SOURCE: Thinkpath Inc.

May 22, 2006 08:00 ET

Thinkpath Releases Financial Results for the Quarter Ended March 31, 2006

TORONTO -- (MARKET WIRE) -- May 22, 2006 -- Thinkpath Inc. (OTCBB: THPHF) today announced financial results for the quarter ended March 31, 2006.

Revenues for the three months ended March 31, 2006 decreased by $690,000 or 19% to $2,910,000 as compared to $3,600,000 for the three months ended March 31, 2005. This decrease is largely attributable to the decline in sales of approximately $970,000 from one major customer who represented 38% of the company's total revenue for the three months ended March 31, 2005 compared to only 14% for the three months ended March 31, 2006.

Gross profit for the three months ended March 31, 2006 decreased by $450,000 or 35% to $820,000 compared to $1,270,000 for the three months ended March 31, 2005. As a percentage of revenue, gross profit for the three months ended March 31, 2006 was 28% compared to 35% in 2005. This decrease is a result of the additional hardware and software expenses originally procured in 2005 to support our major customer and which were not utilized and therefore non-billable during the three months ended March 31, 2006.

For the three months ended March 31, 2006, the company recorded a loss from continuing operations of $370,000 compared to income of $240,000 for the three months ended March 31, 2005. This loss can be attributed to the aforementioned decline in revenue and gross profit as well as the increase in administrative expenses including legal and accounting fees as well as the increase in selling expenses including the additional salaries of new sale staff hired during the later part of 2005 and early 2006.

For the three months ended March 31, 2006, the company recorded a net loss of $370,000 or (0.09) per share compared to a net loss of $140,000 or (0.04) per share for the three months ended March 31, 2005.

At March 31, 2006, the company had a working capital deficiency of $1,100,000 and stockholder's equity of $1,660,000 compared to a working capital deficiency of $770,000 and stockholder's equity of $2,020,000 at December 31, 2005.

"Our 1st quarter results were certainly disappointing and highlights the need to diversify our client base while adding more anchor clients. The marketing and sales plan which was rolled out late in 2005 has addressed this and it is working as evidenced by 12 new clients so far in 2006 and increased sales in April and May. Additionally we hope to complete an acquisition in this quarter and another one in the 3rd quarter which will further reduce our dependency on one major client and broaden our scope of engineering disciplines and services," stated Declan French, Thinkpath's CEO, and Chairman.

Further information about the company may be found at www.thinkpath.com.

Forward-Looking Statement

This press release contains forward-looking statements regarding Thinkpath Inc., its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause Thinkpath's actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by Thinkpath in this news release and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Thinkpath's business.

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