the three month period ended September 30, 2007, was approximately $1,132,000, or 28% of revenues, an increase of approximately $252,000 over gross profit of approximately $880,000, or 27% of revenues, for the three month period ended September 30, 2006.

19

Sales and marketing. Sales and marketing expense for the three month period ended September 30, 2007, was approximately $239,000, or 6% of revenues, a decrease of approximately $10,000, as compared to approximately $249,000, or 8% of revenues, for the three month period ended September 30, 2006. The slight decrease was materially attributable to slightly lesser costs in our bid and proposal expenses.

General and administrative. General and administrative expenses for the three month period ended September 30, 2007, were approximately $711,000, or 18% of revenues, a decrease of approximately $134,000, as compared to approximately $845,000, or 26% of revenues, recorded by the Company for the three month period ended September 30, 2006. The decrease in general and administrative expenses for the three months ended September 30, 2007, was primarily attributable to a decrease in legal expenses and by a decrease in our costs associated with our stock compensation expense for FAS 123R.

Depreciation. Depreciation expense for the three month period ended September 30, 2007, was approximately $22,600, or less than 1% of revenues, an increase of approximately $15,400, as compared to approximately $7,200 of such expenses, or less than 1% of revenues, recorded by the Company for the three month period ended September 30, 2006. The increase in depreciation expense for the three month period ended September 30, 2007, was primarily attributable to greater amounts of depreciable assets.

Interest income. Interest income for the three month period ended September 30, 2007, was $21,944, or less than 1% of revenues, a decrease of $7,178 as compared to $29,122, or less than 1% of revenues, for the three month period ended September 30, 2006. The decrease in interest income for the three month period ended September 30, 2006, was primarily attributable to lesser amounts of invested cash and cash equivalents partially offset by higher short-term interest rates that were available to the Company on investments in money market accounts.

Interest expense. Interest expense for the three month period ended September 30, 2007, was $2,704, or less than 1% of revenues, an increase of $2,131, as compared to $573, or less than 1% of revenues, for the three month period ended September 30, 2006. The increase in interest expense for the three month period ended September 30, 2007 was primarily attributable to greater expenses associated with the increase in capital leases held by the Company.

Net income (loss). As a result of the above, the net income for the three month period ended September 30, 2007, was approximately $178,000 as compared to the net loss of approximately $192,000 for the three months ended September 30, 2006.

Nine Months Ended September 30, 2007 as Compared to Nine Months Ended September 30, 2006

Revenues, net. Revenues for the nine month period ended September 30, 2007 were approximately $10,147,000 as compared to approximately $10,734,000 for the nine month period ended September 30, 2006. The decrease in revenues was primarily attributable to the non-recurrence of a one time software resale of approximately $1.5 million that occurred during the 2^nd quarter of 2006, along with a reduction in consulting services driven by difficulties in sourcing appropriately skilled candidates for open positions within our consulting services segment. Our PKI credentialing and managed services segment experienced revenue growth of approximately 420% with revenues increasing approximately $2,141,000 from $669,000 for the nine month period ended September 30, 2006 to $2,810,000 for the nine month period ended September 30, 2007, as a result of various mandates to roll out credential programs to various agencies and contractors. Our consulting services segment experienced decreasing revenue of approximately $2,728,000 from $10,065,000 for the nine month period ended September 30, 2006, as compared to $7,336,000 for the nine month period ended September 30, 2007, as a result of difficulties associated with sourcing candidates for open positions which led to decreases in providing contracting services and the non-recurrence of software reselling in support of the DOD’s widescale launch of its ECA program.

20

        Cost of sales. Cost of sales for the nine month period ended September 30, 2007, was approximately $7,262,000, or 72% of revenues, a decrease of approximately $1,061,000 from cost of sales of approximately $8,323,000, or 78% of revenues, for the nine month period ended September 30, 2006. The decrease in cost of sales was materially attributable to greater margins generated from the Company’s PKI managed services segment.

        Gross profit. As a result of the higher sales mix in PKI, gross profit for the nine month period ended September 30, 2007, was approximately $2,885,000, or 28% of revenues, an increase of approximately $474,000 over gross profit of approximately $2,411,000, or 22% of revenues, for the nine month period ended September 30, 2006.

        Sales and marketing. Sales and marketing expense for the nine month period ended September 30, 2007, was approximately $686,000, or 7% of revenues, an increase of approximately $24,000, as compared to approximately $662,000, or 6% of revenues, for the nine month period ended September 30, 2006. The increase was materially attributable to our expansion of our sales efforts.

        General and administrative. General and administrative expenses for the nine month period ended September 30, 2007, were approximately $2,413,000, or 24% of revenues, a decrease of approximately $61,000, as compared to approximately $2,474,000, or 23% of revenues, recorded by the Company for the nine month period ended September 30, 2006. The decrease in general and administrative expenses for the nine months ended September 30, 2007, was primarily attributable to a decrease in legal expenses and lesser stock compensation expense associated with FAS 123R.

         Depreciation expense. Depreciation expense for the nine month period ended September 30, 2007, was approximately $60,000, or less than 1% of revenues, an increase of $39,000, as compared to approximately $21,000 of such expenses, or less than 1% of revenues, recorded by the Company for the nine month period ended September 30, 2006. The increase in depreciation expenses for the nine month period ended September 30, 2007, was primarily attributable to the increased pool of depreciable assets.

        Interest income. Interest income for the nine month period ended September 30, 2007, was $83,942, or less than 1% of revenues, an increase of $16,055, as compared to $67,887, or less than 1% of revenues, for the nine month period ended September 30, 2006. The increase in interest income for the nine month period ended September 30, 2007, was primarily attributable to greater amounts of cash and cash equivalents available to the company over this time period.

        Interest expense. Interest expense for the nine month period ended September 30, 2007, was $8,576, or less than 1% of revenues, an increase of $6,032 as compared to $2,544, or less than 1% of revenues, for the nine month period ended September 30, 2006. The increase in interest expense for the nine month period ended September 30, 2007 was primarily attributable to increased interest expenses associated with greater costs associated with an increase in capital leases by the Company.

        Net loss. As a result of the above, the net loss for the nine month period ended September 30, 2007, was approximately $199,000 as compared to the net loss of approximately $680,000 for the nine months ended September 30, 2006.

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

21

	Three Months Ended September 30
	2007			2006
Consulting services:
Revenues	$	2,690,653		$	2,963,423
Operating income		138,932			213,219
Total assets		4,213,943			2,498,462
PKI Credentialing and Managed Services
Revenues	$	1,314,810		$	244,838
Operating income (loss) (includes amortization expense of $45,838
and $45,838, respectively)		293,882			(31,155	)
Total assets		1,409,408			1,164,745
Total Company
Revenues	$	4,005,463		$	3,208,261
Operating income (loss)		181,616	(1)		(213,710	)(2)
Depreciation expense		22,599			7,202
Interest income (expense), net		19,240			28,549
Income tax benefit		--			--
Net income (loss)	$	178,257		$	(192,363	)
Total Corporate assets	$	5,264,415		$	5,802,968
Total assets	$	10,887,766		$	9,466,175

(1)   Includes $55,269 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $195,929 in unallocated corporate costs in general and administrative expense.

(2)   Includes $55,270 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $340,504 in unallocated corporate costs in general and administrative expense.

	Nine Months Ended September 30
	2007			2006
Consulting services:
Revenues	$	7,336,466		$	10,064,850
Operating income		120,226			421,834
Total assets		4,213,943			2,498,462
PKI Credentialing and Managed Services
Revenues	$	2,810,476		$	669,177
Operating income (loss) (includes amortization expense of $137,514
and $137,514, respectively)		563,717			(168,763	)
Total assets		1,409,408			1,164,745
Total Company
Revenues	$	10,146,942		$	10,734,027
Operating loss		214,208	(1)		724,643	(2)
Depreciation expense		59,773			20,927
Interest income, net		75,366			65,343
Income tax benefit		--			83
Net loss	$	198,615		$	680,144
Total Corporate assets	$	5,264,415		$	5,802,968
Total assets	$	10,887,766		$	9,466,175

22

(1)   Includes $165,808 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $732,343 in unallocated corporate costs in general and administrative expense.

(2)   Includes $165,809 in amortization expense in cost of sales associated with the purchase of ORC, which is not allocated among the segments and includes $811,905 in unallocated corporate costs in general and administrative expense.

Liquidity and Capital Resources

The Company has, since inception, financed its operations and capital expenditures through the sale of preferred and common stock, seller notes, convertible notes, convertible exchangeable debentures, senior secured loans and the proceeds from the exercise of the warrants related to a convertible exchangeable debenture. During 2006 and through the period ended September 30, 2007, operations were materially financed with working capital, and the proceeds from a convertible preferred stock issuance which occurred in October 2004. During the third quarter of 2007 the Company entered into a senior lending facility with Cardinal Bank for up to $2,000,000 through September 1, 2008 at a rate of prime less 25 basis points. The senior lending facility at this time has not been drawn against. Further, on November 5, 2007 the company entered into a series of agreements with Protexx, Inc. that allows for Protexx, Inc. with approval by WidePoint to borrow up to $100,000 on an installment basis between November 5, 2007, and January 2, 2008. The short-term borrowing facility is fully collateralized against all of the assets of Protexx, Inc. As of November 5, 2007 Protexx, Inc. had drawn down $30,000 against the credit facility.

Net cash used in operating activities for the quarter ended September 30, 2007, was approximately $413,000, as compared to cash provided by operating activities of approximately $188,000 for the quarter ended September 30, 2006. The decrease in cash generated from operating activities for the quarter ended September 30, 2007, was primarily a result of increases in accounts receivable and other assets, partially offset by decreases in accounts payable. Net cash used in investing activities for the quarter ended September 30, 2007, was approximately $7,000, as compared to $21,000 used in investing activities in the quarter ended September 30, 2006. The increase in net cash used in investing activities resulted from increased expenditures in property and equipment. Capital expenditures for property and equipment were approximately $7,000 for the quarter ended September 30, 2007, as compared to approximately $21,000 for the quarter ended September 30, 2006. Net cash used in financing activities amounted to approximately $13,000 in the quarter ended September 30, 2007, as compared to approximately $156,000 of net cash provided by financing activities in the quarter ended September 30, 2006. The change primarily resulted from a decrease in costs related to our registration statement on Form S-1 and a warrant exercise, partially offset by a decrease in proceeds related to the exercise of stock options and an increase in principal payments made under our capital lease obligations during the quarter ended September 30, 2007.

As of September 30, 2007, the Company had a net working capital of approximately $3.7 million. WidePoint’s primary source of liquidity consists of approximately $2.9 million in cash and cash equivalents and approximately $3.7 million of accounts receivable. Current liabilities include approximately $2.9 million in accounts payable and accrued expenses.

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

Since 2002, WidePoint has embarked upon several new initiatives to counter the current negative business environment within our industry and expand our capacity to restore revenue growth. The Company requires substantial working capital to fund the future growth of its business, particularly to finance accounts receivable, sales and marketing efforts, and capital expenditures.

There is currently approximately $108,000 in commitments for capital expenditures and software development costs. 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.

23

On October 25 and 29, 2004, WidePoint completed financings with Barron Partners LP (“Barron”), a private equity fund that engages in investing primarily in private investments in publicly traded entities, for an aggregate amount of $3,580,000, under a preferred stock purchase agreement and related agreements. Net proceeds from the financing after costs and expenses, including fees of finders and agents, were approximately $3,030,000. WidePoint issued an aggregate of 2,045,714 shares of its Series A Convertible Preferred Stock that were convertible into an aggregate of 20,457,143 shares of its Common Stock at a conversion rate equal to $0.175 per share. In addition, WidePoint issued to Barron a warrant to purchase up to an additional 10,228,571 shares of its Common Stock at an exercise price of $0.40 per common share. As of September 30, 2007, all of the Barron Series A Convertible Preferred Stock had been converted into common stock and its warrant had been fully exercised. Barron’s conversion of its Series A Convertible Preferred Stock and its warrant exercises were subject to contractual restrictions which restrict the ability of Barron and its affiliates to acquire shares of Common Stock which equal no more than 4.99% of the outstanding shares of WidePoint’s Common Stock at any time. This contractual restriction could have been removed upon 61 days notice to WidePoint from Barron, but in the event Barron elects to remove this restriction, then Barron and its affiliates agreed that Barron and its affiliates could only vote the shares of Common Stock held by Barron and its affiliates which result in Barron and its affiliates having no more than 22% of the total voting power of all outstanding shares of WidePoint’s Common Stock at any time. As a result of the Barron financing transaction, WidePoint issued warrants to Westcap Securities, Inc., a registered broker-dealer (“Westcap”) and WidePoint’s placement agent in such transaction, to purchase 511,428 shares of Common Stock at an exercise price of $0.40 per share. As of September 30, 2007 all of the Westcap warrants had been exercised.

Pursuant to the registration rights agreement between Barron and WidePoint related to the stock issuances described in the preceding paragraph, WidePoint filed a registration statement on January 5, 2005, covering the resale of the shares of Common Stock issuable upon conversion and/or exercise of the Series A Convertible Preferred Stock and the warrants issued to Barron. Under the agreement, if the registration statement was not declared effective by April 23, 2005 and thereafter kept effective through October 20, 2007, subject to permissible blackout periods and registration maintenance periods, then WidePoint would be required to pay Barron a maximum penalty of up to $20,000 for each month the registration statement was not effective. Barron waived this penalty provision through February 9, 2006, when the registration statement was declared effective by the SEC.

WidePoint believes that its current cash position is sufficient to meet capital expenditure and working capital requirements for the near term. However, the growth and technological change of the market make it difficult to predict future liquidity requirements with certainty. Over the longer term, the Company must successfully execute its plans to increase revenue and income streams that will generate significant positive cash flows if it is to sustain adequate liquidity without impairing growth or requiring the infusion of additional funds from external sources. Additionally, a major expansion, such as occurred with the acquisition of ORC or any other potential new subsidiaries, might require external financing that could include additional debt or equity capital. The Company raised approximately $3.6 million dollars in connection with the aforementioned equity investments by Barron Partners LP, that were used in the acquisition of ORC. Further, the Company raised approximately $4.1 million dollars in connection with the attached warrants associated with the aforementioned equity investments by Barron Partners LP during the year ended 2005. There can be no assurance that additional financing, if required, will be available on acceptable terms, if at all, for future acquisitions and/or growth initiatives.

Off-Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not exposed to market risks related to changes in interest rates and changes in the market value of our investments as we have no borrowings outstanding under our bank credit agreement as of September 30, 2007, and we only invest our excess cash in marketable securities in a money market account which due to the short maturity and our availability to withdraw those securities at any time does not present any material market exposure.

24

ITEM 4. CONTROLS AND PROCEDURES

Conclusions regarding disclosure controls and procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by it in its periodic reports filed with the Securities and Exchange Commission is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report, concluded that, based on the evaluation of these controls and procedures required by paragraph (b) of Securities Exchange Act Rule 13a-15, our disclosure controls and procedures were effective.

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

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

Changes in internal control over financial reporting

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

PART II.

OTHER INFORMATION

ITEM 1A. RISK FACTORS

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

25

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

We have a total of 110,000,000 authorized shares of common stock, of which 52,558,699 shares were issued and outstanding as of September 30, 2007. In addition, we had warrants and options outstanding as of that date with respect to which 7,176,257 shares of common stock were reserved for issuance. Our board of directors has the authority, without action or vote of our stockholders in most cases, to issue all or a part of any authorized but unissued shares of our common stock. Such stock issuances may be made at a price that reflects a discount from the then-current trading price of our common stock. In addition, in order to raise capital for acquisitions or other general corporate purposes that we may need at today’s stock prices, we would likely need to issue securities that are convertible into or exercisable for a significant number of shares of our common stock. These issuances would dilute our stockholders percentage ownership interest, which would have the effect of reducing our stockholders’ influence on matters on which our stockholders vote, and might dilute the book value of our common stock. You may incur additional dilution of net tangible book value if holders of stock options or warrants, whether currently outstanding or subsequently granted, exercise their options or warrants to purchase shares of our common stock.

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

As of September 30, 2007, we had reserved 7,176,257 shares of common stock for issuance upon exercise of stock options and warrants. As of September 30, 2007, holders of warrants and options to purchase an aggregate of 6,719,213 shares of our common stock may exercise those securities and transfer the underlying common stock at any time subject, in some cases, to Rule 144 of the Securities Act of 1933. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that these sales could occur. These sales might also make it more difficult for us to issue equity securities in the future at a price that we think is appropriate, or at all.

ITEM 6. EXHIBITS.

(a) Exhibits

10.1 Promissory Note, dated November 5, 2007, between Protexx, Inc. and its subsidiaries, including but not limited to 22THEN LLC, as borrower, WidePoint Corporation, as lender, and Peter Letizia, as guarantor.

10.2 Revolving Line of Credit Agreement, dated as of November 5, 2007, by and among Protexx, Inc. and its subsidiaries, including but not limited to 22THEN LLC, as borrower, Peter Letizia, as guarantor, and WidePoint Corporation, as lender.

10.3 Security Agreement, dated as of November 5, 2007, given by Protexx, Inc. and each of its subsidiaries and 22THEN LLC, collectively, as debtors, to and in favor of WidePoint Corporation, as secured party.

10.4 Software Escrow Agreement, dated as of November 5, 2007, between 22THEN LLC and Protexx Incorporated, collectively, as supplier, WidePoint Corporation, as user, and Foley &Lardner LLP, as escrow agent.

10.5 Commercial Loan Agreement, dated August 16, 2007, between the Registrant and Cardinal Bank. (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed August 21, 2007).

10.6 Security Agreement, dated August 16, 2007, between the Registrant and Cardinal Bank. (Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed August 21, 2007).

10.7 Promissory Note, dated August 16, 2007, issued by the Registrant in favor of Cardinal Bank. (Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed August 21, 2007).

10.8 Addendum to Employment and Non-Compete Agreement between the Registrant and Daniel E. Turissini, effective as of July 25, 2007. (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed July 30, 2007).

26

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.

27

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:  November 9, 2007	/s/ STEVE L. KOMAR
	Steve L. Komar
	President and Chief Executive Officer
	/s/ JAMES T. MCCUBBIN
	James T. McCubbin
	Vice President - Principal Financial
	and Accounting Officer

28

EX-10.1

Exhibit 10.1

PROMISSORY NOTE

$100,000.00 Dated: November 5, 2007

        FOR VALUE RECEIVED, the undersigned, Protexx, Inc. and its subsidiaries, including but not limited to 22THEN LLC (collectively, the “Borrower”), HEREBY PROMISES TO PAY to the order of WidePoint Corporation (the “Lender”) UPON DEMAND on an Event of Default as further defined in the Revolving Line of Credit Agreement or upon Final Maturity (as hereinafter defined) the principal sum of One Hundred Thousand Dollars ($100,000.00) or, if less, the aggregate principal amount of the advances made by Lender to Borrower (each, an “Advance”), with such payment being guaranteed by Peter Letizia, individually (“Guarantor”), pursuant to that certain Revolving Line of Credit Agreement, dated as of November 5, 2007, between Borrower and Lender (as amended or modified from time to time, the “Credit Agreement”) (capitalized terms defined therein and not otherwise defined herein being used herein are therein defined).

        Borrower and Guarantor promise to pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.

        Both principal and interest are payable in lawful money of the United States of America to the Lender, at its office located at One Lincoln Center, R.E., Suite 1100, Oakbrook Terrace, Illinois, 60181, or at such other address as the Lender may specify in writing from time to time, in same-day funds. Each Advance owing to Lender by Borrower and Guarantor pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto, which is part of this Promissory Note.

        This Promissory Note is the Promissory Note referred to in, and is entitled to the benefits of, the Credit Agreement and secured by a Security Agreement also referred to in the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above-mentioned, the indebtedness of the Borrower and Guarantor resulting from each such Advance being evidenced by this Promissory Note, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.

[The next page is the signature page.]

        IN WITNESS WHEREOF, each of the Borrower and Guarantor has caused its duly authorized officer to sign and deliver this Promissory Note with the intent to be legally bound hereby, as of November 2, 2007.

WITNESS:	PROTEXX, INC.
/s/ Bruce Nachman	By:  /s/ Peter Letizia
Name:  Bruce Nachman	Name:  Peter Letizia
	Title:  CEO/President
WITNESS:	22THEN LLC
/s/ Bruce Nachman	By:  /s/ Peter Letizia
Name:  Bruce Nachman	Name:  Peter Letizia
	Title:  CEO/President
WITNESS:	GUARANTOR
/s/ Bruce Nachman	/s/ Peter Letizia
Name:  Bruce Nachman	Peter Letizia, Individually

Acknowledged and Accepted:

WIDEPOINT CORPORATION

By:  /s/ James McCubbin
Name:  James McCubbin
Title:  V.P. and C.F.O.

ADVANCES AND PAYMENTS OF PRINCIPAL

Date Amount of
Advance Amount of
Principal Paid
or Prepaid Unpaid Principal
Balance Notation
Made By

EX-10.2

Exhibit 10.2

REVOLVING LINE OF CREDIT AGREEMENT

        This Revolving Line of Credit Agreement, dated as of November 5, 2007 (the “Agreement”), is made by and among Protexx, Inc., a Delaware corporation whose principal office is located at 10 Fairway Drive, Suite 107, Deerfield Beach, Florida 33441 and its subsidiaries, including but not limited to 22THEN LLC (collectively, the “Borrower”), Peter, Letizia, an individual whose home address is 10784 Crescend Circle., Boca Raton, FL 33498 (“Guarantor”), and WidePoint Corporation, a Delaware corporation with its principal office located at One Lincoln Center, R.E., Suite 1100, Oakbrook Terrace, Illinois 60181 (“Lender”).

AGREEMENT

        In consideration of the mutual promises set forth herein, and intending to be legally bound, the Borrower, Guarantor and Lender hereby agree as follows:

1. Background. Lender has approved an uncommitted line of credit up to One Hundred Thousand Dollar ($100,000.00) for Borrower’s use pursuant to this Agreement.

2. Uncommitted Revolving Line of Credit. Lender hereby establishes, subject to the terms and conditions of this Agreement, a secured, uncommitted, revolving line of credit facility in favor of Borrower in an aggregated principal amount not to exceed One Hundred Thousand Dollars ($100,000.00).

3. Promise to Repay. Borrower and Guarantor promise to pay UPON DEMAND on an Event of Default or Final Maturity (as defined herein) the aggregate principal amount of all amounts provided by Lender to Borrower, up to One Hundred Thousand Dollars ($100,000.00), which are outstanding at any time under this Agreement, together with all accrued and unpaid Interest (as defined herein), if any, outstanding on such principal amount.

4. Interest. Interest shall accrue on the unpaid principal balance outstanding hereunder at a simple rate equal to ten percent (10%) per annum, calculated on a daily basis (the “Interest”).

5. Interest Payments. Borrower or Guarantor shall make payments to the order of Lender of all Interest that accrues during the term of the Agreement UPON DEMAND on an Event of Default or on or before Final Maturity.

6. Purpose of Loan. The line of credit shall be used for general corporate business purposes for the sole benefit of the Borrower; provided however, that advances made by the Lender to the Borrower under the line of credit shall not be used for purposes of paying intra-company debt, distributions to any shareholders, or corporate debt of any kind without the express written consent of Lender. Prior to each advance made under this line of credit, Borrow shall submit to Lender a detailed written spreadsheet showing the intended use of such funds relating to such advance, which shall be subject to the Lender’s approval, and thereafter Borrower agrees to promptly and only use such funds solely for each use as shown in such spreadsheet and only in the amounts shown on such spreadsheet.

Revolving Line of Credit Agreement
Protexx, Inc.

7. Maturity. All advances (if any) made under this line of credit will be due and payable to the order of Lender UPON DEMAND on an Event of Default, but in no event later than on 11:59 p.m. on January 2, 2008 (the “Final Maturity”), and at all times will be subject to the terms and conditions set forth in this Agreement and in the Promissory Note of even date herewith, a copy of which is attached hereto as Exhibit A and incorporated as if fully set forth herein, as given by Borrower in the principal amount of One Hundred Thousand Dollars ($100,000.00), payable to the order of Lender (the “Promissory Note”). The Borrower and the Guarantor agree to execute the Promissory Note at the same time that Borrower and Guarantor execute this Agreement.

BORROWER AND GUARANTOR ACKNOWLEDGE AND AGREE THAT LENDER MAY AT ANY TIME AND IN ITS SOLE DISCRETION DEMAND PAYMENT OF ALL AMOUNTS OUTSTANDING UNDER THIS AGREEMENT OR THE PROMISSORY NOTE WITHOUT PRIOR NOTICE TO THE BORROWER UPON AN EVENT OF DEFUALT OR UPON FINAL MATURITY.

8. Draw Requests. Borrower may request an advance under this Agreement in any amount by a written draw request signed by any authorized signatory of Borrower subject to the submission of a spreadsheet for Lender approval contemplated in Section 6 of this Agreement. Guarantor hereby unconditionally pledges and guarantees that Borrower shall repay to Lender in a timely manner all amounts borrowed by Borrower under this Agreement.

9. Collateral. All advances (if any) made under this line of credit shall be secured under a security agreement, a copy of which is attached hereto as Exhibit B and incorporated as if fully set forth herein (the “Security Agreement”), which and Borrow hereby authorizes liens to be filed in the appropriate jurisdictions pursuant to the terms and conditions of the Security Agreement. The Borrower and the Guarantor agree to execute the Security Agreement at the same time that Borrower and Guarantor execute this Agreement.

10. Software Escrow Agreement. The parties to this Agreement further agree to execute a Software Escrow Agreement, a copy of which is attached hereto as Exhibit C and incorporated as if fully set forth herein (“Escrow Agreement”). The Borrower and the Guarantor agree to execute the Escrow Agreement at the same time that Borrower and Guarantor execute this Agreement. Within seven (7) business days of the date of this Agreement, Borrower agrees to cause all intellectual property described in the Escrow Agreement to be deposited with the escrow agent named in the Escrow Agreement, with such intellectual property to be in the form and content as required under the Escrow Agreement Lender shall hold all relevant intellectual property in escrow for a specified period of time determined by Lender or until all amounts payable by Borrower and Guarantor to Lender have been fully and completely repaid by Borrower and Guarantor to Lender in a timely manner.

Page 2 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

11. Release of Guarantor’s Obligations. Upon delivery by Borrower of all intellectual property described under the Escrow Agreement, in the form and content as described in the Escrow Agreement, all obligations and liabilities of Guarantor imposed hereunder shall terminate and Guarantor shall no longer be liable under this Agreement, the Promissory Note and the Security Agreement.

12. Calculation of Interest. Interest shall be calculated on the basis of a year comprised of 360 days over the actual number of days in the period.

13. Credit of Payments. Any payment of principal or Interest under this Agreement must be received by Lender at its principal office (or at such other office or depository institution as Lender may from time to time designate by written notice to Borrower) by 2:00 p.m. prevailing Eastern Time on a business day in the jurisdiction where such office or institution is situated, in order to be credited on such date.

14. Application of Payments. Payments received by Lender shall be applied to charges, fees and expenses (including attorneys’ fees), accrued Interest, and principal in any order Lender may in its sole discretion choose.

15. Revolving Nature of Facility. This Agreement and the Promissory Note evidence a revolving line of credit. Borrower and Guarantor agree to be liable for all sums advanced hereunder. The unpaid principal balance owing on this facility at any time may be evidenced by endorsements on the Promissory Note, or by Lender’s records, which shall be conclusive of indebtedness.

16. Prepayment. The indebtedness evidenced by this Agreement and the Promissory Note may be prepaid in whole or in part at any time without penalty.

17. No Commitment to Fund. This is not a committed line of credit. The Borrower and Guarantor acknowledge and agree that advances made under this line of credit, if any, shall be made at the sole discretion of Lender. Lender, through its officers, may decline to make advances under the line, or terminate the line, at any time and for any reason without prior notice to the Borrower. In no event shall Borrower be entitled to further advances once the total principal amount of this facility has been advanced unless (and then only to the extent that) repayment of advances is received by Lender. This Agreement sets forth certain terms and conditions solely to assure that the parties understand each other’s expectations and to assist the parties in evaluating and monitoring the line of credit.

18. Obligations of Borrower. Lender’s willingness to consider making advances under this facility is subject to the Borrower’s ongoing agreement (a) to promptly furnish Lender, upon Lender’s written request, the Borrower’s unaudited financial statements and such other financial information as Lender may reasonably request from time to time, and (b) to notify Lender as soon as practicable following the occurrence of any Event of Default as defined herein (or event that, with the passage of time or giving of notice or both, would become an Event of Default).

Page 3 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

19. Event of Default. An “Event of Default” shall exist under this Agreement or the Promissory Note if any of the following occurs: (a) Borrower and/or Guarantor fail to make any payment required by this Agreement or the Promissory Note when due and the same is not cured within five (5) business days; (b) Borrower and/or Guarantor break any promise that Borrower and Guarantor has made to Lender, or fail to perform promptly at the time and strictly in the manner provided in this Agreement, the Promissory Note, or the Security Agreement; (c) any representation or statement made to Lender by Borrower or on Borrower’s behalf is false or misleading in any material respect; (d) Borrower and/or Guarantor become insolvent or a receiver is appointed for any part of Borrower’s property and/or Guarantor’s property; (e) Borrower or Guarantor makes any material assignment for the benefit of creditors; (f) any proceeding is commenced either by Borrower or Guarantor or against Borrower or Guarantor under any bankruptcy or insolvency law without prior written notice to Lender and such proceeding is not cured within sixty (60) calendar days; or (g) Borrower and/or Guarantor commit an actual default in the prompt payment or other performance required with respect to any of its indebtedness (including but not limited to with respect to Lender hereunder) for loans, advances or any other forms of borrowings or under any agreement under which such indebtedness is outstanding or secured.

20. Lender’s Rights Upon Default. During the existence of an Event of Default, Lender may: (i) increase the applicable rate of interest to a rate per annum that shall be two percentage points (2%) in excess of the rate otherwise in effect at any time under this Agreement, but not more than the maximum rate allowed by law (the “Default Interest Rate”); (ii) demand payment in full or in part of all principal amounts outstanding hereunder, and accelerate any and all accrued and unpaid Interest due hereunder to be immediately due and payable; and/or (iii) exercise all of its rights under this Agreement, the Promissory Note, the Security Agreement, and/or the Escrow Agreement, or at law or in equity, in order to satisfy the indebtedness of Borrower and Guarantor. In the event that Lender elects to apply the Default Interest Rate to any principal balance due hereunder, the Default Interest Rate shall continue to apply whether or not judgment shall be entered on this Agreement.

21. Late Fees. If any payment of interest or principal due hereunder is ten (10) or more calendar days late, Lender, is its sole discretion, may charge Borrower and Guarantor a late fee equal to Two Per Cent (2%) of the unpaid portion of such payment (the “Late Fee”), in addition to any other remedies authorized in this Agreement. Lender may not charge Interest against any Late Fee, or assess a Late Fee against any single unpaid amount on more than one occasion.

Page 4 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

22. Governing Law. This Agreement will be deemed to have been made, executed and delivered by Borrower, Guarantor and Lender in the State of Delaware. This Agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State of Delaware.

23. Jurisdiction. The Borrower and Guarantor hereby agree, consent and submit to the jurisdiction and venue of any state or federal court located within New Castle County, Delaware, and consents that all service of process be made by certified mail or overnight delivery service directed to the Borrower at the Borrower’s address set forth below, and service so made will be deemed to be completed either three (3) business days after the same has been deposited in the U.S. mail, postage prepaid or (ii) the next business day after being deposited with an overnight delivery service; provided that nothing contained herein shall prevent Lender from bringing any action or exercising any right against any security or against the Borrower or Guarantor, or against any property of the Borrower, within any other state or nation to enforce any award or judgment obtained in the forum specified above. The Borrower and the Guarantor each waives any objection to venue and any objection based on a more convenient forum in any action instituted hereunder.

24. Notices.

For Lender:

WidePoint Corporation
One Lincoln Centre, R.E., Suite 1100
Oakbrook Terrace, Illinois 60181
ATTN: James McCubbin, Chief Financial Officer and VP

For Borrower:

Protexx, Inc.
10 Fairway Drive, Suite 107
Deerfield Beach, Florida 33441
ATTN: President

For Guarantor:

Peter Letizia
10784 Crescend Circle
Boca Raton, FL 33498

25. Waivers.

THE BORROWER AND GUARANTOR HEREBY FOREVER WAIVE ALL OF ITS RESPECTIVE RIGHT TO PRESENTMENT, DEMAND, PROTEST, NOTICE OF DISHONOR, NONPAYMENT OR DEFAULT AND ANY OTHER NOTICES OF ANY KIND. THE BORROWER AND GUARANTOR WAIVE ANY AND ALL RIGHTS THE BORROWER AND/OR THE GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT (INCLUDING THE PROMISSORY NOTE, THE SECURITY AGREEMENT AND THE ESCROW AGREEMENT) OR ANY TRANSACTION CONTEMPLATED IN ANY OR SUCH DOCUMENTS AND ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

Page 5 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

26. All Rights To Be Preserved. No failure to exercise, and no delay in exercising, on the part of Lender, any right, power or privilege hereunder shall operate as a waiver of the same, nor shall any single or partial exercise of any right, power or privilege preclude any other or future exercise thereof, or the exercise of any other power or right. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

27. Successors in Interest. This Agreement shall bind the Borrower and the successors and assigns of the Borrower, and the benefits hereof shall inure to the benefit of Lender and its successors and assigns. All references herein to “Borrower” shall be deemed to apply to Borrower, all of its subsidiaries, and all of its successors and assigns. All references herein to “Lender” shall be deemed to apply to Lender and its successors and assigns.

28. Assignment. This Agreement shall not be assigned by the Borrower or Guarantor without the prior express written consent of Lender, but may be assigned by Lender without the consent of Borrower or Guarantor.

29. Duly Executed Documents. Prior to the making of any advances hereunder, Borrower and Guarantor must deliver to Lender a duly executed original of the Promissory Note, Security Agreement and Escrow Agreement, and any such other documents that Lender may reasonably request. All actions of Borrower and Guarantor under each of this Agreement, the Promissory Note, the Security Agreement and the Escrow Agreement have been duly approved by each of Borrower and Guarantor, and represent the duly authorized and legally enforceable actions of each of Borrower and Guarantor.

31. Survival. If any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the remainder of the Agreement, which may be given effect without the invalid or unenforceable provision, and to this end the provisions of this Agreement shall be severable.

32. Entire Understanding. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior understandings and agreements.

Page 6 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

33. Headings. All section headings in this Agreement are for convenience of reference only and do not form part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.

34. Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall constitute a complete and original instrument, but all of which together shall constitute one and the same agreement, and it shall not be necessary when making proof of this Agreement or any counterpart thereof to account for any other counterpart.

[The next page is the signature page.]

Page 7 of 8

Revolving Line of Credit Agreement
Protexx, Inc.

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the 2nd day of November, 2007.

BORROWER:	LENDER:
PROTEXX, INC.	WIDEPOINT CORPORATION
By:  /s/ Peter Letizia	By:  /s/ James McCubbin
Name:  Peter Letizia	Name:  James McCubbin
Title:  CEO/President	Title:  V.P. and C.F.O.
GUARANTOR:
/s/ Peter Letizia
Peter Letizia, Individually
SEEN AND AGREED TO:
22THEN LLC
By:  /s/ Peter Letizia
Name:  Peter Letizia
Title:  CEO/President

Page 8 of 8

EX-10.3

Exhibit 10.3

SECURITY AGREEMENT

        This SECURITY AGREEMENT (this “Agreement”), effective as of November 5, 2007, is made, executed and given jointly and severally by Protexx, Inc., a Delaware corporation and each of its subsidiaries, with a principal place of business at 10 Fairway Drive, Suite 107, Deerfield Beach, Florida 33441, and 22THEN LLC, a Delaware limited liability company, with its principal place of business at 350 Fifth Ave, 59^th Floor, New York, NY 10118 (collectively referred to herein as the “Debtor”), to and in favor of WidePoint Corporation, a Delaware corporation (the “Secured Party”), with a principal place of business at One Lincoln Center, R.E., Suite 1100, Oakbrook Terrace, Illinois 60181. Capitalized terms used in this Agreement and not defined herein shall have the meaning given such terms in the Revolving Line of Credit Agreement, dated as of November 5, 2007 (as amended or modified from time to time, the “Credit Agreement”).

RECITALS

        FOR VALUE RECEIVED and pursuant to the Credit Agreement, a certain promissory note (“Note”) and software escrow agreement (“Escrow Agreement”) referred in the Credit Agreement to be executed contemporaneously herewith, the Secured Party has agreed to lend up to One Hundred Thousand and 00/100 Dollars ($100,000.00) upon such terms as stated therein. As security for the Note and also to secure any other obligations or liability of the Debtor to the Secured Party, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, whether under the Note, the Credit Agreement, Escrow Agreement or otherwise, Debtor hereby grants and conveys to the Secured Party, a security interest in all assets owned by the Debtor, including but not limited to all tangible and intangible personal property owned by the Debtor, all proceeds from the sale or disposition of the assets owned by the Debtor, all replacements or additions to the assets owned by the Debtor, any intellectual property owned by the Debtor, including but not limited to source and object codes, and all inventory or work-in-progress of Debtor acquired or produced hereafter (collectively referred to herein as the “Collateral”), all proceeds thereof, if any, and all additions and accessions thereto.

AGREEMENT

        In consideration of the mutual representations, warranties, covenants and agreements set forth in this Agreement, the Credit Agreement and the Note, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows:

ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES

        1.1    Recitals. The Debtor and the Secured Party hereby acknowledge and agree that the recitals set forth above are true and correct and hereby are incorporated herein by reference.

        1.2    Good Standing; Authorization. Each entity comprising the Debtor is duly organized, validly existing, and in good standing under the laws of the State of Delaware and authorized to do business in all relevant jurisdictions. Each entity comprising the Debtor has been duly authorized to execute and deliver this Agreement, which is a valid and binding obligation of Debtor.

        1.3    Use of Loan Proceeds. The Debtor and the Secured Party hereby acknowledge and agree that the debt evidenced by the Note and secured by the Collateral is for general corporate business purposes for the sole benefit of the Debtor, subject to the restrictions set forth in the Credit Agreement.

        1.4    Location of Collateral. That portion of the Collateral consisting of tangible personal property will be kept at Debtor’s principal place of business identified above throughout the duration of this Agreement. Debtor will promptly notify Secured Party of any change in the location of such tangible personal property and will not remove such Collateral from Debtor’s current principal place of business in Deerfield Beach, Florida without written consent of the Secured Party. A full, complete and working copy of the portion of the Collateral consisting of software and other intellectual property shall be delivered by Debtor to the escrow agent of the Secured Party pursuant to the terms of the Escrow Agreement.

        1.5    Priority of Security Interest. Debtor is the sole owner of the Collateral free from any adverse lien, security interest or encumbrance, with the exception of the security interest granted hereunder, and Debtor will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein. Debtor represents that no financing statement covering any of the Collateral or any proceeds thereof is on file in any public office and that none will be filed without the prior written consent of the Secured Party. The lien granted to the Secured Party under this Agreement will constitute a first priority lien on the Collateral on the filing of a financing statement and Debtor’s grant of such lien to Secured Party does not constitute a fraudulent conveyance under any applicable law in the State of Florida or any other jurisdiction.

        1.6    Sale, Transfer or Other Disposition Prohibited. Debtor will not sell, transfer, or otherwise dispose of any of the Collateral or any interest therein, or offer so to do, without the prior written consent of Secured Party, except for usual and customary inventory items sold in the ordinary course of the Debtor’s business to third parties on arm’s length terms.

        1.7    Maintenance and Use of Collateral. Debtor represents that Debtor owns all of the Collateral free and clear of all liens and encumbrances and agrees that Debtor will not encumber, assign, or grant any security interest in or file any assignment or financing statement with respect to the Collateral, or permit any of the foregoing, without the prior written consent of the Secured Party, and Debtor hereby represents that Debtor has not heretofore done so. Debtor represents that Debtor will not use the Collateral in violation of any statute or ordinance. Secured Party may examine and inspect the Collateral at any time, wherever located. Debtor acknowledges that, even if the Secured Party sells, assigns or otherwise transfers the Note to a third party, the Secured Party’s security interest in the Collateral will survive, and will extend to cover any proceeds from the sale of the Collateral, until the Note is paid in full. Debtor, at its own cost and expense, will maintain the Collateral in good repair and regularly updated condition. Unless otherwise approved by prior written consent of the Secured Party, Debtor shall (i) not sell, assign, lease, transfer or otherwise dispose of any part of the Debtor’s business or the Debtor’s assets, except for inventory items in the ordinary course of the Debtor’s business; (ii) not sell, assign, lease, transfer or otherwise dispose of any assets, or enter into any agreement to do so; (iii) not enter into any sale and leaseback agreement covering any of its fixed assets; (iv) maintain and preserve all rights, privileges, and franchises the Debtor possesses that are material to the operation of the Debtor’s business; and (v) make any repairs, renewals, or replacements to keep the Debtor’s properties and the Collateral in good working condition.

        1.8    Payment of Taxes. Debtor will pay promptly when due all taxes and assessments upon the Collateral and the Note.

        1.9    Perfection of Security Interest and Further Assurances. Debtor authorizes Secured Party to file, in jurisdictions where this authorization will be given effect, a financing statement signed only by the Secured Party describing the Collateral; and from time to time at the request of Secured Party, Debtor shall execute one or more financing statements and such other documents (and Debtor shall pay the costs of filing or recording the same in all public offices deemed necessary or desirable by the Secured Party) and do such other acts and things, all as the Secured Party may request, to establish and maintain a valid security interest in the Collateral (free of all other liens and claims whatsoever) to secure the payment of the Note, including, without limitation, deposit with Secured Party any certificate of title issuable with respect to any of the Collateral and notation thereof of the security interest hereunder. At any time and from time to time, upon request of the Secured Party, Debtor will give, execute and promptly return by certified mail or overnight delivery service to the Secured Party, any notice, financing statement, continuation statement, instrument, document or agreement that the Secured Party may consider necessary or desirable to create, preserve, continue, perfect or validate the assignments and security interest granted hereunder or which the Secured Party may consider necessary or desirable to exercise or enforce its rights hereunder with respect to such assignment and security interest. Debtor shall notify the Secured Party in writing of a change in the Debtors’ respective names, identities, or corporate structures within five (5) calendar days after the change. Debtor shall also cooperate with the Secured Party to enable the Secured Party to file either a new financing statement or an amendment to the existing financing statement to reflect the change and to continue the Secured Party’s security interest in the Collateral.

        1.10    Insurance. Debtor shall at all times maintain adequate insurance in appropriate form and amounts, which shall not be less than the outstanding principal and accrued interest on the Note, and with reliable companies. Copies of certificates of insurance or policies shall be provided to the Secured Party, naming Secured Party as an additional insured. Debtor shall give immediate written notice to the Secured Party and to insurers of loss or damage to the Collateral.

ARTICLE II
DEFAULT BY DEBTOR

        2.1    Events of Default. Debtor shall be in default under this Agreement upon the happening of any of the following events or conditions, whether the requirement is contained in this Agreement, the Credit Agreement, or any ancillary agreement between the parties: (a) failure or omission to pay when due any amounts due under the Note (or any installment thereof or interest thereon), or default in the payment or performance of any obligation, covenant, agreement, or liability contained or referred to herein, including but not limited to the Credit Agreement and the Escrow Agreement, giving effect to any period of grace provided therein; (b) any warranty, representation, or statement made or furnished to Secured Party by or on behalf of any Debtor proves to have been false in any material respect when made or furnished; (c) loss, theft, substantial damage, destruction of any material portion of the Collateral not covered by adequate insurance, or the execution of any levy, seizure, or attachment thereof or thereon; (d) Debtor becomes insolvent or unable to pay debts as they mature or makes an assignment for the benefit of creditors, or any proceeding is instituted by or against Debtor alleging that Debtor is insolvent or unable to pay debts as they mature which is not dismissed within sixty (60) days after the institution thereof; or (e) the appointment of a receiver for the Collateral or any portion thereof or for any property in which Debtor has an interest (collectively, “Events of Default”).

        2.2    No Waiver. No waiver by Secured Party of any default shall operate as a waiver of any other default or of the same default on a future occasion. No delay or omission on the part of Secured Party in exercising any right or remedy shall operate as a waiver thereof, and no single or partial exercise by Secured Party of any right or remedy shall preclude any other or further exercise thereof or the exercise of any other right or remedy.

2.3    Performance of Debtor’s Obligations. Upon Debtor’s failure to perform any of its duties hereunder, Secured Party may, but it shall not be obligated to, perform any of such duties and Debtor shall forthwith upon demand reimburse Secured Party for any expenses incurred by Secured Party in so doing. All such sums advanced by the Secured Party shall be deemed obligations of the Debtor secured hereby.

ARTICLE III
REMEDIES

        3.1    General Remedies. Upon the occurrence of any Events of Default hereunder, or under the Credit Agreement, or any ancillary agreement between the parties, including but not limited to the Escrow Agreement, which continues after any period for cure set forth therein, or at any time thereafter, Secured Party may, at its option, declare the Note secured hereby (subject to any curative period contained therein), immediately due and payable without demand or notice and the same there upon shall immediately become and be due and payable without demand or notice, and Secured Party shall have and may exercise from time to time any and all rights and remedies of a Secured Party under the Florida Uniform Commercial Code and any and all rights and remedies available to it under any other applicable law; and upon request or demand of Secured Party, Debtor shall, at its expense, assemble the Collateral and make it available to the Secured Party, for the sole ownership and use of the Secured Party, at a convenient place acceptable to Secured Party; and Debtor shall promptly pay all costs incurred by the Secured Party in the enforcement of rights hereunder, including reasonable attorneys’ fees and legal expenses, and expenses of any repairs to any of the Collateral and expenses of any repairs to any realty or other property to which any of the Collateral may be affixed or be a part.

        3.2    Collection of Proceeds. Upon the occurrence of any uncured Events of Default hereunder, Secured Party may demand, enforce, collect and sue for all Collateral and for all sums due Debtor (whether classified as accounts or general intangibles), and all proceeds thereof (either in Debtor’s name or Secured Party’s name at the latter’s option), with the right to enforce, compromise, settle or discharge any rights in such Collateral or proceeds thereof, with all such collateral and the proceeds thereof being deemed to be the sole and exclusive property of the Secured Party. Debtor appoints Secured Party as Debtor’s attorney-in-fact to endorse Debtor’s name on all checks, commercial paper and other instruments pertaining to the proceeds.

        3.3    Notice and Disposition of Collateral. Upon the occurrence of any uncured Events of Default hereunder, unless the Collateral is perishable or threatens to decline rapidly in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, or sent by overnight delivery service to Debtor at the address of Debtor shown at the beginning of this agreement or at any other address shown on the records of Secured Party, at least ten (10) calendar days before the time of the sale or disposition. Expenses of retaking, holding, preparing for sale, selling or the like, including attorneys’ fees, paralegals’ fees and legal expenses of Secured Party, shall become a part of the Note and be paid out of the proceeds of the Collateral or by Debtor to Secured Party. Upon disposition of any Collateral after the occurrence of any default hereunder, Secured Party shall account to Debtor for any surplus, but Secured Party shall have the right to apply all or any part of such surplus (or to hold the same as a reserve) against any amounts due under the Note, whether or not they, or any of them, be then due, and in such order of application as Secured Party may from time to time elect. The Debtor shall remain liable for any deficiency resulting from a sale of the Collateral and shall pay any such deficiency forthwith on demand. Notwithstanding anything contained in this Agreement to the contrary, in the event of an uncured Event of Default under this Agreement, the Secured Party may elect to keep, own and use the Collateral for its own benefit in consideration for the amount of indebtedness then outstanding and due to the Secured Party by the Debtor.

ARTICLE IV
GENERAL PROVISIONS

        4.1    Additional Security. This Agreement shall constitute additional security and rights in favor of the Secured Party and shall not be deemed to diminish or reduce any rights of the Secured Party under any other instrument executed in connection therewith.

        4.2    Time of the Essence. Time is of the essence of this Agreement.

        4.3    Heirs, Successors and Assigns. The terms of this Agreement shall bind and inure to the benefit of the heirs, devisees, representatives, successors and assigns of the Secured Party. The foregoing sentence shall not be construed to permit Debtor to assign this Agreement.

        4.4    JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE DEBTORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH DEBTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE NOTE AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER DEBTORS HEREUNDER. DEBTOR ACKNOWLEDGES AND AGREES THAT THE SECURED PARTY SHALL NOT BE REQUIRED FIRST TO INSTITUTE SUIT OR EXHAUST ITS REMEDIES AGAINST BOTH DEBTORS, BUT THAT THE SECURED PARTY, IN ITS SOLE DISCRETION, MAY INSTITUTE SUIT OR EXHAUST ITS REMEDIES AGAINST EACH DEBTOR INDIVIDUALLY.

        4.5    Governing Law; Mutual Waiver of Jury Trial.

            (a)     THIS AGREEMENT SHALL BE GOVERNED BY, INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF FLORIDA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF FLORIDA TO BE APPLIED.

            (b)     AS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT, THE DEBTOR AND THE SECURED PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ALL OF THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY TERMS OR PROVISIONS OF THIS AGREEMENT. NO PARTY HERETO SHALL SEEK TO CONSOLIDATE ANY PROCEEDING IN WHICH THE RIGHT TO A TRIAL BY JURY HAS BEEN WAIVED WITH ANY OTHER PROCEEDING IN WHICH THE RIGHT TO A TRIAL BY JURY CANNOT BE, OR HAS NOT BEEN, WAIVED. THE NON-PREVAILING PARTY IN ANY DISPUTE OR LEGAL ACTION BETWEEN THE PARTIES AGREES TO PAY THE FULL AMOUNT OF ALL LEGAL FEES INCURRED BY THE PREVAILING PARTY IN SUCH DISPUTE OR LEGAL ACTION. THE TERMS AND PROVISIONS OF THIS SECTION 4.5 HAVE BEEN DISCUSSED FULLY BY THE PARTIES HERETO, AND THE TERMS AND PROVISIONS HEREOF SHALL NOT BE SUBJECT TO ANY EXCEPTIONS.

        4.6    Jurisdiction and Venue.

            (a)     Each of the parties hereto hereby irrevocably and unconditionally submits, for himself, herself or itself and his, her or its assets, to the exclusive jurisdiction of any Florida state court or federal court of the United States of America having jurisdiction over Deerfield Beach, Florida, and any appellate court from any such Florida state court or federal court, in any proceeding arising out of, connected with, related to or incidental to this Agreement or the transactions contemplated hereby, or for recognition or enforcement of any judgment arising therefrom, connected thereto, related thereto or incidental thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims with respect to any such proceeding may be heard and determined in any such Florida state court or, to the extent permitted by applicable law, in any such federal court. Each of the parties hereto hereby agrees that a final judgment in any such proceeding shall be conclusive and may be enforced in any other jurisdiction by a proceeding on the judgment or in any other manner provided by applicable law.

            (b)     Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent he, she or it legally and effectively may do so, any objection that he, she or it now or hereafter may have to the laying of venue of any proceeding arising out of, connected with, related to or incidental to this Agreement or the transactions contemplated hereby in any Florida state court or federal court of the United States of America sitting in Deerfield Beach, Florida, or any appellate court from any such Florida state court or federal court. Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent he, she or it legally and effectively may do so, the claim or defense of an inconvenient forum to the maintenance of such proceeding in any such Florida state court or federal court.

        4.7    Entire Agreement. This Agreement, the Note and the Escrow Agreement contain all of the agreements between the parties hereto with respect to the relationship created by this Agreement and supersede all prior agreements or understandings among the among the parties hereto with respect to the subject matter of this Agreement, and supersede all prior contracts and other undertakings among the parties hereto with respect to the subject matter hereof.

        IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first above written.

	DEBTOR:
WITNESS:	PROTEXX, INC., a Delaware corporation
/s/ Dustin Feldman	By:  /s/ Peter Letizia
Name:  Dustin Feldman	Name:  Peter Letizia
	Title:  CEO/President
WITNESS:	22THEN LLC, a Delaware corporation
/s/ Dustin Feldman	By:  /s/ Peter Letizia
Name:  Dustin Feldman	Name:  Peter Letizia
	Title:  CEO/President
	SECURED PARTY:
	WIDEPOINT CORPORATION, a Delaware corporation
	By:  /s/ James McCubbin
	James McCubbin
	Chief Financial Officer and Vice President

EX-10.4

Exhibit 10.4

Software Escrow Agreement

        This Software Escrow Agreement (the “Agreement”) is entered into as of November 5, 2007, between 22THEN LLC and Protexx Incorporated (collectively, the “Supplier”); WidePoint Corporation (“User”); and the law firm of Foley & Lardner LLP (the “Escrow Agent”).

        In consideration of the mutual premises and covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows:

1. Supplier agrees that upon the execution of this Agreement the Supplier shall deposit into an escrow account with the Escrow Agent at the office of the Escrow Agent located at 3000 K Street, N.W., Suite 500, Washington, D.C. 20007, the software source code (the “Source Code”) for all software owned by Supplier (the “Software”), as well as the proprietary hardware schematics (the “Hardware Schematics”) of Supplier related to the Source Code and a full and complete working version of all Software on a CD-ROM which is readable and useable on any Personal Computer using Microsoft Windows. Supplier does hereby assume responsibility to update and keep current all such Software on a CD-ROM. Supplier and User agree that User shall be entitled to access the Source Code in accordance with the terms of this Agreement.

2. User may obtain a copy of the items in escrow, subject to the terms of this Agreement, upon the following events and conditions:

a. Supplier has filed a petition in bankruptcy for liquidation, or has made a general assignment for the benefit or creditors or has a receiver appointed for all or substantially all of its business, and same has not been discharged or terminated without prejudice to User within ninety (90) days thereafter; or

b. Supplier has been liquidated, been dissolved, or ceased to operate its business in the normal course; or

c. Supplier has breached any agreement with User.

3. Upon the occurrence of a condition set forth in paragraph 2 above which entitles User to a copy all items in escrow, User shall deliver to Escrow Agent an affidavit executed by the User which sets forth information identifying the occurrence of the condition under paragraph 2 of this Agreement which the User is citing as the basis for the release of all items in escrow to the User from the Escrow Agent.

Escrow Agent shall then send a copy of User’s affidavit to Supplier by certified mail, return receipt requested, or by overnight delivery service. Unless within fifteen (15) calendar days after the date of sending of such affidavit to Supplier, Escrow Agent receives an affidavit from Supplier, or an authorized representative of Supplier, disputing the facts set forth in the User’s affidavit, or setting forth additional facts which, in Supplier’s sole judgment, terminates the User’s right to receive a copy of the items in Escrow, Escrow Agent will promptly furnish a copy of the applicable material to the User.

4. If Escrow Agent receives from Supplier an affidavit disputing the User’s affidavit, or setting forth additional facts which, in Supplier’s sole judgment, terminates the User’s right to receive the items in escrow, Escrow Agent will furnish a copy of the Supplier’s affidavit to the User, and will not furnish a copy of the items in Escrow to the User until Escrow Agent either (i) receives an agreement between Supplier and the User, or a certified copy of a court order, directing Escrow Agent to furnish a copy of the Source Code to User or (ii) Escrow Agent determines in its reasonable judgment that User is entitled to a copy of the items in Escrow.

5. User shall pay Supplier an escrow maintenance fee in the amount of Five Hundred ($500.00) Dollars per year. If User fails to pay such fee to Escrow Agent upon execution of this Agreement and before the annual anniversary date of this Agreement each year thereafter, then the Escrow Agent shall provide a copy of the items in Escrow to the User, after which the Escrow Agent shall have no further duties whatsoever.

6. The parties expressly acknowledge and agree that Escrow Agent will not be liable to any person or entity for any harm that results from any act or omission of Escrow Agent in connection with serving as Escrow Agent, except only in the case of Escrow Agent’s intentional fraud or willful misconduct. Escrow Agent is serving as the holder of all items in escrow, and the parties hereto shall indemnify and hold harmless Escrow Agent from and against any and all loss, cost, damage, liability or expense, including costs of reasonable attorney’s fees actually incurred to which Escrow Agent may be put or which it may incur by reason of its acting in such capacity as Escrow Agent, including the ordinary and reasonable costs of administering this Agreement, including but not limited to any additional cost that may be incurred by Escrow Agent as the result of a dispute between the parties; provided, however that the parties shall not indemnify Escrow Agent with respect to any loss, cost, damage, liability or expense occasioned by Escrow Agent’s intentional fraud or willful misconduct.

7. If User and Supplier shall be in disagreement about the interpretation of this Agreement, or the rights and obligations with respect the items in escrow or the propriety of any action contemplated by Escrow Agent hereunder, then Escrow Agent may, in its sole discretion, file an action in any court of competent jurisdiction to resolve any such dispute or Escrow Agent may resign and terminate its services under this Agreement at any time after the occurrence of such a dispute by issuing a written notice to each of Supplier and User. Thereafter, Escrow Agent shall be discharged from all further duties and liabilities, if any, under this Agreement. The Escrow Agent shall be entitled to the payment by the parties to Escrow Agent of all costs and expenses, including attorneys’ fees, incurred by Escrow Agent in connection with any such action.

Page 1 of 3

        In addition to the foregoing, Escrow Agent may resign at any time for any reason upon thirty (30) days written notice to the parties to this Agreement. In the event of any such resignation, in the event the parties cannot mutually agree upon a substitute Escrow Agent, then Supplier may designate such substitute Escrow Agent in its reasonable discretion. Nothing contained in this Agreement shall be construed to imply in any manner, at any time or in any way the Escrow Agent’s representation of any party hereto either with respect to the subject matter hereof nor with respect to any other matter, including any dispute between the parties hereto.

8. The parties hereto acknowledge and agree that Escrow Agent shall be entitled to conclusively rely on any statements or directions made by Supplier in any notice or demand, and shall not be liable for the truthfulness or accuracy thereof.

9. This Agreement shall be effective upon execution by the parties and shall be governed by, subject to and construed according to the laws of the State of Delaware. Any dispute shall be conducted in a court of competent jurisdiction in or serving the District of Columbia where the Escrow Agent is located.

10. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision of this Agreement.

11. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when deposited in a United States post office, registered or certified mail, postage prepaid, return receipt requested, or sent via overnight delivery service, and addressed as follows:

If to Supplier:

Protexx Incorporated
22THEN LLC
350 Fifth Ave, 59^th Floor
New York, NY 10118

If to Escrow Agent:

Foley & Lardner LLP
3000 K Street, N.W.
Suite 500
Washington, DC 20007
Attn: Thomas James, Esq.

If to User:

WidePoint Corporation
One Lincoln Center, R.E., Suite 1100
Oakbrook Terrace, Illinois 60181
Attn: James McCubbin

12. The rights and obligations hereunder shall not be assignable by any party without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed. This Agreement shall be binding upon and ensure to the benefit of the parties hereto, and their successors and permitted assigns.

13. This Agreement may not be amended or modified except by written instrument executed by the parties hereto. In the event any such amendment changes or relates to the obligations of Escrow Agent hereunder, any such amendment must also be executed by Escrow Agent.

14. This Agreement, constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, discussions, whether oral or written, of the parties. There are no warranties, representations, promises or inducements or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein.

Page 2 of 3

SUPPLIER:

Protexx Incorporated
By:  /s/ Peter Letizia	11/05/2007
Name:  Peter Letizia	Date
Its:  President/CEO
22THEN LLC:
By:  /s/ Peter Letizia	11/05/2007
Name:  Peter Letizia	Date
Its:  President/CEO

ESCROW AGENT: FOLEY & LARDNER LLP

By:  /s/ Thomas James, Esq.	11/07/2007
Name:  Thomas James, Esq.	Date

USER: WIDEPOINT CORPORATION

By:  /s/ James McCubbin	11/05/2007
Name:  James McCubbin	Date
Its: V.P. and C.F.O.

Page 3 of 3

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, Steve L. Komar, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of WidePoint Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2007	By:  /s/ STEVE L. KOMAR
	Steve L. Komar
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, James T. McCubbin, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of WidePoint Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 9, 2007	By:  /s/ JAMES T. MCCUBBIN
	James T. McCubbin
	Chief Financial Officer

EX-32

Exhibit 32

Written Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of WidePoint Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2007 ( the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ STEVE L. KOMAR
Steve L. Komar
Chief Executive Officer

/s/ JAMES T. MCCUBBIN
James T. McCubbin
Chief Financial Officer

Date: November 9, 2007