SOURCE: Thinkpath Inc.

November 22, 2005 06:00 ET

Thinkpath Releases Financial Results for the Third Quarter Ended September 30, 2005

TORONTO -- (MARKET WIRE) -- November 22, 2005 -- Thinkpath Inc. (OTC BB: THPHF) today announced financial results for the third quarter ended September 30, 2005.

Revenues for the three and nine months ended September 30, 2005 were $3,169,632 and $10,376,441 compared to $3,125,899 and $9,507,784 for the same periods in 2004. The year to date increase in revenue is largely attributable to new engineering contracts won in Canada as well as continuing contracts with existing customers in the defense industry awarded in 2004.

Gross profit for the three and nine months ended September 30, 2005 was 29% and 31% compared to 37% and 36% for the same periods in 2004. The decrease in gross profit is attributable to the addition of lower margin projects in 2005 as a means of establishing a new client base, delayed start dates of higher margin defense projects and the increase in lower margin contract placement sales compared to higher margin project sales.

For the three months ended September 30, 2005, the company recorded an operating loss from continuing operations of $273,985 compared to income of $55,967 for the three months ended September 30, 2004. For the nine months ended September 30, 2005, the company recorded income from continuing operations of $24,790 compared to $237,343 for the nine months ended September 30, 2004. This decrease is largely attributable to the increase in selling expenses including the redesign of the Company's website and marketing materials and the cost of shares, warrants and fees paid to Financial Media Relations, LLC, the Company's new investor and public relations firm.

For the three and nine months ended September 30, 2005, the company recorded a net loss of $534,335 or (0.11) per share and $1, 499,952 or (0.35) per share compared to a net loss of $1,039,732 or (0.93) per share and $2,667,350 or (3.18) per share for the same period in 2004. Included in the net loss for the three and nine months ended September 30, 2005 is interest expense of $142,920 and $1,149,005 related to the beneficial conversion features on the Company's convertible debt. The interest charges on convertible debt for the same periods last year were $977,743 and $2,507,880.

At September 30, 2005, the company had a cash flow deficiency from operations of $493,680 largely attributable to the increase in accounts receivable. At September 30, 2004, the company had a cash flow deficiency from operations of $1,015,833 attributable to the decrease in accounts payable.

At September 30, 2005, the company had cash of $166,242, working capital of $400,889 and stockholder's equity of $5,099,208, which is a considerable improvement over December 31, 2004 at which time the company had cash of $180,121, a working capital deficiency of $121,509 and stockholder's equity of $3,999,951.

"We are satisfied with the third quarter results in light of the delay of certain high margin contracts," stated Declan French, CEO and Chairman of Thinkpath Inc. "We believe that our considerable marketing and promotion activities undertaken in the third quarter will prove to be highly successful in securing new clients and contract awards in 2006. With the continued support of our financial partner, Laurus Master Fund, Ltd., we are well positioned to grow organically and pursue strategic acquisitions."

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.

Contact Information

  • For More Information and Investor Relations
    Please Contact
    Tracy McKay
    Thinkpath Inc.
    Tel: (905) 460-3040
    Email: communications@thinkpath.com

    Chief Financial Officer
    Thinkpath Inc.
    Tel (905) 460-3042
    Fax (905) 460-3050