As filed with the Securities and Exchange Commission on May 28, 2004
Registration No. 333-112145

================================================================================

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

AMENDMENT NO. 1
TO

FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

WORKSTREAM INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)

Canada N/A
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

495 March Road
Suite 300
Ottawa, Ontario, Canada K2K 3G1
(613) 270-0619
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(Address and telephone number of registrant's principal executive offices)

David Polansky
2600 Lake Lucien Drive
Suite 235
Maitland, FL 32751
(407) 475-5500
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(Name, address and telephone
number of agent for service)

with a copy to:

Michael A. Gerrior, Esquire Larry P. Laubach, Esquire
Perley-Robertson, Hill & McDougall LLP Cozen O'Connor
90 Sparks Street, 4th Floor 1900 Market Street
Ottawa, Ontario KIP1E2 Philadelphia, Pennsylvania 19103
(613) 238-2022 (215) 665-4666

Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of the registration statement.

If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

PROSPECTUS

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Subject to Completion, dated May 28, 2004

WORKSTREAM INC.

5,917,186 COMMON SHARES

This prospectus relates to the public offering, which is not being
underwritten, of 5,917,186 of our common shares, 4,937,174 of which are
outstanding and 980,012 of which may be issued as the result of the exercise of
warrants, held by certain shareholders of Workstream Inc. The prices at which
such shareholders may sell the shares will be determined by the prevailing
market price for the shares or in negotiated transactions. The selling
shareholders will receive all of the net proceeds from the sale of the common
shares. We will, however, receive the respective exercise price upon the
exercise of warrants which may occur prior to the sale of the underlying common
shares by a selling shareholder.

Our common shares are traded on the NASDAQ Small Cap Market under the
symbol "WSTM" and on the Boston Stock Exchange under the symbol "ERM." The last
reported sale price of the common shares on the NASDAQ Small Cap Market on May
25, 2004 was $2.80 per share.

__________________________________________

INVESTING IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. SEE THE "RISK
FACTORS" SECTION BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS YOU
SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON SHARES.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The date of this Prospectus is ______________

TABLE OF CONTENTS

Page
Forward-Looking Information................................................ 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 16
Selling Shareholders....................................................... 16
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
Incorporation of Certain Documents by Reference............................ 25
Where You Can Find More Information........................................ 25

__________________________

You should rely only on the information contained in or incorporated by
reference in this prospectus or any prospectus supplement that is delivered to
you. We have not authorized anyone to provide you with additional or different
information. You should not assume that the information contained in or
incorporated by reference into this prospectus or any prospectus supplement is
accurate at any date other than the date indicated on the cover page of this
prospectus or prospectus supplement.

FORWARD-LOOKING INFORMATION

The Securities and Exchange Commission (the "SEC") encourages companies
to disclose forward-looking information so that investors can better understand
a company's future prospects and make informed investment decisions. This
prospectus contains "forward-looking statements" as that term is defined in the
U.S. Private Securities Litigation Reform Act of 1995. Words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe,"
"will" and words and terms of similar substance typically indicate
forward-looking statements. All forward-looking statements are management's
present expectations of future events and are subject to a number of factors and
uncertainties, some of them being discussed under "Risk Factors" hereafter, that
could cause actual results to differ materially from those described in the
forward-looking statements.

You are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date they were made. Workstream Inc. is
not under any obligation, and expressly disclaims any obligation, to update or
alter any forward-looking statements, whether as a result of new information,
future events or otherwise. All subsequent forward-looking statements
attributable to Workstream Inc., its affiliates or any person acting on their
behalf are expressly qualified in their entirety by the cautionary statements
referred to in this section.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere or incorporated
by reference in this prospectus. This summary may not contain all the
information that may be important to you. You should read the entire prospectus
and the incorporated information before making an investment decision. Unless
the context requires otherwise, references to "we," "us" and "our" mean
Workstream Inc. and its subsidiaries. You should assume that all figures are
stated in U.S. dollars unless indicated otherwise.

DESCRIPTION OF WORKSTREAM INC.

We are a provider of services and Web-based software for Human Capital
Management ("HCM"). HCM is the process by which companies recruit, train,
evaluate, motivate and retain their employees. We offer software and services
that address the needs of companies to more effectively manage their human
capital management function. Our software provides a range of solutions for
their needs, including creating and managing job requisitions, advertising job
opportunities, tracking candidates, screening applicants, searching resumes,
operating customized career web sites, processing hiring information, creating
internal and external reports to evaluate the staffing process, evaluating
employee's job performance, and offering benefits that promote employee
retention. We also provide services through a web-site where job-seeking senior
executives can search job databases and post their resumes, and companies and
recruiters can post position openings and search for qualified senior executive
candidates. In addition, we offer recruitment research and outplacement
services. We believe that our "one-stop-shopping" approach for our clients' HCM
needs is more efficient and effective than traditional methods of human resource
management. We have 12 offices and approximately 170 employees across North
America.

Our principal executive offices are located at 495 March Road, Suite
300, Ottawa, Ontario, Canada K2K 3G1 and our telephone number is (613) 270-0619.

THE OFFERING

Stock Offered...................................... 5,917,186 common shares

Use of Proceeds.................................... We will not receive any proceeds from the sale of our common shares by
the selling shareholders. We will, however, receive the respective
exercise price upon the exercise of warrants which may occur prior to
the sale of the underlying common shares by a selling shareholder.
Assuming that all of the warrants covered by this prospectus are
exercised for cash, the aggregate amount of proceeds that we would
receive from the exercises of the warrants is $1,690,857.51. We will
use these proceeds for general corporate purposes.
NASDAQ Small Cap Market Symbol..................... WSTM

Boston Stock Exchange Symbol....................... ERM

RISK FACTORS

Investment in our securities involves certain elements of risk.
Investors should carefully consider the following factors, among others included
and incorporated by reference in this prospectus, before investing in the common
shares. The realization of these risks could result in a material adverse effect
on our results of operations, financial condition, cash flows, business or the
market for our common shares. We cannot assure you that we will successfully
address any of these risks or address them on a continuing basis.

We may not become profitable.

Since our inception, we have incurred losses which have been
substantial in relation to our operations. As of February 29, 2004, we had an
accumulated deficit of $36,591,197. We reported a net loss of $9,676,602 for the
year ended May 31, 2003 ("fiscal 2003") and a net loss of $4,628,753 for the
nine months ended February 29, 2004. Revenues for the nine months ended February
29, 2004 were $12,609,359. We acquired ten companies during the year ended May
31, 2002 ("fiscal 2002"), fiscal 2003 and the nine months ended February 29,
2004, six of which reported in the aggregate net losses of approximately $35.2
million in their immediately preceding fiscal years. Our ability to reduce our
losses will be adversely affected if we continue to acquire companies reporting
losses, if revenue grows slower than we anticipate or if operating expenses
exceed our expectations. Even if we do achieve profitability, we may not sustain
or increase profitability on a quarterly or annual basis. Failure to achieve or
maintain profitability would materially adversely affect the market price of our
common shares. We expect our operating expenses to continue to grow as we expand
our operations.

We may encounter difficulties with acquisitions, which could harm our business.

During the nine months ended February 29, 2004, fiscal 2003 and fiscal
2002, we made several acquisitions of other companies and businesses, as part of
our efforts to expand our operations and we may continue to make acquisitions of
complementary companies, products and businesses. The risks we may encounter in
acquisitions include:

o difficulty and expense of assimilating the operations and personnel of
acquired businesses;

o difficulty integrating the acquired technologies or products with our
current products and technologies;

o potential exposure to product liability or intellectual property liability
associated with the sale of the acquired company's products;

o diversion of management time and attention and other resources;

o loss of key employees and customers as a result of changes in management;

o difficulty and expense of managing an increased number of employees over
large geographic distances;

o our due diligence processes may fail to identify significant issues with
product quality, product architecture, and legal and financial
contingencies, among other things;

o potential exposure to unknown liabilities of acquired companies;

o the incurrence of amortization expenses;

o possible future goodwill impairment if the financial results and subsequent
forecasted financial results are lower than those estimated at the time of
the acquisition; and

o possible dilution to our shareholders.

In the past, we have acquired financially distressed businesses which
have lost customers prior to our acquisition due in part to their financial
instability. We may be unable to recover customers lost by financially
distressed businesses we have acquired. We have also frequently used our common
shares to pay the purchase price for acquisitions. Our common shares may not
remain at a price at which they can be used for acquisitions without further
diluting our existing shareholders, and potential acquisition candidates may not
view our stock attractively. We may not be successful in overcoming these risks
or any other problems encountered in connection with any acquisitions. These
difficulties may increase our expenses, and our ability to achieve profitability
may be adversely affected.

Michael Mullarkey, our Chairman, Chief Executive Officer and President, may have
interests that are different than other shareholders and may influence certain
actions.

As of May 25, 2004, Michael Mullarkey, our Chairman, Chief Executive
Officer and President, was our largest shareholder, beneficially owning
approximately 14% of our outstanding common shares. Mr. Mullarkey's interests as
our largest shareholder may conflict with his fiduciary duties as an officer and
director. Mr. Mullarkey's interests as our largest shareholder may influence how
Mr. Mullarkey votes on certain matters that require shareholder approval. As our
largest shareholder, Mr. Mullarkey may influence the outcome of various actions
that require shareholder approval including the election of our directors,
delaying or preventing a transaction in which shareholders might receive a
premium over the prevailing market price for their shares and preventing changes
in control or management.

The current economic downturn and future economic downturns may adversely affect
the demand for our services.

Historically, the general level of economic activity has significantly
affected the demand for employment and recruitment services. We believe that we
are currently experiencing the effects of the current economic downturn and as a
result the demand for our employment and recruitment services has decreased. If
the general level of economic activity continues to slow, our clients may not
require additional personnel and may delay or cancel plans that involve
recruiting new personnel using our services and technology. Consequently, the
time from initial contact with a potential client to the time of sale could
increase and the demand for our services could decline, resulting in a loss of
revenue harming our business, operating results and financial condition. In
addition, it is expected that in times of economic growth, demand for our
outplacement business may decline.

We may not be able to grow our client base and revenue because of competition
we face.

Our future success will depend to a large extent on our ability to grow
and maintain our client base and revenue. This requires that we offer services
that are superior to the services being offered by the competition that we face
and that we price our services competitively. The market for human capital
management, or HCM, services is highly fragmented and competitive, with
thousands of companies offering products or services that compete with one or
more of the services that we offer. We compete for a portion of employers'
recruiting budgets with many types of competitors, as employers typically
utilize a variety of sources for recruiting, including:

o traditional offline recruiting firms;

o traditional offline advertising, such as print media;

o resume processing companies;

o Web-based recruitment companies;

o Internet job posting companies; and

o client-server-based software services.

In addition, many employers are developing or may develop their own
software to satisfy their recruitment needs. We also compete with traditional
offline and Web-based outplacement service companies and human resource, or HR,
service providers. While we do not believe that any of our competitors offer the
full suite of services that we provide, there are a number of companies that
have products or services that compete with one or more of the services we
provide. For instance, companies that compete with our automated talent
acquisition services include Taleo Corporation (formerly RecruitSoft), Webhire
and Kenexa. Companies such as Monster Worldwide, Execunet and Netshare have
products or services that compete with our online exchange services. We also
compete with vendors of enterprise resource planning software, such as
PeopleSoft, Oracle, SAP and Performaworks. In the area of outplacement services,
we compete with companies such as McKenzie Scott and WSA Corp. Finally,
companies such as LifeCare, Next Jump and SparkFly compete with our employee
management and retention systems services.

We expect competition to increase and intensify in the future, with
increased price competition developing for our services. A number of our current
and potential competitors have longer operating histories and greater financial,
technical and marketing resources and name recognition than we do, which could
give them a competitive advantage. Our competitors may develop products or
services that are equal or superior to ours or that achieve greater market
acceptance than ours. It is also possible that new competitors may emerge and
rapidly acquire significant market share. As a result, we may not be able to
expand or maintain our market share and our ability to penetrate new markets may
be adversely affected.

If we experience client attrition, our operating results will be adversely
affected.

Our automated talent acquisition, online exchange and employee
management and retention systems services clients generally enter into
subscription agreements for terms of one year or less. These clients represented
40% of our revenue for fiscal 2003 and 49% of our revenue for the nine months
ended February 29, 2004. We have no assurance that these clients will maintain a
long-term relationship with us. If these clients fail to renew their
subscriptions with us, our business, revenues, operating results and financial
condition will be adversely affected. Since we have only been offering our
services for a limited period of time, we do not know what rate of client
attrition to expect. To the extent we experience significant client attrition,
we must attract additional clients to maintain revenue.

We may not be able to strengthen and maintain awareness of our brand name.

We believe that our success will depend to a large extent on our
ability to successfully develop, strengthen and maintain the recognition and
reputation of our Workstream brand name. In order to strengthen and maintain our
Workstream brand recognition and reputation, we invest and will need to continue
to invest substantial resources in our marketing efforts and maintain high
standards for actual and perceived quality, usefulness, reliability, security
and ease of use of our services. If we fail to successfully promote and maintain
our Workstream brand name, particularly after incurring significant expenses in
promoting our Workstream brand name, or encounter legal obstacles which prevent
our continued use of our Workstream brand name, our business, operating results
and financial condition could be materially adversely affected and the market
price of our common shares could decline. Moreover, even if we continue to
provide quality service to our clients, factors outside of our control,
including actions by organizations that are mistaken for us and factors
generally affecting our industry, could affect our Workstream brand and the
perceived quality of our services.

Our success will depend on our ability to enter into strategic relationships
with third parties.

If we are unable to enter into successful strategic relationships, our
business will suffer. We must maintain our existing relationships with job
posting boards and other on-line recruitment services and enter into additional
similar relationships to continue to offer an attractive service to our clients.
Because many of these third parties compete with each other, the existence of a
relationship with any particular third party may limit or preclude us from
entering into a relationship with that third party's competitors. In addition,
some of the third parties with which we seek to enter into relationships may
view us as a competitor and refuse to do business with us. Any loss of an
existing relationship or failure to establish new relationships may adversely
affect our ability to improve our services, offer an attractive service in the
new markets that we enter, or expand the distribution of our services.

We may not be able to continue to expand our business in the United States
market.

Until the fiscal year ended May 31, 2001, we marketed our services
primarily in Canada. Since that time, we completed several acquisitions of
businesses in the United States. Through these acquisitions we endeavored to
enhance our business by penetrating the United States market. Our success and
ability to grow our business will depend to a significant degree on our ability
to market our services successfully in the United States. We expect to continue
to expand our operations through acquisitions of U.S.-based companies. If we are
unable to maintain or expand our U.S. operations, we may suffer increasing
losses and the loss of our investment, in whole or in part, in our acquisitions.
This could materially adversely affect our business, operating results and
financial condition.

Because we have international operations, we may face special economic and
regulatory challenges that we may not be able to meet.

Beginning in fiscal 2002, we completed several acquisitions of
businesses in the United States and began marketing our services outside of
Canada. We expect to continue to expand our U.S. and Canadian operations through
acquisitions and to spend significant financial and managerial resources to do
so. We have limited experience in international operations and may not be able
to compete successfully in international markets. Our international operations
are subject to certain risks, including:

o changes in regulatory requirements, tariffs and trade barriers;

o changes in diplomatic and trade relationships;

o potentially adverse tax consequences;

o the impact of recessions in economies outside of Canada;

o the burden of complying with a variety of foreign laws and regulations, and
any unexpected changes therein;

o political or economic constraints on international trade or instability;
and

o fluctuations in currency exchange rates.

We may lose business if we are unable to successfully develop and introduce new
products, services and features.

If we are unable to develop and introduce new products, services, or
enhancements to, or new features for, existing products or services, in a timely
and successful manner, we may lose sales opportunities. The market for our
services is characterized by rapid and significant technological advancements,
the introduction of new products and services, changes in client demands and
evolving industry standards. The adoption of new technologies or new industry
standards may render our products obsolete and unmarketable. The process of
developing new services or technologies is complex and requires significant
continuing efforts. We may experience difficulties or funding shortages that
could delay or prevent the successful development, introduction and sale of
enhancements or new products and services. Moreover, new products, services or
features which we introduce may not adequately address the needs of the
marketplace or achieve significant market acceptance.

Our business could suffer if financing is not available when required or is not
available on acceptable terms.

Our future capital requirements depend on a number of factors,
including our ability to generate positive cash flow, cash required by future
acquisitions, anticipated capital expenditures, the development of new services
or technologies and our projected operations. We believe that we have sufficient
credit facilities, cash flow from operations and cash reserves, which, together
with further cost reductions, will permit us to meet our working capital
requirements and capital expenditure requirements through at least April 30,
2005. However, it is possible that we may need to raise additional funds sooner
than expected in order to fund expansion, develop new, and enhance existing,
services or acquire complementary businesses or technologies or if our revenues
are less or our expenses are greater than we expect. Our ability to obtain
financing depends on a number of factors, including our ability to generate
positive cash flow from operations, the amount of our cash reserves, the amount
and terms of our existing debt arrangements, the availability of sufficient
collateral and the prospects of our business. If financing is not available when
required or is not available on acceptable terms, we may not be able to:

o keep up with technological advances;

o pursue acquisition opportunities;

o develop product enhancements;

o make capital expenditures;

o respond to business opportunities;

o address competitive pressures or adverse industry developments; or

o withstand economic or business downturns.

Future financing may be on terms adverse to your interests.

In the past we have issued and, in the future we may issue, equity or
convertible debt securities to raise additional funds. Since May 31, 2003, we
have issued common shares and securities that are convertible into common shares

amounting to a total of 10,001,053 common shares, including 2,424,999 common
shares that were issued upon conversion of our 8% Senior Subordinated
Convertible Notes that were originally sold in April and May 2002, resulting in
a 47% increase in the number of outstanding common shares (assuming the
conversion of the convertible securities). If we issue additional securities,
our existing shareholders may be further diluted and holders of those new
securities may have dividend, liquidation, voting and other rights senior to
those of the holders of our common shares.

The power of our board of directors to designate and issue shares of stock could
have an adverse effect on holders of our common shares.

We are authorized to issue an unlimited number of common shares, which
may be issued by our board of directors for such consideration as they may
consider sufficient without seeking shareholder approval. The issuance of
additional common shares in the future will reduce the proportionate ownership
and voting power of current shareholders. Our Articles of Incorporation also
authorize us to issue an unlimited number of Class A Preferred Shares, the
rights and preferences of which may be designated by our board of directors
without shareholder approval. The designation and issuance of Class A Preferred
Shares in the future could create additional securities that would have
dividend, liquidation and voting preferences prior in right to the outstanding
common shares. These provisions could also impede a change of control.

If we are characterized as a passive foreign investment company, our U.S.
shareholders may suffer adverse tax consequences.

We believe that we were not a passive foreign investment company for
U.S. federal income tax purposes for fiscal years 2001, 2002 and 2003.
Generally, we may be characterized as a passive foreign investment company for
U.S. federal income tax purposes if for any taxable year 75% of our gross income
is passive income, or at least 50% of our assets are held for the production of,
or produce, passive income. This characterization could result in adverse U.S.
tax consequences to our shareholders. These consequences may include having
gains realized on the sale of our common shares treated as ordinary income,
rather than capital gain income, and having potentially punitive interest
charges apply to the proceeds of share sales. U.S. shareholders should consult
with their own U.S. tax advisors with respect to the U.S. tax consequences of
investing in our common shares.

Our business could be adversely affected if we are unable to protect our
proprietary technologies.

Our success depends to a significant degree upon the protection of our
proprietary technologies and brand names. The unauthorized reproduction or other
misappropriation of our proprietary technologies could provide third parties
with access to our technologies without payment. If this were to occur, our
proprietary technologies would lose value and our business, operating results
and financial condition could be materially adversely affected. We rely upon a
combination of copyright, trade secret and trademark laws and non-disclosure and

other contractual arrangements to protect our proprietary rights. The measures
we have taken to protect our proprietary rights, however, may not be adequate to
deter misappropriation of proprietary information or protect us if
misappropriation occurs. Policing unauthorized use of our technologies and other
intellectual property is difficult, particularly because of the global nature of
the Internet. We may not be able to detect unauthorized use of our proprietary
information and take appropriate steps to enforce our intellectual property
rights. If we resort to legal proceedings to enforce our intellectual property
rights, the proceedings could be burdensome and expensive and could involve a
high degree of risk.

Third parties could claim that we infringe upon their proprietary technologies.

Our products, services, content and brand names may be found to
infringe valid copyrights, trademarks or other intellectual property rights held
by third parties. In the event of a successful infringement claim against us and
our failure or inability to modify our technologies or services, develop
non-infringing technology or license the infringed or similar technology, we may
not be able to offer our services. Any claims of infringement, with or without
merit, could be time consuming to defend, result in costly litigation, divert
management attention, require us to enter into costly royalty or licensing
arrangements, modify our technologies or services or prevent us from using
important technologies or services, any of which could harm our business,
operating results and financial condition.

We may become subject to burdensome government regulation which could increase
our costs of doing business, restrict our activities and/or subject us to
liability.

Uncertainty and new regulations relating to the Internet could increase
our costs of doing business, prevent us from providing our services, slow the
growth of the Internet or subject us to liability, any of which could adversely
affect our business, operating results and prospects. In addition to new laws
and regulations being adopted, existing laws may be applied to the Internet.
There are currently few laws and regulations directly governing access to, or
commerce on, the Internet. However, due to the increasing popularity and use of
the Internet, the legal and regulatory environment that pertains to the Internet
is uncertain and continues to change. New and existing laws may cover issues
which include:

o user privacy;

o pricing controls;

o consumer protection;

o libel and defamation;

o copyright and trademark protection;

o characteristics and quality of services;

o sales and other taxes; and

o other claims based on the nature and control of Internet materials.

Recently, the Canadian Federal Government enacted privacy legislation
which requires us to appoint an individual responsible for the administration of
personal information, to implement policies and practices to protect personal
information, to provide access to information and to deal with complaints. We
must obtain individual consents for each collection, use or retention of
personal information. We recently implemented procedures to comply with this new
privacy legislation. The privacy legislation increases our cost of doing
business due to the administrative burden of these laws, restricts our
activities in light of the consent requirement and potentially subjects us to
monetary liability for breach of these laws.

Computer viruses or software errors may disrupt our operations, subject us to a
risk of loss and/or expose us to liability.

Computer viruses may cause our systems to incur delays or other service
interruptions. In addition, the inadvertent transmission of computer viruses or
software errors in new services or products not detected until after their
release could expose us to a material risk of loss or litigation and possible
liability. Moreover, if a computer virus affecting our system is highly
publicized or if errors are detected in our software after it is released, our
reputation and brand name could be materially damaged and we could lose clients.

We may experience reduced revenue, loss of clients and harm to our reputation
and brand name in the event of system failures.

We may experience reduced revenue, loss of clients and harm to our
reputation and brand name in the event of unexpected network interruptions
caused by system failures. Our servers and software must be able to accommodate
a high volume of traffic. If we are unable to add additional software and
hardware to accommodate increased demand, we could experience unanticipated
system disruptions and slower response times. Although our systems have been
designed based on industry-standard architectures to reduce downtime in the
event of outages, they remain vulnerable to damage or interruption from
earthquakes, floods, fires, power loss, telecommunication failures, terrorist
attacks, computer viruses and similar events. Some of our systems are not fully
redundant, and our disaster recovery planning is not sufficient for all
eventualities. We have experienced delays in providing our customers access to
their data in the past, and we believe these system interruptions will continue
to occur from time to time in the future. Any catastrophic failure at our
network operations center could prevent us from serving our clients for a number
of days, or possibly weeks, and any failure of our Internet service provider may
adversely affect our network's performance. Most of our system interruptions are
due to heavy Internet traffic and minor equipment failures which generally
result in our customers being unable to access their data for a few seconds or
several minutes. However, in September 2003, our Internet service provider
suffered a failure which resulted in our customers being unable to access our
network and their data for a period of 25 hours. Our clients may become
dissatisfied by any system failure that interrupts our ability to provide our
services to them or results in slower response times. Our subscription
agreements generally provide that our customers will be able to access to their
data during certain guaranteed times. If we materially breach our obligations
under our subscription agreements, the customer can terminate their agreement
with us. Our business interruption insurance may not adequately compensate us
for any losses that may occur due to any failures in our system or interruptions
in our services.

Breaches of our network security could be costly.

If unauthorized persons penetrate our network security, they could
misappropriate proprietary information or cause interruptions in our services.
We may be required to spend capital and resources to protect against or to
alleviate these problems. In addition, because we host data for our clients, we
may be liable to any of those clients that experience losses due to our security
failures. As a result, security breaches could have a material adverse effect on
our business and the market price of our common shares may decline.

Our business may be adversely affected if Internet service providers fail to
provide satisfactory service to our clients to enable them to use our services
and access job seeker candidates on-line.

Failure of Internet service providers or on-line service providers to
provide access to the Internet to our clients and job seekers would prevent them
from accessing our Web board, which would cause our business to suffer. Many of
the Internet service providers, on-line service providers and other Web site
operators on which we depend have experienced significant service slowdowns,
malfunctions, outages and capacity limitations. If users experience difficulties
using our services due to the fault of third parties, our reputation and brand
name could be harmed.

Failure of the Internet infrastructure to support current and future user
activity may adversely affect our business.

We cannot assure you that the Internet infrastructure will continue to
effectively support the demands placed on it as the Internet continues to
experience increased numbers of users, greater frequency of use and increased
bandwidth requirements of users. In the past, the Internet has experienced a
variety of outages and other delays. The Internet is also subject to actions of
terrorists or hackers who may attempt to disrupt specific web sites or Internet
traffic generally. Any future outages or delays could affect the willingness of
employers to use our on-line recruitment offerings and of job seekers to post
their resumes on the Internet. If any of these events occur, our business,
operating results and financial condition could be materially adversely
affected.

We may not expand and upgrade our systems and hardware in a timely manner in
order to accommodate growth in our business, which could adversely affect
our business.

We must expand and upgrade our systems and network hardware in order to
accommodate growth in our business. We may not plan any such expansion and
upgrades in a timely manner to satisfy actual growth in our business. If we do
not expand and upgrade our systems and network hardware in a timely manner to
accommodate any growth in our business, our business, financial condition and
operating results could be adversely affected.

The resale of common shares pursuant to this registration statement could
depress the market for our common shares.

As a result of our registration of the resale of common shares under
this registration statement, 5,917,186 common shares out of a total of
30,581,620 common shares outstanding (assuming that all of the warrants covered
by this prospectus are exercised) which would not otherwise be immediately
resaleable may be resold upon the effectiveness of this registration statement.
We cannot predict the effect, if any, that the resale of these additional
securities or the availability of these additional securities for resale will
have on the market prices of our common shares prevailing from time to time.

Our common shares have traded at prices below $1.00 and could be subject to
delisting by NASDAQ.

Our common stock currently trades on the NASDAQ Small Cap Market and
the Boston Stock Exchange. Under the NASDAQ requirements, a stock can be
delisted and not allowed to trade on the NASDAQ if the closing bid price of the
stock over a 30 consecutive trading-day period is less than $1.00. The Boston
Stock Exchange, however, does not maintain a similar minimum price requirement.
During the fourth quarter of fiscal 2003, our common stock failed to meet the
NASDAQ minimum bid price requirement because the closing bid price for 30
consecutive trading days was below $1.00. On May 20, 2003, NASDAQ gave us notice
of this fact and gave us six months to cure this problem or our common stock
would be delisted. On July 8, 2003, NASDAQ gave us notice that we regained
compliance with the minimum bid price rule because the closing bid price of our
common shares had been $1.00 or more for at least 10 consecutive trading days.
No assurance can be given that the closing bid price of our common shares will
continue to satisfy the NASDAQ minimum bid price requirements and thus continue
to trade on the NASDAQ Small Cap Market. Although our common shares may remain
listed on the Boston Stock Exchange, if our common shares are delisted from the
NASDAQ Small Cap Market, there may be a limited market for our shares, trading
our stock may become more difficult and our share price could decrease even
further. If our common shares are not listed on a national securities exchange
or NASDAQ, potential investors may be prohibited from or be less likely to
purchase our common shares, limiting the trading market for our stock even
further.

We may become subject to the SEC's penny stock rules, which may decrease the
liquidity of our common shares and negatively impact the ability of purchasers
of our common shares to sell our common shares in the secondary market.

SEC regulations generally define a penny stock as an equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions. We are not currently subject to the penny stock rules because our
common shares qualify for two separate exceptions to the SEC's penny stock
rules. The first exception from the penny stock rules for which we qualify is an
exception for companies that have an equity security that is quoted on the
NASDAQ Stock Market. Since our common shares are traded on the NASDAQ Small Cap
Market, we are not subject to the penny stock rules. The second exception from
the penny stock rules for which we qualify is an exception for companies that
have an average revenue of at least $6,000,000 for the last three years. Our
revenue for fiscal 2003, fiscal 2002 and fiscal 2001 was $17,836,990,
$14,751,620 and $1,991,971, respectively, resulting in an average revenue of
$11,526,860. If our common shares are delisted or removed from the NASDAQ Small
Cap Market and if we fail to meet the average revenue exception to the penny
stock rules, our common shares may become subject to the penny stock rules,
which impose additional sales practice requirements on broker-dealers who sell
our common shares. For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchaser of such
securities and have received the purchaser's written agreement to the
transaction prior to purchase. In addition, unless an exception is available,
the regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks
associated with it. If our common shares were considered penny stock, the
ability of broker-dealers to sell our common shares and the ability of our
shareholders to sell their securities in the secondary market would be limited.
As a result, the market liquidity for our common shares would be severely and
adversely affected. We cannot assure you that trading in our securities will not
be subject to these or other regulations in the future which would negatively
affect the market for our common shares.

The price of our common shares historically has been volatile, which may make it
more difficult for you to resell our common shares when you want at prices you
find attractive.

The market price of our common shares has been highly volatile in the
past, and may continue to be volatile in the future. For example, since June 1,
2002, the closing sale price of our common shares on the NASDAQ Small Cap Market
has fluctuated between $0.81 and $3.99 per share. The following factors may
significantly affect the market price of our common shares:

o quarterly variations in our results of operations;

o announcement of new products, product enhancements, joint ventures and
other alliances by our competitors or us;

o technological innovations by our competitors or us;

o general market conditions or market conditions specific to particular
industries; and

o the operating and stock price performance of other companies that investors
may deem comparable to us.

In addition, the stock market in general, and the market prices for
Internet-related companies in particular, have experienced extreme volatility
that often has been unrelated to the operating performance of such companies.
These broad market and industry fluctuations may adversely affect the price of
our common shares, regardless of our operating performance. (See Risk Factor
"Our common shares have traded at prices below $1.00 and could be subject to
delisting by NASDAQ.")

The use of performance-based payment provisions in our acquisitions may result
in costly legal proceedings.

We often require that a portion of the total purchase price in our
acquisitions be contingent upon the acquired company's achievement of certain
performance-based milestones. We believe that the use of contingent
performance-based payment provisions more closely matches the price we pay with
the value we receive. However, the use of these provisions has resulted and may
continue to result in disputes over whether the performance-based milestones
have been achieved. Resolving these disputes could result in costly legal
proceedings and divert management attention.

We depend on our key employees to manage our business effectively, and if we are
unable to retain our key employees, our business may be adversely affected.

Our success depends on the efforts, abilities and expertise of our
senior management and other key employees, including in particular, Michael
Mullarkey, our President and Chief Executive Officer, and David Polansky, our
Chief Financial Officer. There can be no assurance that we will be able to
retain our key employees. In 2003, Andrew Hinchliff, our Senior Vice President
North American Sales, Arthur Halloran, our President and Chief Operating
Officer, and Paul Haggard, our Chief Financial Officer, resigned from their
respective positions with us. Mr. Halloran, however, continues to serve as a
member of our board of directors. While we have hired new or appointed existing
employees to fulfill the duties previously performed by Messrs. Hinchliff,
Halloran and Haggard, if any of our key employees leave before suitable
replacements are found, there could be an adverse effect on our business. There
can be no assurance that suitable replacements could be hired without incurring
substantial additional costs, or at all.

USE OF PROCEEDS

All of the net proceeds from the sale of our common shares by the
selling shareholders will go to them upon the sale of such shares. Accordingly,
we will not receive any proceeds from the sales of our common shares by the
selling shareholders. We will, however, receive the respective exercise price
upon the exercise of warrants which may occur prior to the sale of the
underlying common shares by a selling shareholder. Assuming that all of the
warrants covered by this prospectus are exercised for cash, the aggregate amount
of proceeds that we would receive from the exercises of the warrants is
$1,690,587.51. We will use these proceeds for general corporate purposes.

SELLING SHAREHOLDERS

The selling shareholders are not under any obligation to sell all or
any portion of their common shares, nor are the selling shareholders obligated
to sell any of their common shares immediately under this prospectus. We cannot
estimate the number of the common shares that will be held by the selling
shareholders after completion of this offering. However, for the purposes of the
table below, we have assumed that, after completion of this offering, none of
the common shares covered by this prospectus will be held by the selling
shareholders.

The following table provides certain information with respect to the
common shares beneficially owned by the selling shareholders as of May 25, 2004.
This information is based on information provided to us by the selling
shareholders. Except as noted in the footnotes below, no selling shareholder has
had a material relationship, or has held any position or office, with us or any
of our predecessors or affiliates within the last three years. For purposes of
presenting beneficial ownership data in the table, we have assumed that no
selling shareholder acquires additional common shares after the date on the
cover page of this prospectus.

Shares Beneficially Owned Prior to Shares Beneficially
Offering Shares to be Offered Owned After Offering
---------------------------------- -------------------- -----------------------
Selling Shareholders Number Percent(1) Number Number Percent(1)
- -------------------- ------ ---------- ------ ------ ----------

Pequot Capital Management,
Inc. (2) 1,250,000 4.22% 1,000,000 250,000 *

Sands Brothers Venture
Capital III LLC (3) 878,306 (4) 2.95% 34,025 844,281 2.83%

Nathan Low (5) 766,873 (6) 2.58% 514,873 252,000 *

AGF Growth Equity Fund (7) 660,400 2.23% 660,400 -- --

Smithfield Fiduciary LLC (8) 625,000 2.11% 625,000 -- --

Sands Brothers Venture
Capital IV LLC (3) 481,722 (11) 1.62% 5,820 475,902 1.60%

Crestview Capital Fund L.P.
and its affiliates (9) 482,929 (10) 1.61% 482,929 -- --

BTR Global Arbitrage Trading
Limited (12) 468,750 1.58% 468,750 -- --

Michael Weiss 399,999 (13) 1.35% 399,999 -- --

Casurina Limited Partnership
(14) 251,875 * 251,875 -- --

Standard Securities Capital
Corporation (15) 250,000 (16) * 250,000 -- --

Northern Rivers Innovation
Fund (17) 192,500 * 192,500 -- --

HJG Partnership (18) 125,000 * 125,000 -- --

IG AGF Canadian Diversified
Growth Fund (7) 122,100 * 122,100 -- --

Romeo DiBattista 109,875 * 109,875 -- --

Casurina Performance Fund (14) 98,125 * 98,125 -- --

London Life Growth Equity
Fund (7) 97,500 * 97,500 -- --

Gilad Ottensoser 87,000 (19) * 80,000 7,000 *

Sands Brothers & Co. LTD (3) 82,540 (20) * 4,540 78,000 *

DGM Bank & Trust Inc. (21) 71,875 * 71,875 -- --

Front Street Investment
Management Inc. (14) 65,625 * 65,625 -- --

GWL Growth Equity Fund (7) 55,800 * 55,800 -- --

Delf Investment &
Construction Inc. (22) 31,250 * 31,250 -- --

Nadal Investments Limited (23) 28,875 * 28,875 -- --

Front Street Canadian Hedge
(14) 28,125 * 28,125 -- --

1120288 Ontario Ltd. (24) 21,875 * 21,875 -- --

Legend Merchant Group, Inc.
(25) 20,000 (26) * 20,000 -- --

Delta One Northern Rivers
Fund (27) 19,250 * 19,250 -- --

Blumont Strategic
Partnership (14) 18,750 * 18,750 -- --

Bernard Zaionz 12,500 * 12,500 -- --

Charles Zaionz 12,500 * 12,500 -- --

Hedda Zaionz 6,250 * 6,250 -- --

IG AGF CDN Diversified Growth
Class (7) 1,200 * 1,200 -- --
--------- ----- --------- --------- ----
Total 7,824,369 (28) 25.27% 5,917,186 1,907,183 6.36%

- ----------
* Less than 1%.

(1) This information is based on 29,575,912 common shares outstanding
as of May 25, 2004, including 373,625 common shares held in escrow
under acquisition agreements. We have computed "beneficial
ownership" in accordance Rule 13d-3 promulgated by the SEC under
the Securities Exchange Act of 1934 for purposes of this table.
Therefore, the table reflects a person as having "beneficial
ownership" of common shares if such person has the right to
acquire such shares within 60 days of May 25, 2004. For purposes
of computing the percentage of outstanding common shares held by
each person or group of persons named above, we have assumed to be
outstanding any security which such person or persons has or have
the right to acquire within that 60-day period. However,
securities that may be acquired within that 60-day period are not
deemed to be outstanding for purposes of computing the percentage
ownership of any other person.

(2) Consists of common shares held of record by Pequot Scout Fund,
L.P., Pequot Navigator Onshore Fund, L.P. and Pequot Navigator
Offshore Fund, Inc. Pequot Capital Management, Inc. is the
investment manager of Pequot Scout Fund, L.P. and Pequot Navigator
Onshore Fund, L.P. and is the investment advisor of Pequot
Navigator Offshore Fund, Inc., and consequently has voting control
and dispositive power over the common shares held by Pequot Scout
Fund, L.P., Pequot Navigator Onshore Fund, L.P. and Pequot
Navigator Offshore Fund, Inc. Arthur Samberg and Mark Broach
control Pequot Capital Management, Inc. Arthur Samberg and Mark
Broach disclaim beneficial ownership of the common shares held by
Pequot Scout Fund, L.P., Pequot Navigator Onshore Fund, L.P. and
Pequot Navigator Offshore Fund, Inc., except to the extent of
pecuniary interest.

(3) Mike Caska has voting control and dispositive power over the
securities held by Sands Brothers Venture Capital IV LLC, Sands
Brothers Venture Capital III LLC and Sands Brothers & Co. LTD.
Mike Caska disclaims beneficial ownership of the securities held
by Sands Brothers Venture Capital IV LLC, Sands Brothers Venture
Capital III LLC and Sands Brothers & Co. LTD. Sands Brothers
Venture Capital IV LLC and Sands Brothers Venture Capital III LLC
are affiliates of registered broker-dealers, and Sands Brothers &
Co. LTD is a registered broker-dealer.

(4) Includes 211,640 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $2.00 per common share and
expire in April 2007.

(5) Nathan Low is the president and sole shareholder of Sunrise
Securities Corporation, a registered broker-dealer. Sunrise
Securities Corporation acted as our placement agent in connection
with the sale of 1,625,000 common shares to certain investors in
the United States. In consideration for its services, we agreed to
issue Sunrise Securities Corporation or its designee warrants to
purchase 162,500 common shares at an exercise price of $1.60 per
common share. We also agreed to pay Sunrise Securities Corporation
a commission of $260,000, of which $100,000 was paid by the
issuance of 62,500 common shares. Sunrise Securities Corporation
directed that the warrants and 62,500 common shares be issued to
Nathan Low as its designee. In December 2003 we entered into a
consulting agreement with Nathan Low, whereby we agreed to issue
100,000 common shares to him in consideration of his providing
consulting services to us.

(6) Includes 162,500 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $1.60 per common share and
expire in December 2008. Also includes 189,873 common shares held
by the Nathan A. Low Family Trust. Lisa Low is the trustee of the
Nathan A. Low Family Trust and has voting control and dispositive
power over the common shares held by the Nathan A. Low Family
Trust. Nathan Low disclaims beneficial ownership of the 189,873
common shares held by the Nathan A. Low Family Trust.

(7) W.R. Farquharson has voting control and dispositive power over the
common shares held by AGF Grown Equity Fund, IG AGF Canadian
Diversified Growth Fund, London Life Growth Equity Fund, GWL
Growth Equity Fund and IG AGF CDN Diversified Growth Class.

(8) Highbridge Capital Management, LLC is the trading manager of
Smithfield Fiduciary LLC and consequently has voting control and
investment discretion over securities held by Smithfield Fiduciary
LLC. Glenn Dubin and Henry Swieca control Highbridge Capital
Management. Highbridge Capital Management, Glenn Dubin and Henry
Swieca disclaim beneficial ownership of the common shares held by
Smithfield Fiduciary LLC. Smithfield Fiduciary LLC is an affiliate
of a registered broker-dealer.

(9) Stewart Flink and Richard Levy have voting control and dispositive
power over the securities held by Crestview Capital Fund, L.P. and
its affiliates, Crestview Capital Fund II, L.P. and Crestview
Capital Offshore Fund, Inc. Stewart Flink and Richard Levy
disclaim beneficial ownership of the securities held by Crestview
Capital Fund, L.P., Crestview Capital Fund II, L.P. and Crestview
Capital Offshore Fund, Inc. Crestview Capital Fund, L.P. and its
affiliates, Crestview Capital Fund II, L.P. and Crestview Capital
Offshore Fund, Inc., are affiliates of a registered broker-dealer.

(10) Includes 312,179 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $2.00 per common share and
expire in May 2007.

(11) Includes 105,820 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $2.00 per common share and
expire in April 2007.

(12) Danny Guy, Boris Stein and Morton Piateski have voting control and
dispositive power over the common shares held by BTR Global
Arbitrage Trading Limited. Danny Guy, Boris Stein and Morton
Piateski disclaim beneficial ownership of the common shares held
by BTR Global Arbitrage Trading Limited.

(13) Includes 133,333 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $1.50 per common share and
expire in May 2007.

(14) Gary Selke, Frank Mersch, David Conway and Norm LaMarche have
voting control and dispositive power over the common hares held by
Casurina Limited Partnership, Casurina Performance Fund, Front
Street Investment Management Inc., Front Street Canadian Hedge and
Blumont Strategic Partnership.

(15) Mark Marcello has voting control and dispositive power over the
securities held by Standard Securities Capital Corporation.
Standard Securities Capital Corporation acted as our placement
agent in connection with the sale of 2,500,000 common shares to
certain investors in Canada. In consideration for its services, we
agreed to issue Standard Securities Capital Corporation warrants
to purchase 250,000 common shares at an exercise price of $1.60
per common share. We also agreed to pay Standard Securities
Capital Corporation a cash commission of $280,000.

(16) Consists of 250,000 common shares issuable upon exercise of
warrants. The warrants have an exercise price of $1.60 per common
share and expire in December 2005.

(17) Christine Blakely has voting control and dispositive power over
the common shares held by Northern Rivers Innovation Fund.
Christine Blakely disclaims beneficial ownership of the common
shares held by Northern Rivers Innovation Fund.

(18) Howard Fialkov and Gerry Fialkov have voting control and
dispositive power over the common shares held by HJG Partnership.

(19) Includes 80,000 common shares issuable upon exercise of warrants.
40,000 common shares are exercisable at a price of $1.50 per
common share and 40,000 common shares are exercisable at a price
of $1.75 per common share. The warrants expire in December 2005.
The warrants to acquire an aggregate of 80,000 common shares were
acquired from Legend Merchant Group, Inc. Gilad Ottensoser is an
affiliate of Legend Merchant Group, Inc., a registered
broker-dealer.

(20) Consists of 82,540 common shares issuable upon exercise of
warrants. The warrants have an exercise price of $2.00 per common
share. The warrant to purchase 52,905 common shares expires in
April 2007 and the warrant to purchase 29,635 common shares
expires in May 2007.

(21) Kieran Young has voting control and dispositive power over the
common shares held by DGM Bank & Trust Inc. Kieran Young disclaims
beneficial ownership of the common shares held by DGM Bank & Trust
Inc.

(22) Domenic Valsi has voting control and dispositive power over the
common shares held by Delf Investment & Construction Inc.

(23) Miles Nadal has voting control and dispositive power over the
common shares held by Nadal Investments Limited.

(24) Gary Carl Uchikura and Christine Uchikura have voting control and
dispositive power over the common shares held by 1120288 Ontario
Ltd.

(25) David Unsworth has voting control and dispositive power over the
securities held by Legend Merchant Group, Inc. In December 2003,
we issued to Legend Merchant Group, Inc. a warrant to purchase
50,000 common shares at an exercise price of $1.50 per share, and
a warrant to purchase an additional 50,000 common shares at an
exercise price of $1.75 per share. This issuance of the warrants
was made in exchange for business advisory services to be provided
to us over a period of 12 months by Legend Merchant Group, Inc.
Legend Merchant Group, Inc. is a registered broker-dealer.

(26) Consists of 20,000 common shares issuable upon exercise of
warrants. 10,000 common shares are exercisable at a price of $1.50
per common share and 10,000 common shares are exercisable at a
price of $1.75 per common share. The warrants expire in December
2005.

(27) Scott Walters has voting control and dispositive power over the
common hares held by Delta One Northern Rivers Fund. Scott Walters
disclaims beneficial ownership of the common shares held by Delta
One Northern Rivers Fund.

(28) Includes 1,358,012 common shares issuable upon exercise of
warrants.

PLAN OF DISTRIBUTION

The common shares which may be sold by the selling shareholders and any
of their pledgees, donees, transferees or other successors-in-interest, may be
disposed of from time to time in one or more transactions, which may involve:

o ordinary brokerage transactions and transactions in which
the broker solicits purchasers;

o sales on the NASDAQ Small Cap Market, Boston Stock
Exchange, or any other principal market on which the common shares trade at the
time of sale, including directly with a market maker acting as principal;

o privately-negotiated transactions, which include direct
sales to purchasers and sales effected through agents;

o a block trade in which the broker or dealer will attempt
to sell the common shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

o purchases by a broker or dealer as principal and resale by
that broker or dealer for its own account;

o an exchange distribution in accordance with the rules of
that exchange or transactions in the over-the-counter market;

o short sales;

o the pledge of the security for any loan or obligation,
including pledges to brokers or dealers who may, from time to time, themselves
sell or transfer the common shares or their interest in such securities;

o the transfer of the common shares by the selling
shareholders to their partners, members or shareholders;

o a combination of any of the above; or

o any other method permitted by applicable law.

The sale price of the common shares pursuant to this prospectus may be:

o a fixed price;

o the market price prevailing at the time of sale;

o a price related to such prevailing market price;

o a negotiated price; or

o at any other prices as the selling shareholders may
determine, including sales below the market price.

The selling shareholders may engage broker-dealers to participate in
the sales. Such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling shareholders
and/or the purchasers of the shares for whom broker-dealers may act as agent or
to whom they may sell as principals or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions).

In addition, the selling shareholders may enter into hedging
transactions with broker-dealers who may engage in short sales of our common
shares in the course of hedging the positions they assume with the selling
shareholders. The selling shareholders may also enter into option or other
transactions with broker-dealers that require the delivery to such
broker-dealers of our common shares, which shares may be resold thereafter
pursuant to this prospectus.

The common shares covered by this prospectus may also be sold in
private transactions pursuant to Rule 144 under the Securities Act of 1933,
rather than pursuant to this prospectus. The selling shareholders have the sole
and absolute discretion not to accept any purchase offer or make any sale of the
common shares if they deem the purchase price to be unsatisfactory at any
particular time.

In order to comply with the securities laws of certain states, if
applicable, our common shares may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, our
common shares may not be sold unless such shares have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.

Under certain circumstances, the selling shareholders and any
broker-dealers that act in connection with the sales of the shares may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act
of 1933, and any commissions received by them and any profit on the sale of the
shares as principals may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933. Selling shareholders who are "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933 will be
subject to the prospectus delivery requirements of the Securities Act of 1933.

LEGAL MATTERS

The validity of the common shares offered by this prospectus will be
passed upon by our counsel, Perley-Robertson, Hill & McDougall LLP, Ottawa,
Ontario. Michael A. Gerrior, Esquire, a partner at the law firm of
Perley-Robertson, Hill & McDougall LLP, counsel to Workstream Inc., is a member
of the board of directors of Workstream Inc.

EXPERTS

The consolidated financial statements incorporated in this prospectus
and registration statement by reference to the Annual Report on Form 10-K for
the year ended May 31, 2003 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent auditors, given on the authority of
said firm as experts in auditing and accounting.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file
with the SEC into this prospectus. This means we can disclose important
information to you by referring you to another document filed by us with the
SEC. The following documents, which we have filed with the SEC, are incorporated
into this prospectus by reference:

(a) our Annual Report on Form 10-K, as amended, for the fiscal
year ended May 31, 2003;

(b) our Current Reports on Form 8-K filed December 15, 2003,
January 6, 2004, January 13, 2004, March 8, 2004 and April 15, 2004;

(d) our Proxy Statement for the Annual and Special Meeting of
Shareholders held on November 20, 2003, filed on October 24, 2003; and

(e) the description of the common shares contained in our
Registration Statement on Form 8-A filed December 3, 1999, including
all amendments and reports filed for the purpose of updating such
description.

In addition, all documents filed by us with the SEC pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after
the date of this prospectus and prior to the termination of this offering shall
be deemed to be incorporated by reference in and shall be a part of this
prospectus from the date of the filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.

We will provide without charge to each person, including any beneficial
owner, to whom a prospectus is delivered, upon the written or oral request of
any such person, a copy of any and all of the information incorporated by
reference in this prospectus, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that is
incorporated into this prospectus. Such requests should be directed to Tammie
Brown, Workstream Inc., 495 March Road, Suite 300, Ottawa, Ontario, Canada K2K
3G1, (613) 270-0619.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-3 with the SEC that
covers the resale of the common shares offered hereby. This prospectus is part
of that registration statement, but does not include all of the information
included in the registration statement. Certain information in the registration
statement has been omitted from this prospectus in accordance with the rules of
the SEC. You should refer to the registration statement for additional
information about us and the common shares offered hereby.

We file annual, quarterly and current reports 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 450 Fifth Street, N.W.,
Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. In addition, the SEC maintains an
Internet web site that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC at
http://www.sec.gov.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses payable by us in connection
with the issuance and distribution of the securities being registered. All of
the amounts shown are estimates, other than the registration fee.

SEC Registration fee................................................. $ 1,149
Printing and engraving expenses...................................... 2,000
Legal fees and expenses.............................................. 55,000
Accountants' fees and expenses....................................... 10,000
Miscellaneous expenses............................................... 500
--------
TOTAL................................................................ $ 68,649
========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under the Canada Business Corporations Act, except with respect to an
action by us or on behalf of us to procure a judgment in our favor, we have a
right to indemnify any of our officers or directors or any former officers or
directors, who act or have acted at our request as officers or directors against
any costs, charges or expenses for amounts paid by him to settle an action in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of having been our officer or director if:

(a) he has acted honestly and in good faith with a view toward
our best interests; and

(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing his conduct was lawful.

We make the determination in (a) and (b) above.

Further, we may, with the approval of a court, indemnify a person who
is a director, officer or former director or officer with respect to an action
by or on behalf of us to procure a judgment in our favor to which he is made a
party by reason of having been our officer or director, against all costs,
charges and expenses reasonably incurred by him in connection with that action
if:

(a) he has acted honestly and in good faith with a view toward
our best interests; and

(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing his conduct was lawful.

A director, officer or former director or officer of ours is also
entitled to indemnification from us with respect to all costs, charges and
expenses reasonably incurred by him in connection with the defense of any civil,
criminal or administrative action or proceeding to which he is a party by reason
of being or having been a director or officer of ours, if he:

(a) was not judged by any court or other competent authority
to have committed any fault or omitted to do anything that
the individual ought to have done;

(b) acted honestly and in good faith with a view toward our
best interests; and

(c) in the case of a criminal or administrative action or
proceeding that was enforced by a monetary penalty, had
reasonable grounds for believing that his conduct was
lawful.

In addition, our by-laws provide that no director or officer is liable
for the acts of any other director or officer or employee or for any loss or
damage to us unless it is caused by his own willful neglect or default. However,
the limitation against liability does not extend or grant any director or
officer protection against the breach of any law. The by-laws also provide for
an indemnity similar to the provisions contained in the Canada Business
Corporations Act and subject to the same limitations.

Our by-laws provide that, subject to the Canada Business Corporations
Act, we can purchase and maintain indemnity insurance for the benefit of our
directors and officers as may be determined from time to time by our directors.
We maintain a policy of insurance under which our directors and officers are
insured, subject to the limits of the policy, against certain losses arising
from claims made against them as officers and directors and by reason of any
acts or omissions covered under the policy, in their respective capacities as
directors or officers, including liability under the Securities Act of 1933.

ITEM 16. EXHIBITS.

Exhibit No. Description of Document
- ----------- -----------------------

4.1 Articles of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the Registration Statement on
Form F-1 (File No. 333-87537)).

4.2 Articles of Amendment, dated July 26, 2001 (incorporated by
reference to Exhibit 1.2 of Form 20-F of Workstream Inc. for
the fiscal year ended May 31, 2001).

4.3 Articles of Amendment, dated November 6, 2001 (incorporated
by reference to Exhibit 1.3 of Form 20-F of Workstream Inc.
for the fiscal year ended May 31, 2001).

4.4 Articles of Amendment, dated November 7, 2002 (incorporated
by reference to Exhibit 4.4 to the Registration Statement on
Form F-3 (File No. 333-101502).

4.5 By-law No. 1 and No. 2 (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form F-1 (File No.
333-87537)).

4.6 By-law No. 3 (incorporated by reference to Exhibit 1.5 of
Form 20-F of Workstream Inc. for the fiscal year ended May
31, 2001).

5.1 Opinion of Perley-Robertson, Hill & McDougall LLP.

23.1 Consent of PricewaterhouseCoopers LLP.

23.2 Consent of Perley-Robertson, Hill & McDougall LLP (included
in Exhibit 5.1).

24.1* Powers of Attorney.

- -----------
* Previously filed.

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement.

(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ottawa, Province of Ontario, on May 28, 2004.

WORKSTREAM INC.

By: /s/ Michael Mullarkey
--------------------------------------
Michael Mullarkey,
President, Chief Executive Officer and
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date

/s/ Michael Mullarkey President, Chief Executive Officer May 28, 2004
- --------------------- and Chairman of the Board of Directors
Michael Mullarkey (Principal Executive Officer)

* Chief Financial Officer and May 28, 2004
- --------------------- Authorized Representative in the
David Polansky United States (Principal Financial
and Accounting Officer)

* Director May 28, 2004
- ---------------------
Arthur Halloran

* Director May 28, 2004
- ---------------------
Matthew Ebbs

* Director May 28, 2004
- ---------------------
Michael A. Gerrior

* Director May 28, 2004
- ---------------------
Thomas Danis

* Director May 28, 2004
- ---------------------
Cholo Manso

* By: /s/ Michael Mullarkey
---------------------
Michael Mullarkey
Attorney-In-Fact

EXHIBIT INDEX