UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

AMENDED
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.1)

Filed by the registrant [X]
Filed by a party other than the registrant [_]

Check the appropriate box:
[X] Preliminary Proxy Statement.
[_] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
[_]|_| Definitive Proxy Statement
[_] Definitive additional materials.
[_] Soliciting material pursuant to Rule 14a-11 (c) or Rule 14a-12.

MAGNITUDE INFORMATION SYSTEMS, INC.
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:

[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

1. Amount Previously Paid: _____________________________________________________________________
2. Form, Schedule or Registration Statement No.: _______________
3. Filing Party: __________________________________________________________________________________________
4. Date Filed: _____________________________________________________________________________________________

MAGNITUDE INFORMATION SYSTEMS, INC.

401 State Route 24
Chester, New Jersey 07930
--------------------------

NOTICE OF
ACTIONSPECIAL MEETING OF SHAREHOLDERS BY WRITTEN CONSENT
IN LIEU OF SHAREHOLDER'S MEETING

ToSTOCKHOLDERS
-------------------------

November __, 2005
-------------------------

NOTICE IS HEREBY GIVEN that the Stockholders:

On behalfSpecial Meeting of the Board of Directors and managementStockholders ("Special
Meeting") of Magnitude Information Systems, Inc. (the "Company") will be held at
401 State Route 24, Chester, New Jersey 07930 on December 7, 2005, at 10:30
a.m., we urge you to consider and act uponfor the following proposedpurposes, all as more fully described in the attached
Proxy Statement:

1. To elect four directors to serve until the 2006 Annual Meeting of
Stockholders and until their successors are elected and qualified (Proposal
One);

2. To ratify an amendment to the Company's Certificate of Incorporation
which the Board of Directors recommends that shareholders approve by Written
Consent in lieu of a Shareholder's Meeting:

1. Increaseincreasing the number of authorized common shares of Common Stock thatfrom 200,000,000 to
300,000,000 (Proposal Two);

3. To ratify and approve the Company is
authorized to issue from 100,000,000 to 200,000,000 shares.

PursuantAmendment to the applicable provisionsEmployment Agreement of
Steven D. Rudnik, President and Chief Executive Officer (Proposal Three);

4. To consider and act upon a proposal to ratify the Delaware General Corporation
Law and our Company's Certificateappointment of
Incorporation,Rosenberg Rich Baker Berman & Company as amended, the written
consent of stockholders owning no less than the majority of the Company's outstanding shares of common stock are required in order to amendindependent registered
public accounting firm for the Company's
Certificate of Incorporation. Yourfiscal year ended December 31, 2005 (Proposal
Four); and

5. To transact such other business as may properly come before the meeting
and any and all adjournments thereof.

The Board of Directors has fixed May 14, 2004,the close of business on October 21, 2005,
as the record date for purposesthe determination of this solicitation. Therefore, only holders who
owned Company common shares asstockholders entitled to notice of,
and to vote at, the closemeeting or any adjournment thereof.

You are requested to date, sign and return the accompanying form of business on May 14, 2004, are
permitted to provide their Written Consent.

The proposal to amend our Certificate of Incorporation and procedure to
exercise your rights in connection with this solicitation is describedproxy
in the accompanying Consent Solicitation Statement. It is requested that your written
consent, using the accompanying Consent Card, be delivered to Securities
Transfer Corporation, 2591 Dallas Parkway, Suite 102 Frisco, Texas 75034,
Attention: Proxy Department, on or before June 30, 2004. An addressed return
envelope is enclosed for thisthat purpose (to which requires no postage need be affixed
if mailed in the United States.States) whether or not you expect to attend the meeting
in person. The proxy is revocable by you at any time prior to its exercise and
will not affect your right to vote in person in the event you attend the meeting
or any adjournment thereof. The prompt return of the proxy will be of assistance
in preparing for the meeting and your cooperation in this respect will be
appreciated.

By Order of the Board of Directors

/s/ Joerg L.H. Klaube
---------------------------------
Joerg H. Klaube, Secretary and
Chief Financial Officer
Chester, New Jersey
JuneNovember __, 20042005

MAGNITUDE INFORMATION SYSTEMS, INC.

401 State Route 24
Chester, New Jersey 07930

CONSENT SOLICITATION--------------------------

PROXY STATEMENT

FOR
THE SOLICITATION--------------------------

SPECIAL MEETING OF WRITTEN CONSENTS
FOR THE ADOPTION OF AN AMENDMENTSTOCKHOLDERS
TO THE
CERTIFICATE OF INCORPORATIONBE HELD ON DECEMBER 7, 2005

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

This Consent SolicitationProxy Statement (the "Consent Statement")and the accompanying form of proxy is furnished to
the stockholders of MAGNITUDE INFORMATION SYSTEMS, INC., a Delaware corporation
(the "Company"Magnitude Information Systems, Inc. ("Company"), in connection
with the solicitation of proxies, in the accompanying form, by the Board of
Directors of the Company for use in connection withvoting at the Special Meeting of
Stockholders to be held at 401 State Route 24, Chester, New Jersey 07930 on
December 7, 2005, at 10:30 a.m., and at any and all adjournments thereof. Any
proxy given pursuant to this solicitation may be revoked by the Companyperson giving it
by giving notice to the Secretary of the Company in person, or by written
consent of stockholders. The stockholders arenotification actually received by the Secretary, at any time prior to its being
asked to provide their written consent forexercised. Unless otherwise specified in the adoption of an amendment
(the "Amendment") toproxy, shares represented by
proxies will be voted FOR the Certificate of Incorporationelection of the Company.nominees listed herein.

The Amendment would increase the number of shares of common stock, $.0001 par value
(the "Common Stock"), which the Company has authority to issue from 100,000,000
to 200,000,000 shares. The text of the Amendment is attached hereto as Exhibit
A.

The Company intends to distribute this Consent Statement and the accompanying
Consent Card commencing on or about June __, 2004 to the holders of record of
the Common Stock as of the close of business on May 14, 2004. This date is
referred to as the "record date." Written consents of stockholders representing
a majority of the outstanding shares of Common Stock at the record date are
required to approve the Amendment.

The principalCompany's executive offices of the Company are located at 401 State Route 24 Chester,
New Jersey 07930,07930. On or about November __, 2005, this Proxy Statement and the
telephone numberaccompanying form of proxy, together with a copy of the Company's Annual Report
on Form 10-KSB, as amended, for the fiscal year ended December 31, 2004,without
exhibits, are to be mailed to each stockholder of record as of the close of
business on October 21, 2005.

VOTING SECURITIES

The Board of Directors has fixed the close of business on October 21,
2005, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Special Meeting. Only stockholders of record at
the close of business on that date will be entitled to vote at the Special
Meeting or any and all adjournments thereof. As of October 21, 2005, the Company
had issued and outstanding 139,106,672 shares of Common Stock, the Company's
only class of voting securities outstanding. Each stockholder of the Company
will be entitled to one vote for each share of Common Stock registered in his
name on the record date. The presence, in person or by proxy, of a majority of
all of the outstanding shares of Common Stock constitutes a quorum at the
Special Meeting. Proxies relating to "street name" shares that are returned to
the Company but marked by brokers as "not voted" will be treated as shares
present for purposes of determining the presence of a quorum on all matters but
will not be treated as shares entitled to vote on the matter as to which
authority to vote is (908)
879-2722.withheld by the broker ("broker non-votes"). The election
of directors requires a plurality vote of those shares voted at the Special
Meeting with respect to the election of directors. "Plurality" means that the
individuals who receive the largest number of votes cast "FOR" are elected as
directors. Consequently, any shares not voted "FOR" a particular nominee
(whether as a result of a direction to withhold authority or a broker non-vote)
will not be counted in such nominee's favor. All other matters to be voted on
will be decided by the affirmative vote of a majority of the shares present or
represented at the Special Meeting and entitled to vote. On any such matter, an
abstention will have the same effect as a negative vote, but because shares held
by brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, a broker non-vote will have no effect on the vote.

SHARE OWNERSHIP

The following table sets forth certain information as of October 21, 2005
(on which date 139,106,672 shares of the Company's Common Stock were
outstanding), with respect to (i) those persons or groups known to the Company
to beneficially own more than 5% of the Company's Common Stock, (ii) each
director and nominee, (iii) each executive officer whose compensation exceeded
$100,000 in fiscal 2005, and (iv) all directors and executive officers as a
group:

Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class
---------------- ---------------------- ----------

Ivano Angelastri 1,150,000 (2) 0.83%

Mark Chroscielewski - -
Senior Vice President
Business Development

Steven L. Gray 708,100 0.51%

Steven W. Jagels 622,083 (3) 0.45%
Senior Vice President
Information Systems

Joerg H. Klaube - -
Senior Vice President
Secretary and
Chief Financial Officer

Steven D. Rudnik 2,827,709 (4) 2.01%
Chief Executive Officer
President

Joseph J. Tomasek - -

Address of all persons above: c/o the Company.

All Directors and Executive Officers 5,307,892 3.76%
as a Group (7 persons)

Christoph Marti 10,300,000 (5) 7.13%
Kuerzestrasse 25, CH-4562 Biberist, Switzerland

Victor Cilli 13,666,666 (6) 9.32%
61 E. Central Ave., Maywood, N.J. 07607

James Morton 7,848,700 (7) 5.55%

* The Company also has issued and outstanding as of October 21, 2005, 305,666
shares of its Senior Convertible Preferred Stock, with concentrations in excess
of 10% for one or more of the holders of such stock, however, none of such
shares bear any voting rights.

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

(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of October 21, 2005. For purposes of
computing the percentage of outstanding shares of Common Stock held by
each person or group of persons named above, any security which such
person or persons has or have the right to acquire within such date is
deemed to be outstanding but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Except
as indicated in the footnote to this table and pursuant to applicable
community property laws, the Company believes based on information
supplied by such persons, that the persons named in this table have sole
voting and investment power with respect to all shares of Common Stock
which they beneficially own.

(2) Includes 425,000 shares and 125,000 warrants held by affiliates.

(3) Includes options to acquire 602,083 shares.

(4) Includes options to acquire 1,244,375 shares and warrants for 250,000
shares.

(5) Includes warrants for 5,300,000 shares.

(6) Includes 4,583,333 shares held by affiliates and warrants for 7,583,333
shares also held by affiliates.

(7) Includes warrants for 1,666,667 shares and 2,542,777 shares and warrants
for 688,000 shares held by affiliates.

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES

The Company's Certificate of Incorporation, as amended, and Restated Bylaws
provide for the Company's business to be managed by or under the direction of
the Board of Directors. Under the Company's Certificate of Incorporation, as
amended and Restated Bylaws, the number of directors is fixed from time to time
by the Board of Directors. The Board of Directors is currently fixed at a
minimum of four (4) and a maximum of nine (9). There are currently four members
on the Board of Directors. Pursuant to the Company's Certificate of
Incorporation, as amended, and Restated Bylaws, the Board of Directors, on
October 11, 2005, voted to nominate Steven D. Rudnik, Ivano Angelastri, Steven
Gray and Joseph J. Tomasek as Directors for a one (1) year term until the 2006
Annual Meeting.

The names and ages of all executive officers, directors and significant
employees of the Company are as follows:

Name Positions Term Served (Expires)
- -------- --------------- ---------------------------------

Steven D. Rudnik Director (Chairman Feb. 11, 2000 (2004)
of the Board)
President, Chief Executive Jan. 8, 1999 (March 2, 2004)
Officer

Mark Chroscielewski Sr. Vice President Jan.2, 2003
Business Development

Joerg H. Klaube Sr. Vice President, Secretary, Jul. 31, 1997 (April 15, 2004)
Chief Financial Officer

Steven W. Jagels Sr. Vice President Feb. 18, 1998

Steven L. Gray Director May 18, 2000 (2004)

Ivano Angelastri Director May 18, 2000 (2004)

Joseph J. Tomasek Director Feb. 11, 1999 (2004)

There are no family relationships among the Company's Officers and Directors.

Steven D. Rudnik, Age 46 - Chairman and Chief Executive Officer,
President. Mr. Rudnik personally developed many of the copyrighted software
products offered by Magnitude Information Systems. Mr. Rudnik co-founded Rolina
Corporation in 1996. Prior to 1996, Mr. Rudnik had executive level positions in
software product development and software company operations. In 1983, Mr.
Rudnik joined Randall-Helms International, Inc. Over the next 13 years, he
conceived and developed four independent families of stock market modeling
software products aimed at the worldwide "large cap" institutional investor
market. These product families generated over US$ 25 million in sales from more
than 400 clients in 23 countries. Mr. Rudnik was Executive Vice President and
Partner at Randall-Helms when it was sold in 1995.

Mark Chroscielewski, Age 47 - Senior Vice President Business Development.
Since joining the Company in January 2003 Mark Chroscielewski manages our
strategic alliances and develops new marketing strategies to present our
products to both the productivity and ergonomic segments of the corporate
marketplace. Prior to joining our Company, Mr. Chroscielewski was the principal
of a consulting firm, specializing in the development of proprietary data mining
software, modeled for corporate customers seeking an enterprise-wide application
for their customer relations management programs. This software was utilized by
Columbia/HCA, the largest healthcare enterprise in the world, to support its
healthcare claims protocol. Mark's experience includes the co-founding, in 1988,
of a multi-national software marketing enterprise, CrossZ International. As
Chairman and Chief Executive Officer, Mr. Chroscielewski grew this company to 80
plus employees, established international operations, sold product to many
fortune 100 companies including American Express, Philip Morris and MCI while
raising approximately $37 million in equity capital to fund its business and
growth. After participating in its initial public offering in 1997, CrossZ
Software was sold to an Italian consortium, Intelitec in 2002, and is now now
called CrossZ Solutions SA

Joerg H. Klaube, Age 64 - Chief Financial Officer, Senior Vice President.
Joined Magnitude, Inc. in December 1994. From 1993 to 1994 he was Vice President
Administration for Comar Technologies Inc., a computer retail firm, and from
1983 to 1993 Chief Financial Officer for Unitronix Corporation, a publicly
traded software design and computer marketing firm. Prior to that, Mr. .Klaube
was employed for 16 years with Siemens Corp., the US subsidiary of Siemens AG,
where he served most recently as Director of Business Administration for its
Telecommunications Division. He graduated from the Banking School in Berlin,
Germany, and holds an MBA degree from Rutgers University.

Steven W. Jagels, Age 46 - Senior Vice President Information Systems. Mr.
Jagels joined Magnitude in February 1998. Mr. Jagels has 20 years of software
development experience in such diverse disciplines as clinical laboratory

analysis, stock market modeling, artificial intelligence, and retail business
applications. Mr. Jagels also has experience in the software industry, including
software management, project development, systems analysis, and training. Prior
to his software career, Mr. Jagels had five years experience in biomedical
engineering and management.

Steven L. Gray, Age 57 - Director. Mr. Gray was elected to serve on the
Board on May 18, 2000. He is a resident of Venice, Florida. For the past six
years, Mr. Gray has served as the President and is a shareholder of a private
Florida corporation engaged in the retail distribution of nutritional products.
This corporation has a customer base in nine countries. Prior to that time, Mr.
Gray ran his own real estate development company, specializing in the design and
construction of multi-family housing.

Ivano Angelastri, Age 43 - Director. Mr. Angelastri was elected to serve
on the Board on May 18, 2000. He is a resident of Zurich, Switzerland. Mr.
Angelastri has been active in portfolio management services for many years.
Since January 24, 2001 he is a director of T&T Vermoegensverwaltungs AG, Zurich,
Switzerland, whose main business is asset management and financial consulting
services for private and institutional clients. Prior to his current position,
Mr. Angelastri served as Managing Director of Megan Services where he performed
financial advisory and portfolio management services.

Joseph J. Tomasek, Age 58 - Director. Mr. Tomasek was appointed a director
in February 2000. He has been engaged in the private practice of corporate and
securities law in his own law firm for the last ten years. Mr. Tomasek was
appointed to serve as general counsel for the Company in 1999. In addition to
his work with the Company, Mr. Tomasek represents several other clients in the
area of corporate law.

EXECUTIVE COMPENSATION

The following table sets forth all compensation and executive capacities for the
fiscal years ended December 31, 2004, December 31, 2003, and December 31, 2002,
for the chief executive officer and for each executive officer whose aggregate
cash remuneration exceeded $100,000, for all executive officers as a group, and
for certain other most highly compensated employees:

- -----------------------------------------------------------------------------------------------------------------------------------
Other Restricted Securities All
Name and Annual Stock Underlying Other
Principal Position Year Salary ($) Bonus ($) Compensation($) Awards ($) Options ($) Compens.($)
------------------ ---- ---------- --------- --------------- ---------- ----------- -----------
(1) (2) (3) (4) (5)
- -----------------------------------------------------------------------------------------------------------------------------------

Steven D. Rudnik 2004 133,333(6) 13,364 36,000 - 3,250
Chief Executive Officer, 2003 133,333(7) - 15,262 27,000 - 3,250
President 2002 133,333(8) - 12,560 42,000 - 3,250

- ---------------------------------------------------------------------------------------------------------------------------------
Mark Chroscielewski 2004 125,000 - 6,000 - - 8,400
Sr. Vice President 2003 125,000 - 6,000 - - 8,400
Business Development 2002 - - - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Joerg H. Klaube 2004 125,000 - 11,404 36,000 - 1,710
Sr. Vice President, 2003 125,000 - 11,404 67,000 - 1,710
CFO 2002 125,000 - 9,087 42,000 - 1,710

- ---------------------------------------------------------------------------------------------------------------------------------
Steven W. Jagels 2004 108,333 - 9,000 - - 1,940
Sr. Vice President 2003 108,333 - 11,083 - - 1,940
Information Systems 2002 108,333 - 9,000 - - -

- ---------------------------------------------------------------------------------------------------------------------------------
All executive officers
As a group (4 persons) 2004 491,666 - 39,768 72,000 - 15,300
- ---------------------------------------------------------------------------------------------------------------------------------

- -----------------------
(1) The value of other non-cash compensation, except for the items listed under
(2), (3), (4) and (5), that was extended to or paid for individuals named
above did not exceed 10% of the aggregate cash compensation paid to such
individual, or to all executive officers as a group.
(2) Consists of automobile expenses allowances and vacation pay-out.
(3) During 2004, the Board of Directors approved stock awards of 300,000
restricted shares to Rudnik and of 300,000 restricted shares to Klaube.
During 2003, the Board of Directors approved stock awards of 300,000
restricted shares to Rudnik and of 800,000 restricted shares to Klaube.
During 2002, the Board of Directors approved stock awards of 300,000
restricted shares each to Rudnik and Klaube. These shares are listed in the
table above at the market price for unrestricted stock quoted at the time
of the award. The number and value of the aggregate restricted stock
holdings at the end of fiscal year 2003 (using market prices of
unrestricted stock at the end of the fiscal year) are as follows: S.Rudnik:
4,744,445 shares - $616,778; J.Klaube: 1,400,000 shares - $182,000. The
valuation of stock awards and end-of-year holdings is in conformity with
guidelines set forth for SEC Regulation S-B Item 402 (b)(2)(iv). All such
shares are fully vested. The Company does not currently foresee to pay
dividends on any of these shares.
(4) .See table for "Stock Options" below.
(5) Consists of premiums for health and personal life insurance.
(6) During 2004, the Board of Directors approved the issuance of 16,667 shares
of Series E Senior Convertible Stock, since converted into 1,666,667
restricted shares, and warrants for the purchase of 833,333 common shares,
exercisable during three years at $0.15/share, in lieu of $100,000 cash
salary; the stated salary figure includes such common shares, valued at the
nominal $100,000 which they replaced.
(7) During 2003, the Board of Directors approved the issuance of 1,000,000
restricted shares in lieu of $100,000 cash salary; the stated salary figure
includes such shares, valued at the nominal $100,000 which they replaced.
(8) During 2002, the Board of Directors approved the issuance of 1,100,000
restricted shares in lieu of $110,000 cash salary; the stated salary figure
includes such shares, valued at the nominal $110,000 which they replaced.
(9) The value of other non-cash compensation, except for the items listed under
(2), (3), (4) and (5), that was extended to or paid for individuals named
above did not exceed 10% of the aggregate cash compensation paid to such
individual, or to all executive officers as a group.

STOCK OPTION GRANTS IN LAST FISCAL YEAR:

The Company did not grant any stock options to any officer, director
or employee of the Company during fiscal year 2004 under the Company's 1997
Stock Option Plan, the Company's 2000 Stock Incentive Plan, or outside of any
plan nor did any officer, director or employee of the Company exercise any
previously granted stock options or warrants during this period.

In May, 2005, the Company issued 1,000,000 shares of common stock
and 1,000,000 warrants, exercisable at $0.15 per share over three years, to our
president and chief executive officer in lieu of $100,000 cash of his base
salary for 2005.

Employment Agreements

In April 2002, the Company entered into an employment agreement with Steven D.
Rudnik, its current President and Chief Executive Officer, to serve as President
and Chief Executive Officer of the Company for a period of five years, replacing
an earlier employment agreement dated February 1998, as amended. Base salary
under the agreement is $133,333 per year with predetermined increases effective
upon the Company achieving certain revenue goals. The agreement also calls for
the grant of certain stock awards and incentive and non-statutory stock options
and eligibility for the Company's benefit programs. The Company will also
provide reimbursement of ordinary and necessary business expenses and a monthly
car allowance. The agreement provides for severance compensation to be
determined pursuant to a formula established therein, payable to the officer if
the employment agreement is terminated or is not renewed by the Company. A
non-competition/non-solicitation restriction applies for 24 months after
termination of employment. Proposal Three of this proxy statement seeks
shareholder approval to a proposed amendment to Mr. Rudnik's employment
agreement at page 18 of this proxy statement.

In April 2002, the Company entered into an employment agreement with Joerg H.
Klaube, its current Senior Vice President and Chief Financial Officer, to serve
in that capacity for a period of five years, replacing an earlier employment
agreement dated April 1996, as amended. Base salary under the agreement is
$125,000 per year with predetermined increases effective upon the Company
achieving certain revenue goals. The agreement also calls for the grant of
certain stock awards and incentive and non-statutory stock options and
eligibility for the Company's benefit programs. The Company will also provide
reimbursement of ordinary and necessary business expenses and a monthly car
allowance. The agreement provides for severance compensation to be determined
pursuant to a formula established therein, payable to the officer if the
employment agreement is terminated or is not renewed by the Company. A non-
competition/non-solicitation restriction applies for 24 months after termination
of employment.

In April 2002, the Company entered into an employment agreement with Steven W.
Jagels, its current Senior Vice President Information Technology, to serve in
that capacity for a period of five years. Base salary under the agreement is
$108,333 per year with predetermined increases effective upon the Company
achieving certain revenue goals. The agreement also calls for the grant of
certain stock awards and incentive and non-statutory stock options and
eligibility for the Company's benefit programs. The Company will also provide
reimbursement of ordinary and necessary business expenses and a monthly car
allowance. The agreement provides for severance compensation to be determined
pursuant to a formula established therein, payable to the officer if the
employment agreement is terminated or is not renewed by the Company. A
non-competition/non-solicitation restriction applies for 24 months after
termination of employment.

COMPENSATION OF DIRECTORS:

Outside directors are awarded stock options for 40,000 shares each upon
commencement of their office. In addition, the three incumbent outside directors
have been granted, in 2004, restricted stock awards for services rendered, as
follows: I. Angelastri 300,000 common shares; S. Gray 450,000 common shares, J.
Tomasek 800,000 common shares.

During 2004, one outside director of the Company who also serves as the
Company's general and securities counsel, was paid an aggregate $164,184 for
legal services. One other outside director was paid $10,400 for services
performed.

BOARD MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

Meeting Attendance. During the fiscal year ended December 31, 2004, there
were 13 meetings of the Board of Directors. The Board of Directors has one
standing committee, the Audit Committee.

AUDIT COMMITTEE

The Company has appointed an Audit Committee in accordance with the
provisions of the Sarbanes-Oxley Act of 2002, comprised of two non-employee
directors, Steven Gray and Ivano Angelastri, who meet the definition of
independent pursuant to the rules of the SEC and the rules applicable to
companies whose securities are traded on the Electronic Bulletin Board, OTC
market maintained by the National Association of Securities Dealers, Inc. Steven
Gray meets the definition of an Audit Committee Financial Expert as such term is
used in the rules and regulations of the SEC. The Board of Directors has adopted
a written charter, a copy of which is included in this proxy statement as
Exhibit D. The Audit Committee's responsibilities include: overseeing the
integrity of the Company's financial statements, the Company's compliance with
legal and regulatory requirements, the independent auditor's qualifications and
independence, the performance of the Company's independent auditors and other
matters as may be assigned by the Board of Directors. The Audit Committee did
not issue any reports during fiscal year 2004.

The Board of Directors performed the functions of the compensation
committee, reviewing, negotiating and approving the proposed Amendment to
Employment Agreement of Steven D. Rudnik, our President and Chief Executive
Officer, subject to the approval of Company stockholders, and is discussed in
this proxy statement under Proposal Three found at page 18 below. In addition,
the Board of Directors performed the functions of a nominating committee, and
each of our directors, Steven D. Rudnik, Steven Gray, Ivano Angelastri and
Joseph Tomasek participates in the consideration of director nominees. The Board
of Directors has not yet appointed a nominating committee nor has it adopted a
charter for such a committee prior to the date hereof. The Board of Directors
believes that it can serve and perform the functions of a nominating committee,
to wit, selecting and recommending individual nominees for election to the
Board, as it is presently constituted. Board members Steven Gray and Ivano
Angelastri, serving in their capacities as Board members performing the
functions of a nominating committee, are deemed independent under the rules
applicable to companies whose securities are traded on the Electronic Bulletin
Board, OTC market maintained by the National Association of Securities Dealers,
Inc. The Board of Directors has not adopted a policy with regard to the
consideration of any director candidates recommended by stockholders since prior
to the date of this proxy statement, no stockholder has ever recommended a
director candidate to management or to the Board of Directors.

Independence of Directors
- -------------------------

The Company's common stock is listed for trading on the Electronic bulletin
Board and follows the NASD rules in determining whether a director is
independent. The Board of Directors also consults with counsel to ensure that
the Board's determinations are consistent with those rules and relevant
securities and other laws regarding director independence. Consistent with these
considerations, the Board of Directors has affirmatively determined that Steven
Gray and Ivano Angelastri will be independent directors for the ensuing year.
The remaining directors are not independent because they are either employed by
the Company or are paid over $60,000 per year for services rendered to the
Company.

Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers to file with the SEC initial reports of ownership and
changes in ownership of our Common Stock during the fiscal year ended December
31, 2004. We believe that our officers and directors complied with all these
filing requirements during the fiscal year.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 31, 2000, the Company and its President and Chief Executive
Officer agreed to convert a current liability payable to him in the amount of
$374,890 into a Company obligation, of which $100,000 was subsequently
classified as due on demand, which was repaid in April 2002, with the remaining
balance of $274,890 maturing July 1, 2002. On February 19, 2002, the maturity of
the term portion of $274,890 was extended to July 2003, and the board of
directors of the Company approved a change in the conversion option towards a
rate of $0.10 per share. In January 2004, $175,000 was repaid and the maturity
of the remaining open balance of $99,890 was extended to January, 2005. This
amount is currently open and unpaid and payable on demand.

In January 2004, the Company and its President and Chief Executive Officer
agreed to convert most of his base salary for the remainder of the year 2004
into 16,667 shares of convertible preferred stock, convertible into 1,666,667
restricted common shares, and 833,333 warrants, exercisable during three years
at the price of $0.15 per share, in lieu of $100,000 cash. The Company also
repaid $239,088 notes payable due to this officer.

During the first quarter in 2004, an outside director of the Company was
awarded a stock grant for 150,000 restricted common shares, for services
rendered. The same director exercised an option for 250,000 restricted common
shares at the price of $0.01 per share which option was acquired by him in a
private transaction with an unrelated party.

During the third quarter, five directors and officers of the Company
received a total 1,500,000 restricted common shares as remuneration for services
as members of the board of directors. One outside director who also serves as
the legal and securities counsel of the Company received 500,000 restricted
common shares as compensation for his commitment and agreement to continue to
invoice the Company for legal services at a reduced rate, in connection with
legal services rendered during fiscal year 2004.

During the third quarter the Company's chief executive officer extended
short term loans aggregating $100,000 to the Company. These loans carried
interest at the rate of 10% per year and were subject to a loan origination fee
of 4%. At December 31, 2004, all such loans had been repaid.

Shareholder Communications with the Board

Shareholders wishing to communicate with members of the Board of Directors
or with the audit committee may send an email to shareholder@magnitude.com,
indicating to which director or directors the email should be directed.
Alternatively, shareholders may send a letter to the Secretary of the Company
with instructions as to which director(s) is to receive the communication. The
Company's Secretary will forward the written communication to each member of the
Board of Directors identified by the security holder or, if no individual
director is identified, to all members of the Board of Directors.

Director Attendance at Special and Annual Meetings of Shareholders

The Company's policy is to request that each director attend the Company's
all annual and special meetings of shareholders. All of the Company's directors
attended the last meeting of shareholders in 2000.

MATTERS TO BE BROUGHT BEFORE THE MEETING

PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors is currently comprised of four (4) members whose
terms expire at the next annual meeting of shareholders or until their
successors are duly elected and qualified.

We have nominated Steven D. Rudnik, Steven L. Gray, Ivano Angelastri and
Joseph J. Tomasek for terms that will expire at our next annual meeting in the
year 2006.

Unless you indicate that your vote is withheld, the proxies
solicited by the Board of Directors will be voted FOR the election of the
nominees. In case any of the nominees become unavailable for election to the
Board of Directors, an event which is not anticipated, the persons named as
proxies, or their substitutes, shall have full discretion and authority to vote
or refrain from voting for any other candidate in accordance with their
judgment.

The nominees, their ages, the year in which each began serving as a
director, and their business experience is set forth above at page 5 of this
proxy statement

PROPOSAL TWO
INCREASE IN AUTHORIZED COMMON SHARES
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION

On October 11, 2005 the Board of Directors unanimously approved an
amendment to the Company's Certificate of Incorporation to permit the Company to
issue up to 300,000,000 shares of common stock. The resolution was as follows:

"RESOLVED, that the Company's Certificate of Incorporation shall be amended
to increase the common shares that the Company is authorized to issue from
200,000,000 to 300,000,000 shares."

The Board directed that the amendment be voted on by stockholders and a
copy of the proposed Amendment to the Company's certificate of incorporation is
included in this proxy statement as Exhibit A.

PURPOSE AND APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK

The Company's Certificate of Incorporation, as amended, currently authorizeauthorizes the
issuance of 100,000,000200,000,000 shares of Common Stock. The Company's Board of Directors
has unanimously adopted, subject to stockholder approval, an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 100,000,000200,000,000 shares to 200,000,000300,000,000
shares. As of May 14, 2004,October 21, 2005, the Company has 79,624,641139,106,672 shares of issued and
outstanding Common Stock, outstanding options to purchase 12,355,8087,448,074 shares of
Common Stock as well as 19,453,23847,519,350 outstanding common stock purchase warrants
and convertible preferred stock, convertible into 35,096,40013,004,805 shares of Common
Stock. Of the 13,004,805 common shares underlying our outstanding convertible
preferred stock, 11,247,607 are only issueable in March, 2006, upon the
automatic conversion of the 112,476 Series E preferred shares issued to our
officers and directors in exchange for their surrender and cancellation of
11,247,607 common shares in September, 2005, to provide sufficient shares to
accommodate the Company's current private placement.

In September, 2005, our officers and directors surrendered for cancellation
4,507,709 stock options, 2,283,916 common stock purchase warrants and 11,247,607
common shares in order to provide sufficient authorized common shares to
accommodate the Company's current private placement. We replaced the surrendered
and cancelled common shares with shares of our Series E preferred stock which
are automatically convertible in March, 2006, into 11,247,607 common shares, the
amount of common shares equal to those surrendered. We also intend to reissue
the 4,507,709 stock options, and reserve and set aside 4,507,709 common shares
underlying these stock options, and to reissue 2,281,916 warrants, and reserve
and set aside 2,281,916 common shares underlying these warrants, to our officers
and directors to replace their previously canceled stock options, warrants and
the common shares underlying these securities following adoption by the
shareholders of the proposed amendment.

Each share of the Company's Common Stock entitles the holder to one vote on each
matter submitted to a vote of stockholders. There is no cumulative voting. The
holders of the Company's Common Stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. Holders of the Company's
Common Stock have no preemptive, conversion or other subscription rights. There
are no redemption or sinking fund provisions available to the Company's Common
Stock.

313

The general purpose and effect of the amendment to the Company's Certificate of
Incorporation is to authorize 100,000,000 additional shares of Common Stock. The
Board of Directors has approved this amendment to provide additional common
sharesshares: to accommodate outstanding options, warrants and convertible securitiessecurities;
to provide sufficient common shares necessary to replace the 4,507,709 stock
options and 2,281,916 warrants surrendered by our officers and directors and
which stock options and warrants will have terms and provisions identical to
those surrendered, and will have an equal amount of underlying common shares as
well asthose surrendered; to haveprovide the additional11,247,607 common shares necessary to replace
those previously surrendered for cancellation by our officers and directors
which will accommodate the automatic conversion in March, 2006 of Common Stock available for general
corporate purposes, including acquisitions, equity financings,the Series E
preferred stock dividends
or stock splits.issued to our officers and directors, and; to accommodate the
contemplated issuance of up to 8,333,332 common shares in our current private
placement.

At the present time, your Board of Directors intends to utilize a portionan aggregate
18,037,232 of the new common shares to be authorized approximately 20 million shares, to raise
approximately $1,000,000 of equity financing in its current private placement
for European investors. We are offering these common shares through our European
placement agents. We have agreed to pay our placement agents a cash commission
of 10% ofunderlie the gross proceeds raised in our private placement. The private
placement is offering Company units for the price of $.10 per unit, with each
unit comprised of 1 common share and 14,507,709
stock options, 2,281,916 common stock purchase warrant. Each
warrant is exercisable at any time duringwarrants and the three year period112,476 Series E
preferred shares we will reissue or issue to replace those securities previously
surrendered by our officers and directors for cancellation, following issuance at the
exercise price of $.15. Alladoption of the subject amendment. Apart from utilizing these new common shares
in connection with the replacement of stock options, warrants and warrants offeredcommon shares
for our officers and to be offereddirectors and except as intended for issuance in our
private placement will not be registered under the
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or pursuant to an applicable exemption from such
registration requirements. We intend to utilize the investment funds received in
this private placement for general corporate purposes. Apart from our intention
to use and issue these approximate 20,000,000 shares in ourcurrent private placement the Board of Directors has no other current plan,
arrangement or proposal to issue any additional shares of Common Stock. However,
you should know that if the Board of Directors deems it to be in the best
interests of the Company and the stockholders to issue additional shares of
Common Stock in the future from authorized shares, the Board of Directors
generally will not seek further authorization by vote of the Stockholders,
unless such authorization is otherwise required by law or regulations.

OUR OUTSTANDING PREFERRED STOCK

Our Outstanding Series A, Series C and Series DE Preferred StockStock.

We have issued an aggregate (1) 29,300 shares of Series aA Preferred Stock, (2)
100,000 shares of Series C Preferred Stock and (3) 63,890112,476 shares of Series DE
Preferred Stock, all of whichStock. The Series A and C preferred shares are presently convertible
into an aggregate
1,757,198 common shares.

Our Outstandingshares while the 112,476 Series E Preferredpreferred shares are
automatically convertible into 11,247,607 common shares in March, 2006.

TERMS OF OUR SERIES A STOCK

The Series A Stock In addition, wehas no voting rights and their holders do not have issued,a right to
cast a vote on shareholder matters. The holders of Series A Stock are entitled
to receive semi-Special cumulative dividends before any dividends are declared
and paid upon the Common Stock, but on par with the holders of any Series B
Stock and Series C Stock, calculated against their liquidation price of $5.00
per share at the rate of 7% Specially during the period November, 2003, through March 31,
2004, an aggregate 333,392.02 sharesfirst year of our Series E Senior Convertible
Preferred Stock (the "Series E Stock")their issuance,
increasing thereafter in increments of 1/2 of 1% per year for the next six years
when the interest rate is fixed at 10% Specially. In the event of a liquidation,
dissolution or winding up of the affairs of Magnitude and warrantsafter payment of its
debts and liabilities, the holders are entitled to purchase 16,669,599
sharesbe paid out of common stock during 2003 and 2004 in the transactions listed below. In
allremaining
assets a liquidation price of these transactions, we issued "units" comprised of 1$5.00 per share of Series E

4
A Stock, on an equal
basis with the holders of any Series B Stock and 50 warrants. Each of these warrants, included inSeries C Stock.

Magnitude has the list below, are
exercisable during the two and one half-year period beginning 6 months after
issuance at the exercise price of $.15. Currently, 294,632 of these Series E
shares and the 14,731,600 warrants issued with these preferred shares are not
yet convertibleright to redeem or exercisable: see, the section "TERMS OF THE SERIES E STOCK",
below:

1. Private Placement. Commencing in November, 2003 and terminating in
February, 2004, we conducted a private placement and issued 287,827 units,
comprised of 287,827 shares of its Series E Stock and 14,391,350 warrants, to 57
foreign-based and U.S. accredited investors at the subscription price of $6.00
per unit, raising gross proceeds of approximately $1,726,962 and out of which
the Company paid aggregate finder's fees to its Swiss and U.S. placement agents
of $86,396. Of this amount, we paid one of our Swiss placement agents, Premium
Strategy Partners, $24,396 and our other Swiss placement agent, Mr. Ulrich
Schuerch, a finder's fee of $13,200. As a result of his continuing investments
in our securities, Mr. Ulrich Schuerch of Switzerland currently owns in excess
of 5% of our outstanding common shares: see, the table under "SECURITY
OWNERSHIP", below. We paid our U.S. placement agent, vFinance Investments of
Florida, a finder's fee of $48,800.

2. Debt Conversion. In November and December, 2003, we issued
approximately 19,593 units, comprised of 19,593 shares of Series E Stock and
979,666 warrants, to two creditors of the Company in payment of an aggregate
$117,560 in loans to the Company. One of these creditors, Steven L. Gray, is an
outside director of the Company, and received 17,926.67 units, comprised of
17,926.67 shares of Series E Stock and 896,334 warrants, as payment for
outstanding loans to the Company in the aggregate amount of $107,560. The
17,926.67 units paid to Mr. Gray, valued at the private placement unit price of
$6.00 per unit, are approximately equivalent to the $107,560 in outstanding
Company loans repaid.

3. Stock Issued in Lieu of Salary. In January, 2004, we issued
approximately 16,667 units, comprised of 16,667 shares of Series E Stock and
833,333 warrants, to Steven D. Rudnik, our President, Chief Executive Officer
and a Director, in lieu of paying him $100,000 cash of his salary for fiscal
year 2004. The 16,667 units paid to Mr. Rudnik, valued at the private placement
unit price of $6.00 per unit, are approximately equivalent to the $100,000 in
salary for which these units were issued; see, the table under the section
"SECURITY OWNERSHIP", below.

4. Stock Issued for Legal Services. In December, 2004, we issued 5,805
units, comprised of 5,805 shares of Series E Stock and 290,250 warrants, to
Joseph J. Tomasek, an outside director and our general counsel, for providing
legal services at a discount to the Company during fiscal years 2002 and 2003.
The Company has valued and expensed the 5,805 units issued to Mr. Tomasek at
$43,225, the fair value of these securities, in the Company's financial
statements for the fiscal year ended December 31, 2003. Please see the table
under the section "SECURITY OWNERSHIP", below.

5. Stock Issued for Consulting Services. Beginning in January and
continuing through March, 2004, we issued an aggregate 3,500 units, comprised of
3,500 shares of Series E Stock and 175,000 warrants, to a consultant for
services rendered to the Company pursuant to the terms of a consulting
agreement.

As of the date of this consent solicitation, we have outstanding 79,624,641
common shares, currently exercisable stock options to purchase 12,355,808 common
shares, warrants to purchase 19,453,238 common shares of which 4,721,638 are
also currently exercisable, and convertible preferred stock, presently
convertible into 5,633,200 common shares. These outstanding securities require
an authorized amount of 102,335,287 common shares.

As the remaining 294,632 shares of our outstanding Series E Stock become
convertible and the 14,731,600 warrants issued with these shares become
exercisable, we will need an additional 44,194,800 common shares authorized.
Accordingly, if our shareholders approve the amendment to our Certificate of
Incorporation to increase our authorized common shares from 100,000,000 to
200,000,000, we will immediately utilize an aggregate 46,530,087 common shares
to cover our existing common share requirements: the 2,335,287 common shares
required to cover our presently exercisable and convertible securities, and;
44,194,800 common shares to cover future conversions and exercisesbuy back part or all of the Series EA Stock
three years after their issuance by paying to the holders the liquidation price
($5.00 per share), any accumulated but unpaid dividends and a payment (a "call
premium") equal to 15% of the liquidation price. Holders of the Series A Stock
can convert their shares into Magnitude Common stock at a conversion rate equal
to 150% of the "market price" of Magnitude's Common Stock at the time of
conversion. "Market price" is based upon the average bid and asked prices for
Magnitude's Common Stock as quoted by the then stock exchange during the 20
consecutive trading day period immediately preceding the conversion.

TERMS OF OUR SERIES C STOCK

The Series C Stock has no voting rights and their holders do not have a right to
cast a vote on shareholder matters. The holders of Series C Stock are entitled
to receive monthly cumulative dividends before any dividends are declared and
paid upon the Common Stock, but on par with the holders of any Series A Stock
and Series B Stock, calculated against their liquidation price of $9.00 per
share at the warrants issuedrate of 7% Specially. In the event of a liquidation, dissolution or
winding up of the affairs of Magnitude and after payment of its debts and
liabilities, the holders are entitled to be paid out of the remaining assets a
liquidation price of $9.00 per share of Series C Stock, on an equal basis with
them.

Of the 100,000,000 additional commonholders of any Series A Stock and Series B Stock. Magnitude has the right to
redeem or buy back part or all of the Series C Stock three years after their
issuance by paying to the holders the liquidation price ($9.00 per share), any
accumulated but unpaid dividends and a payment (a "call premium") equal to 10%
of the liquidation price. Holders of the Series C Stock can convert their shares
we wish to authorize by amendment,
46,530,087 will be used to cover conversions and exercisesinto Magnitude Common Stock on the basis of our outstanding
securities while approximately 20,000,00010 shares of these newly authorized common
shares will be used in our private placement, leaving a balanceCommon stock for one
share of 33,469,913
common shares available for future issuances.Series C Stock at any time.

TERMS OF OUR SERIES E STOCK

As stated above, we have 333,392.02112,476 shares of Series E Stock currently
outstanding. Our shares of Series E Stock are automatically convertible into 100
Company common shares six months after their issuance, and will convert into an
aggregate 33,339,20011,247,607 common shares. The Series E Stock accrues cumulative
dividends at the rate of 6% per annum on the stated value of $6 per share,the shares, payable
in cash upon their automatic conversion date and when declared by the Board of
Directors. The Series E Stock has priority in dividend payments over all of the
Company's common stock and all of the other series of Company preferred shares
outstanding. In the event of liquidation, the Series E Stock has rights to be
paid out of the net assets of the Company on a par, prorated basis with all of
the other series of outstanding preferred shares. The Company's outstanding
preferred stock have a liquidation preference and priority over the Company's
outstanding common stock. The holders of the Series E stock as well as the
holders of all other series of outstanding preferred shares, have no voting
rights.

The officers and directors who surrendered an aggregate 11,247,607 common shares
and received 112,476 Series E Stock in exchange, waived their rights to receive
any dividends associated with these shares of preferred stock.

1. Private Placements. Commencing in October,2004 and terminating in
April, 2005, we conducted a private placement and issued 13,970,000 units,
comprised of 14,220,000 common shares and 14,220,000 warrants, to 24
foreign-based and U.S. accredited investors at the subscription price of $0.10
per unit, raising gross proceeds of $1,422,000 and out of which the Company paid
aggregate fees of $101,000 to its Swiss and U.S. placement agents. Of this

amount, we paid one of our Swiss placement agents, S&I Consulting, $3,000 and
our other Swiss placement agent, Mr. Nicholas Rogivue, a finder's fee of
$20,000, and our U.S. placement agent vFinance, Inc., a placement fee of
$78,000. Commencing in July, 2005 and continuing through the date hereof, we are
engaged in our current private placement and have issued and have irrevocable
subscription agreements to issue an aggregate 9,083,333 units, comprised of
9,083,333 common shares and 9,083,333 warrants, to 6 foreign-based and U.S.
accredited investors at the subscription price of $0.06 per unit, raising gross
proceeds of approximately $545,000 and out of which the Company will pay
aggregate finder's fees to its Swiss placement agents of $12,000. We expect to
raise an additional approximate $250,000 in gross proceeds in our current
private placement upon these same terms which shall result in the issuance of an
additional 4,166,666 units, comprised of 4,166,666 common shares and 4,166,666
warrants. As a result of their continuing investments in our securities, Messrs.
Christoph Marti of Switzerland and Victor Cilli and James Morton of the U.S.,
each currently own in excess of 5% of our outstanding common shares: see, the
table under "SECURITY OWNERSHIP", below.

2. Stock Options, Warrants and Common Shares Surrendered for Cancellation.
In September, 2005, our officers and directors surrendered an aggregate
4,507,709 stock options, 2,281,916 common stock purchase warrants and 11,247,607
common shares in order to accommodate the Company's need to have available
common shares for its current private placement. We issued 112,476 shares of our
Series E convertible preferred shares to our officers and directors in exchange
for the cancellation of their aggregate 11,247,607 common shares. These Series E
preferred shares will automatically convert in March, 2006, into an amount of
common shares equal to those common shares. Following the adoption of the
Amendment to our Certificate of Incorporation, increasing our authorized common
shares from 200,000,000 to 300,000,000, we intend to replace all of the stock
options and common stock purchase warrants surrendered by our officers and
directors, without any change, modification or amendment of any of their terms
or provisions. In addition, we will authorize the issuance of the 11,247,607
common shares to underlie the 112,476 Series E preferred shares issued to our
officers and directors which are necessary to accommodate the automatic
conversion of these preferred shares in March, 2006.

3. Stock Issued in Lieu of Salary. In May, 2005, we issued
1,000,000 units, comprised of 1,000,000 common shares and 1,000,000 warrants, to
Steven D. Rudnik, our President, Chief Executive Officer and a Director, in lieu
of paying him $100,000 cash of his salary for fiscal year 2005. The 1,000,000
units paid to Mr. Rudnik, valued at the then private placement unit price of
$0.10 per unit, are equivalent to the $100,000 in salary for which these units
were issued.

4. Stock Issued for Consulting Services. Beginning in January, 2005 and
continuing through the date hereof, we issued an aggregate 3,350,000 common
shares and 1,200,000 stock options to consultants for investor relations and
general business consulting services rendered to the Company pursuant to the
terms of their consulting agreements.

As of October 21, 2005, we have outstanding 139,106,672 common shares, currently
exercisable stock options to purchase 7,448,074 common shares, warrants to
purchase 47,519,350 common shares all of which are currently exercisable,
convertible preferred stock, presently convertible into 1,757,198 common shares,
and irrevocable subscription agreements in our current private placement to
issue 1,500,000 common shares and common stock purchase warrants. These
outstanding securities currently require an authorized amount of 197,664,628
common shares, which amount does not include the aggregate 8,333,332 common
shares we contemplate issuing in our current private placement in the form of
4,166,666 units at the price of $.06 per unit to raise an approximate $250,000
in additional gross proceeds, with such units requiring 4,166,666 common shares

and 4,166,666 warrants, with an equivalent number of common shares underlying
these warrants. Following the reissuance of the stock options and common stock
purchase warrants to replace the 6,789,625 securities previously surrendered for
cancellation by our officers and directors, as well as authorizing the issuance
of 11,247,607 common shares to accommodate the conversion of the Series E
preferred shares and the issuance of 1,500,000 common shares and equivalents
pursuant to irrevocable subscription agreements and an aggregate 8,333,332
common shares and equivalents we plan to issue in our current private placement,
we will have 224,035,192 common shares outstanding on a fully diluted basis,
comprised of 151,270,946 outstanding common shares, currently exercisable stock
options to purchase 11,955,783 common shares, warrants to purchase 54,884,599
common shares and convertible preferred stock, convertible into 1,757,198 common
shares.

Accordingly, if our shareholders approve the amendment to our Certificate of
Incorporation to increase our authorized common shares from 200,000,000 to
300,000,000, we will utilize an aggregate 224,035,192 authorized common shares
to cover our existing and projected common share requirements. Except for the
plan to use the approximate 8,333,332 common shares and equivalents for our
current private placement needs, the Board of Directors has no other plans,
proposals or arrangements to issue any of the newly authorized shares of common
stock to effect any acquisitions, equity financings, stock dividends or stock
splits or other transactions that would involve the issuance of our common
stock.

In the event shareholders do not vote to approve the amendment to our
certificate of incorporation, increasing our authorized common shares to
300,000,000, we will not be able to: (1) replace the 6,791,625 options and
warrants as well as the 11,247,607 common shares previously surrendered by our
officers and directors for cancellation; (2) issue any of the 8,333,332 units we
intend to sell in our current private placement to new investors to raise
additional gross proceeds of approximately $250,000, the result of which could
have a material adverse effect on our plan of operations and financial
condition, requiring that we terminate employees and or reduce other costs of
our operations, or (3) issue any new common shares or their equivalents for any
proper corporate purpose, including stock issuances for equity financings or for
services rendered to the Company.

Potential Anti-Takeover and Other Effects of the Proposed Amendment

The increase in the authorized number of shares of Common Stock could have
some negative consequences to shareholders. The authorization of new shares of
Common Stock will not, by itself, have any effect on the rights of holders of
shares of Common Stock.However, the issuance of new shares of Common Stock could
affect the holders of our shares of the Common Stock in a number of ways. For
example, the voting power of our outstanding Common Stock will be diluted to the
extent we issue additional shares of Common Stock in the future. Also, the
issuance of Common Stock may result in a dilution of earnings per share of the
Common Stock.

The increase in the authorized number of shares of Common Stock could have an
anti-takeover effect. If the Company's Board of Directors desires to issue
additional shares in the future, such issuance could dilute the voting power of
6
a person seeking control of the Company, thereby deterring or rendering more
difficult a merger, tender offer, proxy contest or an extraordinary corporate
transaction opposed by Company management. Our Board has not proposed the
amendment to increase the authorized Common Stock for the purpose of making it
more difficult for a third party to acquire the Company, and Company management
is not aware of any specific proposal or takeover attempt by any third party at
the current time. However, the additional Common Stock authorized by this
amendment could be issued by Company management to discourage or defeat an
attempt to change control of the Company. For example, the Company could
privately place shares with purchasers who might side with the Board of
Directors in opposing a hostile takeover bid.

The Company's Existing Anti-Takeover Defenses

The Company's Articles of Incorporation do not contain any other provisions
which the Company reasonably believes has anti-takeover effects. Our Articles of
Incorporation and Bylaws contain other provisions that may have relevance in a
contest for control of the Company but which are not properly characterized as
takeover defenses. For example, our Bylaws contain procedural requirements with
respect to proposals by shareholders or nominations for directors at special or
annual meetings.

The Amendment to increase the number of authorized shares will have no effect on
the legal rights of the holders of the existing shares of Common Stock.

THE BOARD OF DIRECTORS HAS ADOPTED RESOLUTIONS THAT SET FORTH THE AMENDMENT,
DECLARE THE ADVISABILITY OF THE AMENDMENT, AND SUBMIT THE AMENDMENT TO THE
STOCKHOLDERS FOR APPROVAL. THE BOARD RECOMMENDS APPROVAL OF THE AMENDMENT BY THE
STOCKHOLDERS.

PROPOSAL THREE
APPROVAL OF AMENDMENT TO THE CONSENT PROCEDURE

GENERAL

Section 228EMPLOYMENT AGREEMENT
FOR
STEVEN D. RUDNIK, PRESIDENT AND CHIEF EXECUTIVE OFFICER

On October 11, 2005, the Board of the General Corporation Law of the State of Delaware states that,
unless otherwise provided in the certificate of incorporation, any action that
may be taken at any annual or special meeting of stockholders, may be taken
without a meeting, without prior notice and without a vote, if consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and those consents are
deliveredDirectors approved an amendment to the
corporation by delivery to its registered office in Delaware,
its principal place of business or an officer or agent of the corporation having
custody of the book in which the proceedings of meetings of stockholders are
recorded. The Company's Certificate of Incorporation contains no provision or
language in any way limiting the right of stockholders of the Company to take
action by written consent.

Only stockholders of record as of May 14, 2004 are entitled to consent, to
withhold their consent, or to revoke their consent, to the Amendment.
Stockholders are entitled to one vote for each outstanding share of Common Stock
held at the record date. As of the record date there were 79,624,641 issuedcurrent employment agreement with Steven D. Rudnik, our President and
outstanding shares of Common Stock.

Consents, once dated, signed, and delivered to the Company, will remain
effective unless and until revoked by written notice of revocation dated,
signed, and delivered to the Company at the address set forth below on or before
June 30, 2004.

The Amendment will be approved if by June 30, 2004 the Company holds unrevoked
written consents of stockholders approving the Amendment from a majority of the
outstanding shares of Common Stock at the Record Date. Consequently, the
withholding of consent, abstentions and the failure to deliver a Consent Card
would all have the effect of a vote against approval of the Amendment. If a
stockholder holds his shares in "street name" and fails to instruct his broker
or nominee as to how to vote his shares, the broker or nominee may not, pursuant
to applicable stock exchange rules, vote such shares and, accordingly, such
shares will have the effect of a vote against the Amendment.

Stockholders are requested to indicate approval of the Amendment by signing and
dating the Consent Card, checking the box on the Consent Card which correspondsChief Executive Officer, subject to the approval of the Company's shareholders.
A copy of Mr. Rudnik's current Employment Agreement with the Company dated April
15, 2002, is included in this proxy statement as Exhibit B; a copy of the
proposed Amendment to Mr. Rudnik's Employment Agreement is included in this
proxy statement as Exhibit C.

CURRENT EMPLOYMENT AGREEMENT

In April, 2002, the Company entered into an employment agreement
with Steven D. Rudnik, the President and delivering the Consent CardChief Executive Officer, to serve in
such capacities for a five year term, ending in April, 2007. Pursuant to the
Company's transfer agent at the address set forth below. Withholdingterms of consentthis agreement, Mr. Rudnik is entitled to the Amendment, or abstention with respect to the approvalreceive a base salary of
$133,333 each year of the Amendment,
may be indicated by signing and dating the Consent Card, checking the box which
corresponds to withholding of consent to the Amendment or abstention with
respect to the approval of the Amendment, respectively, and delivering the
Consent Card to the Company's transfer agent at the address set forth below.

A CONSENT CARD WHICH HAS BEEN SIGNED, DATED AND DELIVERED TO THE COMPANY'S
TRANSFER AGENT WITHOUT INDICATING APPROVAL, WITHHOLDING OF CONSENT, OR
ABSTENTION WILL CONSTITUTE A CONSENT TO THE AMENDMENT.

Consent Cards may be delivered to the following address:

Securities Transfer Corporation
2591 Dallas Parkway,
Suite 102
Frisco, Texas 75034
Attention: Proxy Department

Consent Cards should be delivered to the Company's TRANSFER AGENT as soon as
possible. An addressed return envelope is enclosed for this purpose, which
requires no postage if mailed in the United States. Consent Cards and
revocations of consents will be deemed to have been receivedterm. Upon attainment by the Company of gross revenues
in amounts commencing at $750,000 and for each $250,000 increase in gross
revenues thereafter, the Company agreed to pay Mr. Rudnik an $11,111 increase in
the base salary for each remaining year during the term of the agreement. Mr.
Rudnik is also eligible to receive stock grants in the amount of 20,833 shares
upon actual deliverythe Company's attainment of gross revenues of $750,000 and for each
$250,000 increase in gross revenues thereafter up to $2,000,000, Mr. Rudnik may
earn additional stock grants of 20,833 shares; upon the attainment of $2,500,000
of gross revenues and for each $500,000 increase in gross revenues up to
$4,000,000, Mr. Rudnik may earn additional stock grants of 25,000 shares. Upon
attainment of $750,000 in gross revenues and for each $250,000 increase
thereafter up to $2,000,000, Mr. Rudnik may earn stock options to purchase
24,306 common shares at the exercise price that is the greater of $.10, or that
amount represented by the average trading price of the Company's common shares
during the 20 successive trading days immediately preceding the vesting dates of
the applicable stock options, as reported by the Electronic Bulletin Board,
over-the-counter market or on any successor stock exchange; upon the attainment
of $2,500,000 of gross revenues and for each $500,000 increase thereafter up to
$4,000,000, Mr. Rudnik shall receive stock options to purchase 100,000 shares.
As of the date of this proxy statement, the Company has not made any increased
base salary payment nor has it issued any stock grants or stock options to Mr.
Rudnik based upon the attainment of gross revenues. In addition, the Company
pays Mr. Rudnik a car allowance in the amount of $900 per month as well as
reimbursement for all maintenance and insurance costs for the automobile. As
well, the Company reimburses Mr. Rudnik for the reasonable, ordinary and
necessary pre-approved business expenses incurred by him during the scope of his
employment. The Company maintains a term life insurance policy on Mr. Rudnik's
life in the face amount of $2,000,000, payable to his designated beneficiaries.
In the event the Company terminates his employment during the term for reasons
other than "Cause", the Company shall pay Mr. Rudnik a severance benefit equal
to six months of his then base salary. This agreement requires Mr. Rudnik to
abide by the non-competition, confidentiality and restrictive covenants for a
period of 24 months following any termination of his employment with the
Company.

During the past four years of the term of Mr. Rudnik's employment
agreement, Mr. Rudnik has offered, and the Board of Directors has accepted, to
exchange between $100,000 and $110,000 of his cash base salary for restricted
Company securities during each of these four years. These exchanges, including
the one made during the current year of 2005, has permitted the Company to save
a significant portion of its cash, $410,000 to date. The "conversion rate" used

during these four exchange transactions, permitting the issuance of securities
to Mr. Rudnik in lieu of part of his base salary, historically has been based
upon the then most current private placement offering terms to prospective
accredited investors. During 2002, the Company's private placement offered
accredited investors restricted common shares at the price of $.10 per share and
that price was utilized by the Board of Directors as the conversion rate in
exchange for $110,000 of Mr. Rudnik's 2002 cash base salary, resulting in the
issuance to him of 1,100,000 restricted common shares; during 2003, the
conversion rate was $.10 per share, resulting in the issuance of 1,000,000
common shares; in 2004, the applicable private placement terms to prospective
investors was $.06 for a "Unit", consisting of one (1) restricted common share
and one-half (1/2) warrant to purchase a common share at the exercise price of
$0.15, and Mr. Rudnik was issued 1,666,666 restricted common shares and warrants
to purchase 833,333 common shares at the exercise price of $0.15 per share, and;
during the current 2005 year, the conversion rate was also based upon the
Company's private placement of Units, at the price of $.10 per unit, with each
unit composed of one (1) common share and one (1) warrant, exercisable at the
price of $0.15 per share.

AMENDMENT TO EMPLOYMENT AGREEMENT

The proposed "Amendment" to Mr. Rudnik's current employment agreement
retains all of the material terms and provisions discussed above address.

ABSENCEand seeks to
add two (2) new provisions: the first seeks to extend the employment term for
approximately three and one-half (3 1/2) years, from April 14, 2007, the end of
the employment term currently in effect under the employment agreement, to
December 31, 2010, and; the second seeks to continue to provide Mr. Rudnik with
the option to convert up to $100,000 of his cash base salary into Company
securities.

Conversion of up to $100,000 of Base Salary into Company Stock During
the Remaining Five Years of the Employment Term. The Amendment proposes to
permit Mr. Rudnik the option to convert up to $100,000 of his cash base salary
during each of the next five (5) years at the fixed conversion equal to $.06 per
"Unit", with each Unit consisting of one (1) restricted common share and one (1)
warrant to purchase a share of common stock at the exercise price of $.15 per
share anytime during the three year period following conversion, which
conversion rights are only exercisable by Mr. Rudnik during any of the five
years only if the Company attains the following cumulative gross revenues on or
before the expiration of each of the five applicable years:

Maximum Amount of Base Amount of Cumulative Gross Revenues Required
Calendar Year Salary Convertible During Term to Exercise Conversion Right
- ------------- ------------------ ----------------------------------------

2006 $100,000 $1,000,000
2007 $100,000 $2,000,000
2008 $100,000 $3,000,000
2009 $100,000 $4,000,000
2010 $100,000 $5,000,000

If the Company does not attain at least $1,000,000 in cumulative gross
revenues on or before December 31, 2006, Mr. Rudnik's right to convert any of
his $100,000 cash base salary earned during calendar year 2006 automatically
terminates. If, however, the Company fails to attain cumulative gross revenues
of $2,000,000 on or before December 31, 2007, terminating Mr. Rudnik's
conversion right for the calendar year of 2007, but achieves cumulative gross
revenues of $7,000,000 two months later on March 1, 2008, Mr. Rudnik's rights to
exercise his conversion of up to $100,000 of his base salary during 2008, 2009
and 2010 become fully exercisable during each of these three years. If the

Company attains the cumulative gross revenues for each of the five calendar
years of the new term of his employment agreement and Mr. Rudnik exercises his
conversion rights for the maximum $100,000 each year, the Company will have
issued to him an aggregate 8,333,335 restricted common shares and 8,333,335
warrants to purchase an equal number of common shares at the exercise price of
$.15 per share. This cumulative 16,666,670 Company securities represents 8.0% of
our currently outstanding common shares, on a fully diluted basis, and if
Proposal Two is approved by shareholders, increasing the number of common shares
we can issue, we will replace Mr. Rudnik's 4,486,875 surrendered options and
warrants and also replace the options and warrants surrendered by the other
directors and officers and, subject to market conditions, we issue up to an
additional 8,333,332 units to prospective investors in our private placement,
Mr. Rudnik would beneficially own 28,035,192 outstanding common shares,
representing approximately 12.7% of our projected 223,035,192 outstanding common
shares, on a fully diluted basis.

Extension of Employment Term for Additional Three and One-Half (31/2)
Years. The term of Mr. Rudnik's employment under his existing employment
agreement was for five (5) years, commencing on April 15, 2002, and terminating
five years thereafter, on April 14, 2007. The amendment seeks to extend Mr.
Rudnik's employment term, from April 14, 2007 to December 31, 2010, an
additional three and one-half years.

THE BOARD OF APPRAISAL RIGHTSDIRECTORS HAS ADOPTED RESOLUTIONS THAT SET FORTH THE AMENDMENT TO
MR. RUDNIK'S EMPLOYMENT AGREEMENT AND THE SUBMITTAL OF THE AMENDMENT TO THE
STOCKHOLDERS FOR APPROVAL. THE BOARD RECOMMENDS APPROVAL OF THE AMENDMENT TO THE
EMPLOYMENT AGREEMENT OF OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER BY THE
STOCKHOLDERS.

PROPOSAL FOUR

INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed Rosenberg Rich Baker Berman & Company, the
independent registered public accounting firm, to audit the financial statements
of the Company for the fiscal year ending December 31, 2005. The Board proposes
that the Stockholders who abstain from consentingratify this appointment. Rosenberg Rich Baker Berman &
Company audited the Company's financial statements for the fiscal years ended
December 31, 2004 and restated those results which can be found in the copy of
the Company's Annual Report on Form 10-KSB, as amended, for the fiscal year
ended December 31, 2004, enclosed and delivered to Stockholders with respectthis proxy
statement. The Company expects that representatives of Rosenberg Rich Baker
Berman & Company will be present at the Special Meeting, with the opportunity to
make a statement if they so desire, and will be available to respond to
appropriate questions.

Independent Auditors' Fees
- --------------------------

For the fiscal year ended December 31, 2004, the aggregate fees billed for
professional services rendered by Rosenberg Rich Baker Berman & Company for the
audit of the Company's financial statements and the reviews of its financial
statements included in the Company's quarterly reports totaled approximately
$40,307.

Tax Fees
- --------

For the fiscal year ended December 31, 2004, we paid Rosenberg Rich Baker
Berman & Company a total of $5,961 for tax compliance, tax advice and tax
planning to our auditors.

All Other Fees
- --------------

For the fiscal year ended December 31, 2004, there were no other fees
billed by Rosenberg Rich Baker Berman & Company, the Company's independent
auditors.

The affirmative vote of a majority of the shares at the Special Meeting is
required to ratify the appointment of the independent public accountants.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE RATIFICATION OF THE
APPOINTMENT OF ROSENBERG RICH BAKER BERMAN & COMPANY INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS, AND PROXY SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR
THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------

We are a public company and file Special, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any document we file at the SEC's public
reference room at 100 F Street, N.E., Washington, D.C. 20005. You can request
copies of these documents by writing to the Amendment, who
withhold consentSEC and paying a fee for the copying
cost. Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the public reference room. Our SEC filings are also available to
the Amendment, or who do not deliver a Consent Card do not
havepublic at the right to an appraisal of their shares of Common Stock or any similar
dissenters' rights under applicable law.

EXPENSE OF CONSENT SOLICITATION

The Company will bearSEC's web site at http://www.sec.gov. In addition, you can
read and copy our SEC filings at the entire costoffice of the solicitation, includingNational Association of
Securities Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.

You should rely only on the preparation, assembly, printinginformation contained or incorporated by
reference in this Proxy Statement. We have not authorized anyone else to provide
you with information that is different from what is contained or incorporated in
this Proxy Statement. This document is dated November __, 2005. You should not
assume that the information in this Proxy Statement is accurate as of any later
date, and the mailing of this ConsentProxy Statement to stockholders shall not create
any implication to the contrary.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------

The Securities and any
additional material furnishedExchange Commission allows us to stockholders. Brokerage"incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. We incorporate
by reference the documents listed below:

* Our Annual Report on Form 10-KSB for the fiscal year ended December 31,
2004, as amended, a copy of which accompanies this Proxy Statement.

SOLICITATION OF PROXIES
-----------------------

The solicitation of proxies in the enclosed form is made on behalf of the
company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telephone using the services of directors, officers and regular
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be requested to forwardreimbursed by the solicitingCompany for
expenses incurred in sending proxy material to their principals and to obtain authorization for the
execution of consents. The Company may, upon request, reimburse brokerage firms,
and other custodians, nominees, and fiduciaries for their reasonable expenses in
forwarding solicitation materials to their principals.

SECURITY OWNERSHIP

The following table sets forth information concerning ownershipbeneficial owners of the
Company's Common Stock, asstock.

OTHER MATTERS
-------------

The Board of May 14, 2004, by each person known byDirectors knows of no matter which will be presented for
consideration at the CompanySpecial Meeting other than the matters referred to be the
beneficial owner of more than five percent of the Common Stock, each director,
each executive officer and by all directors and executive officers of the
Company as a group:

Title Name and Address of Amount and Nature of Percent
of Class )* Beneficial Owner Beneficial Ownership (1) of Class
- ----------- ---------------- ------------------------ --------
Common Ivano Angelastri 2,312,500 (2) 2.88 %
Stock Steven L. Gray 4,446,704 (3) 5.49 %
Steven W. Jagels 622,083 (4) 0.78 %
Joerg H. Klaube 1,660,417 (5) 2.07 %
Steven D. Rudnik 9,425,695 (6) 10.93 %
Joseph J. Tomasek 1,933,250 (7) 2.39 %
Schuerch, Ulrich 6,510,000 (8) 7.65 %

Address of all persons above: c/o the Company.

All Directors and Executive
Officers 20,400,649 22.53 %
as a Group (6 persons)

(1)* The Company also has issued and outstanding as of May 14, 2004, 526,582
shares of its Senior Convertible Preferred Stock, with concentrations in excess
of 10% for one or more of the holders of such stock, however, none of such
shares bear any voting rights.
____________________________

(1)For purposes of this
table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of May 14, 2004. For purposes of
computing the percentage of outstanding shares of Common Stock held by each
person or group of persons named above, any security which such person or
persons has or have the right to acquire within such date is deemed to be
outstanding but is not deemed to be outstanding for the purpose of computing
the percentage ownership ofProxy Statement. Should any other person. Except as indicated inmatter properly come before the footnote to this table and pursuant to applicable community property laws,Special
Meeting, it is the Company believes based on information supplied by such persons, thatintention of the persons named in this table have solethe accompanying proxy to
vote such proxy in accordance with their best judgment.

STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS

The Board of Directors has fixed December 15, 2006 as the date for our 2006
Annual Meeting of Shareholders. To be considered for inclusion in our proxy
statement relating to the 2006 Annual Meeting of Stockholders, stockholder
proposals must be received no later than August 15, 2006. Proposals not received
during that time frame will not be voted on at the Annual Meeting. If a proposal
is received during that time frame, the proxies that management solicits for the
meeting may still exercise discretionary voting and investment powerauthority on the proposal under
circumstances consistent with respect to all sharesthe proxy rules of Common Stock which they beneficially own.
(2) Includes options to acquire 512,500 shares and warrants for 100,000 shares.
(3) Includes options to acquire 400,275 shares, warrants for 632,333 shares and
preferred stock convertible into 316,667 shares .
(4) Includes options to acquire 602,083 shares.
(5) Includes options to acquire 560,417 shares.
(6) Includes options to acquire 4,147,917 shares, warrants for 833,333 shares
and preferred stock convertible into 1,666,667 shares.
(7) Includes options to acquire 262,500 shares, warrants for290,250 shares and
preferred stock convertible into 580,500 shares.
(8) Includes options for 1,500,000 shares, warrants for 2,000,000 shares and
preferred stock convertible into 2,000,000 shares.

ADDITIONAL INFORMATION

The Company files reports and other information with the Securities and Exchange
Commission. Copies of these documents mayAll stockholder proposals should be obtained atmarked for the SEC's public
reference room in Washington, D.C. The Company's SEC filings are also available
from commercial document retrieval services or on the SEC's web site at
http://www.sec.gov. Stockholders may also request a copyattention of the
Company's
financial reports filed with the SEC by contacting the Company's Secretary, in
writing atMagnitude Information Systems, Inc., 401 State Route 24, Chester, New
Jersey 07930 or by calling (908)
879-2722.07930.

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.

By Orderorder of the Board of Directors

Joerg H. Klaube, Secretary

June __, 2004
Chester, New Jersey
10

IMPORTANT
PLEASE COMPLETE, SIGN AND DATE
YOUR WRITTEN CONSENT AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE

WRITTEN CONSENT OF THE STOCKHOLDERS
OF
MAGNITUDE INFORMATION SYSTEMS, INC.

This consent is solicited by the Board of Directors. When properly executed,
this consent will be voted as designated by the undersigned on the reverse side.
If this consent is signed, dated, and delivered to Magnitude Information
Systems, Inc. with no designation by the undersigned, this consent will
constitute the stockholder's consent to and approval of the amendment.

[X] PLEASE MARK AS IN THIS SAMPLE.

Amendment to increase the authorized Common Stock of the Company from
100,000,000 shares to 200,000,000 shares.

MARK ONLY ONE OF THE FOLLOWING THREE BOXES:

[_] FOR [_] WITHHOLD [_] ABSTAIN

(Please sign and date below)

Dated:____________________,

___________________________
Signature of Stockholder(s)

Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.

11November __, 2005

EXHIBIT A

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE of INCORPORATION
OF
MAGNITUDE INFORMATION SYSTEMS, INC.

MAGNITUDE INFORMATION SYSTEMS, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

FIRST: That by majority vote of the Corporation's Board of Directors
at a duly organized meeting held on May 17, 2004,September , 2005, pursuant to
Section 141 of the General Corporation law of the State of Delaware
(the "DGCL"), and pursuant to the written consents of shareholders
owning a majority of the Corporation's issued and outstanding common
shares on May 14, 2004,September 26, 2005, pursuant to Section 228 of the DGCL,
the following resolution was duly adopted:

RESOLVED, that the Board of Directors and the shareholders of the
Corporation hereby declare it advisable and in the best interests of
the Corporation that Article IV of the Corporation's Certificate of
Incorporation, filed with the Secretary of State, State of Delaware
on April 19, 1988, as amended (the "Certificate of Incorporation")
be amended to read as follows:

FOURTH: The aggregate number of shares of all classes of stock which
the Corporation is authorized to issue is 203,000,000303,000,000 shares,
consisting of 200,000,000300,000,000 shares of Common Stock, par value $.0001
per share, and 3,000,000 shares of Preferred Stock, par value $.001
per share.

SECOND: That the above stated amendment was approved by the Board of
Directors of the Corporation by majority vote pursuant to Section
141 of the DGCL and by written consents of the shareholders of the
Corporation owning a majority of the Corporation's issued and
outstanding common shares on May 14, 2004September 26, 2005 pursuant to Section
228 of the DGCL.

THIRD: That the above stated amendment was duly adopted in accordance with
the provisions of Section 242 of the DGCL.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
be signed by Steven D. Rudnik, President, an Authorized Officer, this ____ day
of June,______, A.D. 2004.2005.

MAGNITUDE INFORMATION SYSTEMS, INC.

By: ----------------------------------------------______________________________________
Steven D, Rudnik, President

EXHIBIT B

Employment Agreement

EMPLOYMENT AGREEMENT dated as of April 15, 2002 (the "Agreement")
between Magnitude Information Systems, Inc. (the "Company") and Steven D.
Rudnik, presently residing at 8 Knollwood Terrace, Chester, NJ 07930 (the
"Executive").

WHEREAS, Executive has represented to the Company that he has certain
valuable expertise and know-how in the area of early-stage software companies;
and

WHEREAS, based upon such valuable expertise and know-how the Company
wishes to employ the services of Executive; and

WHEREAS, the parties desire to enter into this Agreement in order to
insure Executive's employment by the Company, in such capacities and with such
duties as hereinafter set forth and to insure the Company that it will have the
benefit of his continued services for at least the Term of Employment herein
described;

NOW THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

1. EMPLOYMENT AND DUTIES

1.1. General. The Company hereby employs Executive, and Executive
agrees to serve as Chairman, Chief Executive Officer and President of the
Company upon the terms and conditions herein contained. Executive agrees to
serve the Company faithfully and to the best of his ability under the direction
of the board of directors of the Company (the "Board"). Nothing contained herein
shall restrict Executive from acting as a director of or owning shares in other
companies not in competition with the Company, provided that such services and
ownership interests do not materially interfere with Executive's performance of
his duties hereunder. Executive shall report directly to the Board and shall
provide such reports as may be requested by the Board.

1.2. Exclusive Services. For so long as Executive is employed by the
Company, he shall devote his full-time working hours to his duties hereunder.
Executive shall not, directly or indirectly, render services to any other person
or organization for which he receives compensation without the prior written
approval of the Board or otherwise engage in activities which would interfere
with his faithful performance of his duties hereunder.

1.3. Term of Employment. Executive's employment under this Agreement
shall commence on the date hereof (the "Effective Date") and shall terminate
five (5) years after the Effective Date (the "Initial Term"), unless terminated
earlier due to death of Executive or Termination for Cause pursuant to this
Agreement; subject, however, to automatic renewals for additional two year terms
(the "Renewal Term(s)") except where the Company provides written notice of
non-renewal no later than six months prior to the expiration of the Initial Term
or any Renewal Term. The period commencing on the Effective Date and ending on
the fifth anniversary of the Effective Date, or such later date to which the
term of Executive's employment shall have been extended, or such earlier date as
may result from Termination for Cause or resignation, is hereinafter referred to
as the "Employment Term".

1.4 Representation. Executive hereby confirms that he is in good
health and has the mental and physical abilities to carry out and perform all of
the services required under the terms of this Agreement.

2. COMPENSATION

2.1. Base Salary. From the Effective Date, the Company shall pay
Executive a base salary ("Base Salary") at a rate of $133,333 per annum, payable
in accordance with the Company's payroll practices, as such practices may exist
from time to time. The Base Salary may be increased by up to an aggregate
$66,667 per annum during the Employment Term as follows: commencing at $-0- upon
April 1, 2002, upon the attainment during the Employment Term of each of the
below cumulative gross sales revenue amounts, determined in accordance with
generally accepted accounting principles consistently applied, and as set forth
below, the Base Salary shall be increased $11,111 annually, up to the maximum
$200,000 per annum:

Gross Sales Revenues Base Salary Increase (per annum)
-------------------- --------------------------------
$750,000 $11,111
$1,000,000 $11,111
$1,250,000 $11,111
$1,500,000 $11,111
$1,750,000 $11,111
$2,000,000 $11,111

Each of the above increases in the Base Salary shall be effective and added to
Executive's Base Salary for the next pay period following the Company's
attainment of each of the respective cumulative gross sales revenue amounts.

2.2. Stock Grants. From time to time and commencing at $-0- upon April
1, 2002, the Company shall issue to Executive the following stock grants
corresponding to the Company's attainment during the Employment Term of certain
cumulative gross sales revenue amounts, determined in accordance with generally
accepted accounting principles consistently applied, as follows:

Gross Sales Revenues Stock Grant Amounts
-------------------- -------------------
$750,000 20,833
$1,000,000 20,833
$1,250,000 20,833
$1,500,000 20,833
$1,750,000 20,833
$2,000,000 20,833
$2,500,000 25,000
$3,000,000 25,000
$3,500,000 25,000
$4,000,000 25,000

Each of the above stock grants shall fully vest and be delivered to Executive as
soon as practicable following the Company's attainment of the specified
cumulative Gross Sales Revenue amounts.

2.3 Stock Options. The Company hereby grants to Executive the following options
to purchase, subject to the Company's attainment of the cumulative gross sales
revenue amounts set forth below, commencing at $-0- upon April 1, 2002, and
determined in accordance with generally accepted accounting principles
consistently applied, the Company shall issue to Executive from time to time
Stock Options to purchase up to an aggregate 545,833 of the common shares of the
Company (the "Stock Option(s)"), exercisable at any time during the seven (7)
year period following the date of their grant and whose exercise price shall be
equal to the higher of $0.10 per share or that amount represented by the average
trading price of the Company's common shares during the 20 successive trading

day period immediately preceding the applicable date upon which any of the
following Stock Options shall fully vest or, in the case of a stock grant or
commission payable in the form of Company stock, on the date fully vested or on
the date earned, as reported in the Electronic Bulletin Board, over-the-counter
market or on any successor stock exchange (the "Market Price"), the designated
amounts of which shall fully vest from time to time upon the Company's
attainment of each cumulative level of gross sales revenue amounts in accordance
with the following schedule:

Gross Sales Revenues Amount of Fully Vested Stock Option
- -------------------- ------------------------------------
$750,000 24,306
$1,000,000 24,306
$1,250,000 24,306
$1,500,000 24,306
$1,750,000 24,306
$2,000,000 24,306
$2,500,000 100,000
$3,000,000 100,000
$3,500,000 100,000
$4,000,000 100,000

3. EMPLOYMENT BENEFITS

3.1. General Benefits. Executive shall receive the following benefits
during the Employment Term: (a) Executive will be eligible to participate in
benefit programs of the Company consistent with those benefit programs provided
to other senior managers of the Company excluding any key employee stock option
plans outside of this Agreement; and

(b) a fully paid medical/hospitalization policy for Executive and
his family.

3.2. Vacation. Executive shall be entitled to four weeks paid
vacation during the year 2002 and four weeks each year thereafter in accordance
with Company policies and procedures. Executive may only carry up to an
aggregate of five (5) vacation days from one calendar year to the next in
accordance with current Company policy.

3.3. Automobile Allowance. Executive will receive a $900 car
allowance per month and be responsible for mileage and all other car expense.

3.4. Reimbursement of Expenses. The Company will reimburse Executive
for reasonable, ordinary and necessary pre-approved business expenses incurred
by him in the fulfillment of his duties hereunder upon presentation by Executive
of an itemized account of such expenditures, in accordance with Company
practices consistently applied.

3.5. Severance. Provided Executive's termination is not based upon
"Cause" as defined in Section 4.2 below, the Company shall pay to Executive a
severance benefit equal to six (6) months of Executive's then Base Salary, in
the event such termination occurs during the remaining time of the Employment
Term, or in case of non-renewal of the Employment Term..

3.6 Life Insurance. The Company shall purchase and maintain during
the Employment Term a term life insurance policy, insuring the life of
Executive, providing a death benefit in the amount of $2,000,000 and which
proceeds shall be payable in such event to Executives designated beneficiaries.

4. TERMINATION OF EMPLOYMENT

4.1. Termination for Cause; Resignation.

4.1.1. General. If, prior to the expiration of the Employment Term,
Executive's employment is terminated by the Company for Cause, the only
compensation to which Executive shall be entitled is his Base Salary as then in
effect through and including the date of termination and his accrued unused
vacation and his earned cash commissions, if applicable, unless such termination
is for a Disloyalty Termination Event (as described in Section 4.2 below), in
which case the only payment to which Executive shall be entitled is his Base
Salary as then in effect through and including the date of termination and
accrued unused vacation. If Executive resigns from his employment hereunder, the
only payment to which Executive shall be entitled is his Base Salary as then in
effect through and including the date of resignation, accrued unused vacation
and severance as defined in section 3.5 above.

4.1.2. Date of Termination/Resignation. The date of termination for
a Felony Termination Event or Substance Abuse (as defined in Section 4.2 below)
shall be the date of the written Notice of Termination provided for in Section
4.1.3. The date of termination or cessation of employment for a Conduct,
Performance or Disloyalty Termination Event shall be the date thirty (30) days
after the Event is finally determined through applicable Company procedures
governing the conduct of employees. In the event termination for Conduct,
Performance or Disloyalty is disputed, the Company may, at its option, suspend
Executive with fifty percent (50%) of Executive's then current pay until such
dispute is resolved in accordance with this Agreement. The date of resignation
shall be the date specified in the written notice of resignation from Executive
to the Company, or if no date is specified by Executive therein, three (3)
business days after receipt by the Company of written notice of resignation from
Executive. In no event shall resignation date specified by Executive in any
written notice of resignation be more than thirty (30) days from the date of
such notice.

4.1.3. Notice of Termination for Felony Termination Event. Unless
first terminated by a written notice of the Board, termination of Executive's
employment for a Felony Termination Event (as defined in Section 4.2 below)
shall be effected by delivery of a written notice of termination from the
Company to Executive, which notice shall specify the event or events set forth
in Section 4.2 giving rise to such termination (the "Notice of Termination").

4.1.4. Arbitration. All disputes involving termination of
Executive's employment for a Conduct, Performance or Disloyalty Termination
Event shall be resolved by binding arbitration administered by the American
Arbitration Association (the "AAA") in accordance with the terms of this
Agreement, and the Commercial Arbitration Rules of the AAA. In the event of any
inconsistency between such rules and this Agreement, this Agreement shall
control. The arbitration process shall commence when Executive has received
written notice by the Company that Executive is being dismissed for any of the
above referenced reasons. Either party may then notify the AAA who shall then
supply the parties with a list of three potential arbitrators. Each party shall
then have four (4) business days from the date of receipt to object to one of
the potential arbitrators. The remaining potential arbitrator (and if more than
one is remaining, then one shall be selected by lot) shall serve as the single
arbitrator. Each party shall then have sixty (60) days to conduct discovery
pursuant to the terms and provisions of the New Jersey Rules of Civil Procedure.
Upon conclusion of the sixty (60) day period or such earlier time as the parties
may agree the parties shall participate in an arbitration proceeding in
accordance with the AAA's then current policies and procedures. The arbitration
proceedings shall be conducted in New Jersey at the offices of AAA or such other
place in New York as the parties shall mutually agree. The arbitrator shall be
empowered to impose sanctions and take such other actions as the arbitrator
deems necessary to the same extent a judge could do pursuant to the New Jersey
Rules of Civil Procedure and applicable law. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. Each party shall
be responsible for their own expenses incurred in conjunction with any
arbitration proceeding or action.

4.2 Cause. Termination for "Cause" shall mean termination of
Executive's employment because Executive (a) has engaged in fraudulent or
criminal conduct in connection with the performance of his duties hereunder
which conduct materially and adversely affects the Company (a "Conduct
Termination Event"), (b) admits to or has been convicted of a crime punishable
by imprisonment for more than one year (a "Felony Termination Event"), (c) has
failed to perform (following a written warning specifying such deficiency and a
reasonable opportunity to cure) the normal and customary duties required of his
position of employment (a "Performance Termination Event"), (d) has been
disloyal to the Company by assisting competitors of the Company or their
associates to the disadvantage of the Company by a breach of Section 6 or by
otherwise actively assisting competitors to the disadvantage of the Company (a
"Disloyalty Termination Event"), or (e) has failed to cure after a notice of a
reasonable directive issued by the Board pertaining to conduct detrimental to
the Company and/or its business, a breach of this Agreement and shall include
but not be limited to alcohol and substance abuse, harassment and other such
actions which jeopardize the Company and or its business.

5. PERMANENT DISABILITY

In the event Executive shall fail, because of Illness, physical or
mental disability or other incapacity, for a period of three (3) consecutive
months, or for shorter periods aggregating four (4) months during any
twelve-month period, to render the services provided for by this Agreement, then
the Company may, by written notice to Executive after the last day of the three
(3) consecutive months of disability or the day on which the shorter periods of
disability equal an aggregate of four months, reduce Executive's compensation
hereunder for "Permanent Disability" as follows:

First Four Months No Reduction

Following 12 months Fifty percent (50%)
(or if less, the of compensation
balance of the
Employment Term)

Executive will use his reasonable best efforts to cooperate with any physician
practicing in the State of New Jersey selected by the Company to determine
whether or not Permanent Disability exists. To the extent a dispute should arise
with respect to whether or not Permanent Disability exists, Executive and the
Company shall each be entitled to select their own physician practicing in the
State of New Jersey having appropriate and acknowledged levels of expertise in
the area of the claimed disability, and the joint determination of such
physicians made in writing to the Company and Executive shall be final and
conclusive for all purposes of this Agreement; provided that if such physicians
cannot agree, the matter will be referred to arbitration in the manner set forth
in Section 4.1.4. Any payments provided for in this Section 5 shall be reduced
to the extent that such payments, together with any disability payments received
by Executive under any disability plan, program or arrangements, exceed
Executive's Base Salary. Except (i) as to the obligation to continue to pay
Executive's medical insurance premiums for a period of 18 months following
delivery of the written notice of "Permanent Disability" to Executive or (ii) as
otherwise provided herein, upon final determination of permanent disability, the
Company shall have no further obligation to Executive under this Agreement.

6. NON-COMPETITION/NON-SOLICITATION AND CONFIDENTIALITY

6.1. Non-competition/Non-solicitation. Executive shall not, directly
or indirectly, as a sole proprietor, member of a partnership, stockholder or
investor, officer or director of a corporation, or as an employee, associate,
consultant or agent of any person, partnership, corporation or other business
organization or entity other than the Company: (a) engage in any business that
is in competition with any business actively conducted by the Company or any of
its subsidiaries/affiliates within the various states in which the Company or
its subsidiaries/affiliates conduct business; (b) solicit or endeavor to entice
away from the Company or any of its subsidiaries/affiliates any person who is,
or was during the then most recent 24-month period, employed by or a
subcontractor of the Company or any of its subsidiaries/affiliates; (c) solicit
or endeavor to entice away from the Company or any of its
subsidiaries/affiliates any person or entity who is, or was within the then most
recent 24-month period, a customer, client or prospect of the Company or any of
its subsidiaries/affiliates for a competing product; or (d) perform any services
in competition with the Company or its subsidiaries/affiliates for or on behalf
of any such customer, client or prospect. For purposes of this paragraph, the
term "prospect" shall be mean those potential customers and/or contacts of the
Company and/or its subsidiaries/affiliates on the date of termination of this
Agreement, as determined and included in a then existing sales prospect report
maintained by the Company's sales management . The obligations of this Section
6.1 shall apply for 24 months after termination of employment of, or resignation
by Executive as well as after the end of the Term of Employment and during
employment and shall be extended by a period of time equal to any period during
which Executive shall be in breach of such obligations.

6.2. Confidentiality. Executive covenants and agrees with the
Company that he will not at any time, except in performance of his obligations
to the Company hereunder or with the prior written consent of the Company,
directly or indirectly, disclose any secret or confidential information that she
may learn or has learned by reason of his association with the Company or any of
its subsidiaries and affiliates. The term "confidential information" includes
information not previously disclosed to the public or to the trade by the
Company's management, or otherwise in the public domain, with respect to the
Company's, or any of its affiliates or subsidiaries, products, services,
facilities, applications and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, products or
service price lists, customer lists, technical information, financial
information (including the revenues, costs or profits associated with any of the
Company's products), business plans, prospects or opportunities.

6.3. Exclusive Property . Executive confirms that all confidential
information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by Executive relating to the
business of the Company shall be and remain the property of the Company.
Similarly, all patents and/or inventions or new products developed by Executive,
alone or with others during the term of this Agreement shall constitute "work
product" as such term is generally used and shall remain the property of the
Company upon termination or expiration of this Agreement.

6.4. Injunctive Relief. Without intending to limit the remedies available
to the Company, Executive acknowledges that a breach of any of the covenants
contained in this Section 6 may result in material and irreparable injury to the
Company or its affiliates or subsidiaries for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, the Company
shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction restraining Executive from engaging in activities
prohibited by this Section 6 or such other relief as may be required
specifically to enforce any of the covenants in this Section 6 and, to the
extent it is successful on the merits, to obtain reimbursement for all its costs
and expenses reasonably incurred, including reasonable attorneys fees, in
connection with the enforcement of this Section 6. If for any reason a final
decision of any court determines that the restrictions under this Section 6 are
not reasonable or that consideration therefor is inadequate, such restrictions
shall be interpreted, modified or rewritten by such court to include as much of
the duration and scope identified in this Section 6 as will render such
restrictions valid and enforceable.

The parties hereto acknowledge and agree that the consideration given for
the non-competition clause contained in Section 6.1 above are the valuable and
substantial stock options set forth in Section 2.4 hereinabove.

7 MISCELLANEOUS

7.1. Notices. All notices or communications hereunder shall be in
writing, addressed as follows

To Company: Board of Directors
Magnitude Information Systems, Inc.
401 Route 24, Chester, New Jersey 07930
With copy to: Chief Financial Officer
Magnitude Information Systems, Inc.
401 Route 24, Chester, New Jersey 07930

To Executive: :Steven D. Rudnik
8 Knollwood Terrace, Chester, NJ 07930

Any such notice or communication shall be sent certified or registered mail,
return receipt requested, or by recognized overnight delivery service, addressed
as above (or to such other address as such party may designate in writing from
time to time), and the actual date of receipt, as shown by the receipt
therefore, shall determine the time at which notice was given.

7.2. Severability. If a court of competent jurisdiction determines that
any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired and (b) such court shall have
the authority to replace such invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.

7.3. Assignment. This Agreement shall inure to the benefit of the heirs
and representatives of Executive and the assigns and successors of the Company,
but neither this Agreement nor any rights hereunder shall be assignable or
otherwise subject to hypothecation by Executive.

7.4 Entire Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and Executive with reference to the subject
matter hereof. This Agreement may be amended at any time by mutual written
agreement of the parties hereto.

7.5. Withholding. The Company shall be entitled to withhold, or cause
to be withheld, from payment any amount of withholding taxes required by law
with respect to payments made to Executive in connection with his employment
hereunder.

7.6. Governing Law. This Agreement shall he construed, interpreted, and
governed in accordance with the laws of New Jersey without reference to rules
relating to conflict of law.

IN WITNESS WHEREOF the Company has caused this Agreement to be duly
executed and Executive has hereunto set his hand, as of the day and year first
above written.

MAGNITUDE INFORMATION SYSTEMS, INC.

By: /s/ Joerg H. Klaube
----------------------------

Exhibit C

Amendment to Employment Agreement

This "Amendment" is dated as of October 17, 2005 and amends and modifies
that certain Employment Agreement, dated April 15, 2002 (the "Agreement"), by
and between Magnitude Information Systems, Inc. (the "Company") and Steven D.
Rudnik, presently residing at 2 Hilltop Road, Mendham, NJ 07945 (the
"Executive"), as follows:

A. Section 1.3., entitled "Term of Employment", shall be deleted in its
entirety and the following new Section 1.3 shall be substituted in lieu thereof:

1.3. Term of Employment. Executive's employment under this Agreement
shall commence on the date hereof (the "Effective Date") and shall
terminate on December 31, 2010 (the "Initial Term"), unless
terminated earlier due to death of Executive or Termination for
Cause pursuant to this Agreement; subject, however, to automatic
renewals for additional two year terms (the "Renewal Term(s)")
except where the Company provides written notice of non-renewal no
later than six (6) months prior to the expiration of the Initial
Term or any Renewal Term. The period commencing on the Effective
Date, or such later date to which the term of Executive's employment
shall have been extended, or such earlier date as may result from
Termination for Cause or resignation, is hereinafter referred to as
the "Employment Term".

B. A new Section 2.4, entitled "Salary Conversion Option" shall be
inserted following Section 2.3 at page three of the Agreement, as follows:

2.4. Salary Conversion Option. As undertaken by the Company
and Executive during each of the past four years of his employment,
the Company hereby grants to the Executive the option to convert up
to $100,000 of his Base Salary during each of the next five years of
the Employment Term at the fixed conversion rate equal to $.06 per
"Unit", with each Unit consisting of one (1) restricted common share
and one (1) common stock purchase warrant, which conversion right
for each such year is only exercisable by Executive if the Company
attains the following cumulative gross revenues on or before the
date of December 31st of each of the five applicable years according
to the following table:

Amount of Cumulative Gross
Revenues Required During
Maximum Amount of Base Year to Exercise
Calendar Year Salary Convertible Conversion Right
------------ ------------------ ---------------------

2006 $100,000 $1,000,000
2007 $100,000 $2,000,000
2008 $100,000 $3,000,000
2009 $100,000 $4,000,000
2010 $100,000 $5,000,000

Each of the common stock purchase warrants obtained pursuant to the
conversion rights set forth in this Section 2.4 shall be exercisable
at the exercise price of $.15 per common share anytime during the
three year period following any conversion (the "Warrant(s)"). The
conversion right set forth in this Section 2.4 automatically
terminates on December 31st of each of the five applicable years of

the Employment Term if the required cumulative gross revenues are
not attained by the Company. For example, if the Company does not
attain at least $1,000,000 in cumulative gross revenues on or before
December 31, 2006, the Executive's right to convert up to $100,000
of his Base Salary earned during calendar year 2006 automatically
terminates. If, on the other hand, the Company fails to attain
cumulative gross revenues of $2,000,000 on or before December 31,
2007, terminating Executive's conversion right for the calendar year
of 2007, but the Company achieves cumulative gross revenues of
$7,000,000 two months later on March 1, 2008, the Executive's rights
to exercise his conversion of up to $100,000 of his Base Salary
during 2008, 2009 and 2010 become fully exercisable during each of
those three years.

C. Ratification and Confirmation of Remaining Terms and Provisions of the
Employment Agreement. The parties hereby ratify and confirm all of the terms and
provisions of the Employment Agreement not expressly modified and amended
pursuant to the provisions of this Amendment.

IN WITNESS WHEREOF the Company has caused this Amendment to be duly executed and
Executive has hereunto set his hand, as of the day and year first above written.

MAGNITUDE INFORMATION SYSTEMS, INC.

DIRECTORS:

By: /s/ Ivano Angelastri
---------------------
Ivano Angelastri

By: /s/ Steven Gray
---------------------
Steven Gray

By: /s/ Joseph J. Tomasek
---------------------
Joseph J. Tomasek

EXHIBIT D

Magnitude Information Systems, Inc.

Audit Committee Charter
December 16, 2002

Note: This audit committee charter considers the provisions of the
Sarbanes-Oxley Act of 2002 and the NYSE proposed new listing standards.

Organization
This charter governs the operations of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
board of directors. The committee shall be members of, and appointed by, the
board of directors and shall comprise at least two directors, where the majority
cannot be comprised of non-independent directors, i.e. members who are
independent of management and the Company. Members of the committee shall be
considered independent as long as they do not accept any consulting, advisory,
or other compensatory fee from the Company and are not an affiliated person of
the Company or its subsidiaries, and meet the independence requirements of the
stock exchange listing standards. All committee members shall be financially
literate, and at least one member shall be a "financial expert," as defined by
SEC regulations.

Purpose
The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to: the integrity of
the Company's financial statements; the financial reporting process; the systems
of internal accounting and financial controls; the performance of the Company's
internal audit function and independent auditors; the independent auditor's
qualifications and independence; and the Company's compliance with ethics
policies and legal and regulatory requirements. In so doing, it is the
responsibility of the committee to maintain free and open communication between
the committee, independent auditors, the internal auditors, and management of
the Company.

In discharging its oversight role, the committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company and the authority to engage independent
counsel and other advisers as it determines necessary to carry out its duties.

Duties and Responsibilities
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. While the audit committee has the
responsibilities and powers set forth in this Charter, it is not the duty of the
audit committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. Management is responsible for the
preparation, presentation, and integrity of the Company's financial statements
and for the appropriateness of the accounting principles and reporting policies
that are used by the Company. The independent auditors are responsible for
auditing the Company's financial statements and for reviewing the Company's
unaudited interim financial statements.

The committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and circumstances. The committee should take appropriate actions to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices, and ethical behavior. The following shall be the principal duties and
responsibilities of the audit committee. These are set forth as a guide with the
understanding that the committee may supplement them as appropriate.

1. The committee shall be directly responsible for the appointment and
termination, compensation, and oversight of the work of the independent
auditors, including resolution of disagreements between management and the
auditor regarding financial reporting. The committee shall pre-approve all audit
and non-audit services provided by the independent auditors and shall not engage
the independent auditors to perform the specific non-audit services proscribed
by law or regulation. The committee may delegate pre-approval authority to a
member of the audit committee. The decisions of any audit committee member to
whom pre-approval authority is delegated must be presented to the full audit
committee at its next scheduled meeting.

2. At least annually, the committee shall obtain and review a report by the
independent auditors describing:

o The firm's internal quality control procedures.
o Any material issues raised by the most recent internal quality
control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within
the preceding five years, respecting one or more independent audits
carried out by the firm, and any steps taken to deal with any such
issues.
o All relationships between the independent auditor and the Company
(to assess the auditor's independence).

3. The committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits, including the
adequacy of staffing and compensation. Also, the committee shall discuss with
management, the internal auditors, and the independent auditors the adequacy and
effectiveness of the accounting and financial controls, including the Company's
policies and procedures to assess, monitor, and manage business risk, and legal
and ethical compliance programs (e.g., Company's Code of Conduct).

4. The committee shall meet separately periodically with management, the
internal auditors, and the independent auditors to discuss issues and concerns
warranting committee attention. The committee shall provide sufficient
opportunity for the internal auditors and the independent auditors to meet
privately with the members of the committee. The committee shall review with the
independent auditor any audit problems or difficulties and management's
response.

5. The committee shall receive regular reports from the independent auditor on
the critical policies and practices of the Company, and all alternative
treatments of financial information within generally accepted accounting
principles that have been discussed with management.

6. The committee shall review management's assertion on its assessment of the
effectiveness of internal controls as of the end of the most recent fiscal year
and the independent auditors' report on management's assertion.

7. The committee shall review and discuss earnings press releases, as well as
financial information and earnings guidance provided to analysts and rating
agencies.

8. The committee shall review the interim financial statements and disclosures
under Management's Discussion and Analysis of Financial Condition and Results of
Operations with management and the independent auditors prior to the filing of
the Company's Quarterly Report on Form 10-Q. Also, the committee shall discuss
the results of the quarterly review and any other matters required to be
communicated to the committee by the independent auditors under generally
accepted auditing standards. The chair of the committee may represent the entire
committee for the purposes of this review.

9. The committee shall review with management and the independent auditors the
financial statements and disclosures under Management's Discussion and Analysis
of Financial Condition and Results of Operations to be included in the Company's
Annual Report on Form 10-K (or the annual report to shareholders if distributed
prior to the filing of Form 10-K), including their judgment about the quality,
not just the acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the financial
statements. Also, the committee shall discuss the results of the annual audit
and any other matters required to be communicated to the committee by the
independent auditors under generally accepted auditing standards.

10. The committee shall establish procedures for the receipt, retention, and
treatment of complaints received by the issuer regarding accounting, internal
accounting controls, or auditing matters, and the confidential, anonymous
submission by employees of the issuer of concerns regarding questionable
accounting or auditing matters.

11. The committee shall receive corporate attorneys' reports of evidence of a
material violation of securities laws or breaches of fiduciary duty.

12. The committee also prepares its report to be included in the Company's
annual proxy statement, as required by SEC regulations.

13. The committee shall perform an evaluation of its performance at least
annually to determine whether it is functioning effectively.

MAGNITUDE INFORMATION SYSTEMS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 7, 2005

The undersigned, revoking any previous proxies relating to these shares,
hereby acknowledges receipt of the Notice and Proxy Statement dated November __,
2005 in connection with the Special Meeting of Stockholders to be held at 10
a.m. Eastern Standard Time on December 7, 2005 at the offices of Magnitude
Information Systems, Inc. 401 State Route 24, Chester, New Jersey 07930 and
hereby appoints Steven D. Rudnik and Joerg H. Klaube, and each of them (with
full power to act alone), the attorneys and proxies of the undersigned, with
power of substitution to each, to vote all shares of the Common Stock of
Magnitude Information Systems, Inc. registered in the name provided in this
Proxy which the undersigned is entitled to vote at the Special Meeting of
Stockholders, and at any adjournments of the Meeting, with all the powers the
undersigned would have if personally present at the Meeting. Without limiting
the general authorization given by this Proxy, the proxies are, and each of them
is, instructed to vote or act as follows on the proposals set forth in the
Proxy.

This Proxy when executed will be voted in the manner directed herein. If
no direction is made this Proxy will be voted FOR the election of the four
Directors and FOR Proposals 2 and 3.

In their discretion the proxies are authorized to vote upon such other
matters as may properly come before the Meeting or any adjournments of the
Meeting.

1. Election of two Directors

Proposal to elect Steven D. Rudnik, Steven Gray, Ivano Angelastri
and Joseph J. Tomasek as directors of the Company.

Steven D. Rudnik |_| FOR |_|WITHHOLD VOTE
Steven Gray |_| FOR |_|WITHHOLD VOTE
Ivano Angelastri |_| FOR |_|WITHHOLD VOTE
Joseph J. Tomasek |_| FOR |_|WITHHOLD VOTE

2. Proposal to amend the Company's Certificate of Incorporation to
increase the authorized common shares from 200,000,000 to 300,000,000.

|_| FOR |_| AGAINST |_| ABSTAIN

3. Proposal to ratify and approve the amendment to the Employment
Agreement of Steven D. Rudnik, the Company's President and Chief Executive
Officer.

|_| FOR |_| AGAINST |_| ABSTAIN

4. Proposal to ratify the appointment of Rosenberg Rich Baker Berman &
Company as the Company's independent registered public accounting firm for the
fiscal year ended December 31, 2005

|_| FOR |_| AGAINST |_| ABSTAIN

|X| Please mark votes as in this example.

The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.

Please sign exactly as name(s) appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

Signature: _______________ Date ________________

PLEASE CAST YOUR VOTE AS SOON AS POSSIBLE