As filed with the Securities and Exchange Commission on January 31, 2005
Registration No. 333-________

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

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

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 (Address and telephone number of
registrant's principal executive offices)

David Polansky
2600 Lake Lucien Drive
Suite 235
Maitland, FL 32751
(407) 475-5500
(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. |_|

CALCULATION OF REGISTRATION FEE

- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of each class Amount Aggregate Aggregate Amount of
of securities to be Price Per Offering Registration
to be registered registered(1)(2) Share(3) Price(3) Fee(3)
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Common shares,
no par value 16,665,719 $3.65 $60,829,874.35 $7,159.68
- ------------------------------------------------------------------------------------------------------------------------------------

(1) Includes (a) 2,498,334 common shares being registered for resale upon the
exercise of warrants and (b) 14,167,385 common shares being registered for
resale by various shareholders.

(2) This registration statement also covers an indeterminate number of common
shares that may be issued by reason of stock splits, stock dividends or
similar transactions in accordance with Rule 416 of the Securities Act of
1933.

(3) Calculated pursuant to Rule 457(c) under the Securities Act of 1933 based
upon the average of the high and low prices of our common shares reported
on the Nasdaq Small Cap Market on January 24, 2005.

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 JANUARY 31, 2005

WORKSTREAM INC.

16,665,719 COMMON SHARES

This prospectus relates to the public offering, which is not being
underwritten, of 16,665,719 common shares, 14,167,385 of which are outstanding
and 2,498,334 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
January 28, 2005 was $3.99 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..............................................................15
Selling Shareholders.........................................................16
Plan of Distribution.........................................................27
Recent Developments..........................................................28
Legal Matters................................................................29
Experts......................................................................29
Incorporation of Certain Documents by Reference..............................30
Where You Can Find More Information..........................................30

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

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 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, or 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 240 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...................................... 16,665,719 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 $8,744,169. 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 November 30, 2004, we had an accumulated
deficit of $42,857,044. We reported a net loss of $5,536,899 for the year ended
May 31, 2004 ("fiscal 2004") and a net loss of $9,676,602 for the year ended May
31, 2003 ("fiscal 2003"). Revenues for fiscal 2004 were $17,166,880. We acquired
twelve companies during fiscal 2004, fiscal 2003 and the year ended May 31, 2002
("fiscal 2002"), seven of which reported in the aggregate net losses of
approximately $42.4 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 fiscal 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. In one
instance, we acquired the business of Icarian Inc., which had lost a significant
number of customers prior to our acquiring it due in part to its financial
instability. While we are generally successful in retaining the remaining
customers of businesses after we acquire them, we may be unsuccessful in doing
so in the future and we may be unable to recover customers already lost by these
financially distressed businesses. We have 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 January 21, 2005, Michael Mullarkey, our Chairman, Chief Executive
Officer and President, was our largest shareholder, beneficially owning
approximately 9% 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 42 % and 40%
of our revenue for fiscal 2004 and fiscal 2003, respectively. 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 FAILURE TO ENTER INTO STRATEGIC RELATIONSHIPS WITH JOB POSTING BOARDS AND
OTHER ONLINE RECRUITMENT SERVICE PROVIDERS MAY HARM OUR BUSINESS.

If we are unable to enter into or maintain strategic relationships with
job posting boards and other online recruitment services, such as Monster.com
and Yahoo!hotjobs pursuant to which our clients can post their job openings on
such job boards, our business will suffer. These relationships allow us to
expand the services we provide our clients without our having to spend
significant capital resources developing or acquiring such services. Because
many of these job posting boards and other online recruitment service providers
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 job posting boards and other
online recruitment service providers 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. During fiscal
2004, 2003 and 2002, approximately 88%, 87% and 83% of our revenues,
respectively, were generated in the United States. 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 January 2006.
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 FINANCINGS 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 27,718,916 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 139% 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 2002, 2003 and 2004. 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. Our systems are 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 their data during certain guaranteed times. If we fail to meet the
service levels specified under our subscription agreements as a result of
repeated outages, the customer can terminate its 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 AND FUTURE
REGISTRATION STATEMENTS COULD DEPRESS THE MARKET FOR OUR COMMON SHARES.

As a result of our registration of the resale of common shares under this
registration statement, 16,665,719 common shares out of a total of 47,670,486
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. The resale of
these shares following the effectiveness of this registration statement could
have an adverse effect on the market price of our common shares.

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 2004, fiscal 2003 and fiscal 2002 was $17,166,880, $17,836,990 and
$14,751,620, respectively, resulting in an average revenue of $16,585,163. 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. For example, recently we were in a
lawsuit with the former shareholders of 6FigureJobs.com, Inc., a company we
acquired in October 2001. Under the terms of the purchase agreement pursuant to
which we acquired 6FigureJobs.com, 323,625 common shares were held in escrow to
be issued to the former shareholders of 6FigureJobs.com provided that certain
revenue and profit targets were achieved. We determined that the revenue and
profit targets were not achieved, but the representative of the former
6FigureJobs.com shareholders disputed that determination and filed a lawsuit
against us with regard to the escrowed shares. The dispute was heard by an
arbitrator in October 2004. On January 3, 2005, the arbitrator handed down his
decision, finding that we were not required to issue to the former shareholders
of 6FigureJobs.com the shares held in escrow However, the arbitrator did find
damages and assessed against us other fees totaling $376,523. In addition, in
connection with this dispute, we incurred legal expenses of approximately
$200,000.

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 $8,744,169. 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 January 21,
2005. 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 Owned
Offering Shares to be Offered After Offering
-------- -------------------- --------------
Selling Shareholders Number Percent(1) Number Number Percent(1)
- -------------------- ------ ---------- ------ ------ ----------

Rubicon Master Fund(2) 3,750,000(3) 7.67% 3,750,000 -- --

Voyager Capital Fund
II-A, L.P. (4) 2,218,096 4.65% 2,218,096 -- --

Union Spring Fund Ltd. (5) 1,250,000(6) 2.60% 1,250,000 -- --

Nathan Low(7) 1,014,874(8) 2.11% 500,001 514,873 1.08%

Sunrise Equity Partners, L.P.
(9) 999,999(10) 2.08% 999,999 -- --

J. Steven Emerson (11) 953,900(12) 1.99% 495,000 458,900 *

ProAct Holdings, LLC(13) 913,551 1.92% 913,551 -- --

Wheatley Partners II,
L.P. (14) 640,198 1.34% 640,198 -- --

InnoCal II, L.P. (15) 570,244 1.20% 570,244 -- --

Sprout Capital VIII,
L.P. (16) 523,597 1.10% 523,597 -- --

Sunrise Foundation Trust(17) 500,001(18) 1.05% 500,001 -- --

ONSET Standby Fund, L.P. (19) 499,942 1.05% 499,942 -- --

St. Paul Venture Capital VI,
LLC(20) 427,684 * 427,684 -- --

Voyager Capital Fund II, L.P.
(4) 398,922 * 398,922 -- --

Doll Technology Investment
Fund II,
L.P. (21) 311,342 * 311,342 -- --

CIBC World Markets Corp. (22) 222,672 * 222,672 -- --

Wheatley Partners II Annex
Fund, L.P. (14) 192,617 * 192,617 -- --

ONSET Enterprises Associates
III, L.P. (23) 187,478 * 187,478 -- --

Menlo Ventures VII,
L.P. (24) 182,771 * 182,771 -- --

GS PEP I ONSET Standby Fund,
L.P. (19) 168,879 * 168,879 -- --

Voyager Capital Founders Fund
II, L.P. (4) 167,035 * 167,035 -- --

Towers, Perrin, Forster &
Crosby, Inc. (25) 150,612 * 150,612 -- --

Casilli Revocable Trust(26) 133,817 * 133,817 -- --

Lee Living Trust(27) 122,469 * 122,469 -- --

Legend Merchant Group(28) 120,000 * 100,000 20,000 *

Dan Federman 107,459 * 107,459 -- --

Trimbus Inc. (29) 92,891 * 92,891 -- --

GS PEP I Offshore ONSET
Standby Fund, L.P. (19) 81,092 * 81,092 -- --

Thomas King 79,125 * 79,125 -- --

Anthony Russo 48,987 * 48,987 -- --

Mark H. Edwards 46,880 * 46,880 -- --

Casilli Investment Partners(30) 46,155 * 46,155 -- --

DLJ ESC II, L.P. (31) 42,008 * 42,008 -- --

Michael West 38,176 * 38,176 -- --

Agility Capital, LLC(32) 35,149 * 35,149 -- --

Kevin Dobbs(33) 32,108 * 32,108 -- --

DCM Internet Fund,
L.P. (34) 31,975 * 31,975 -- --

Sprout Venture Capital, L.P.
(35) 31,415 * 31,415 -- --

Woodland Partners(36) 21,691 * 21,691 -- --

Michelle M. Smith 19,595 * 19,595 -- --

Kai Yu 19,595 * 19,595 -- --

Doll Technology Affiliates
Fund II, L.P. (21) 19,558 * 19,558 -- --

Patrick R. Neargarder 18,072 * 18,072 -- --

DCM Network Fund,
L.P. (34) 17,287 * 17,287 -- --

Gerald A. Casilli Trust(37) 16,881 * 16,881 -- --

Michelle A. Casilli Trust(38) 16,881 * 16,881 -- --

Henry I. Feir Living Trust(39) 15,849 * 15,849 -- --

Debra Christoffers 14,759 * 14,759 -- --

Milt Grinberg 14,242 * 14,242 -- --

Yana Nikitina 12,947 * 12,947 -- --

Elliott Downing 10,358 * 10,358 -- --

Gisele Camozzi 9,797 * 9,797 -- --

Kathleen Longaker 9,797 * 9,797 -- --

Steven Wakefield 9,797 * 9,797 -- --

Jim Sciarra 9,063 * 9,063 -- --

Lazy P. Investors, L.P. (40) 8,111 * 8,111 -- --

Menlo Entrepeneurs Fund VII,
L.P. (24) 7,311 * 7,311 -- --

Brian Wong 6,473 * 6,473 -- --

Debra J. Engle Revocable
Family Trust(41) 6,402 * 6,402 -- --

Julia Simovsky 5,179 * 5,179 -- --

Tram-Ahn Tina Nguyen 4,898 * 4,898 -- --

Peterson Family Trust(42) 4,689 * 4,689 -- --

Kevin J. Sullivan 4,095 * 4,095 -- --

Steven Darien 3,229 * 3,229 -- --

F&K Delepine Trust(43) 2,993 * 2,993 -- --

Brian Beck 2,589 * 2,589 -- --

Julie Ingle 2,589 * 2,589 -- --

Adam Belsky 1,901 * 1,901 -- --

DLJ Capital Corp. (44) 1,736 * 1,736 -- --

Meltold Associates(45) 1,585 * 1,585 -- --

Grinberg Family Trust(46) 1,216 * 1,216 -- --

Maureen Young Smith 1,216 * 1,216 -- --

Joseph Britton 972 * 972 -- --

Gary Cary Ware & Freidenrich
Partners I(47) 923 * 923 -- --

John Nostrand and Evelyn
Nostrand 475 * 475 -- --

Stephen and Barbara Baron 320 * 320 -- --

Gary Cary Ware & Freidenrich
Partners II(47) 301 * 301 -- --
-------------- -------------- ---------------- ------------- --------

Total 17,659,492 (48) 35.09% 16,665,719 993,773 2.07%

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

(1) This information is based on 47,670,486 common shares outstanding as
of January 21, 2005, including 368,384 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 January 21, 2005. 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) Rubicon Fund Management Ltd., Rubicon Fund Management LLP, Paul
Anthony Brewer, Jeffrey Eugene Brummette, William Francis Callanan,
Vilas Gadkari, Robert Michael Greenshields and Horace Joseph Leitch
III share voting control and dispositive power over the securities
held by Rubicon Master Fund. Paul Anthony Brewer, Jeffrey Eugene
Brummette, William Francis Callanan, Vilas Gadkari, Robert Michael
Greenshields and Horace Joseph Leitch III control each of Rubicon
Fund Management Ltd. and Rubicon Fund Management LLP. Rubicon Fund
Management Ltd., Rubicon Fund Management LLP, Paul Anthony Brewer,
Jeffrey Eugene Brummette, William Francis Callanan, Vilas Gadkari,
Robert Michael Greenshields and Horace Joseph Leitch III disclaim
beneficial ownership of the securities held by Rubicon Master Fund.

(3) Includes 1,250,000 common shares issuable upon the exercise of
warrants. The warrants have an exercise price of $3.50 per share and
expire on December 31, 2008.

(4) Voyager Capital Management II LLC is the general partner of Voyager
Capital Fund II, L.P., Voyager Capital Founders Fund II, L.P. and
Voyager Capital Fund II-A, L.P. and consequently has voting control
and dispositive power over the securities held by Voyager Capital
Fund II, L.P., Voyager Capital Founders Fund II, L.P. and Voyager
Capital Fund II-A, L.P. Tony Andino, Erik Benson, Curtis Feeny,
Enrique Godreau and William McAleer are the managing members of
Voyager Capital Management II LLC.

(5) Senior Corporation has sole voting control over Union Spring Fund
Ltd. and consequently has voting control and dispositive power over
the securities held by Union Spring Fund Ltd. Phillip Yang, Sr. is
the sole shareholder, officer and director of Senior Corporation.

(6) Includes 416,667 common shares issuable upon the exercise of
warrants. The warrants have an exercise price of $3.50 per share and
expire on December 31, 2008.

(7) Nathan Low is the president and sole shareholder of Sunrise
Securities Corporation, a registered broker-dealer.

(8) Includes 329,167 common shares issuable upon the exercise of
warrants. Warrants exercisable for 162,500 common shares have an
exercise price of $1.60 per common share and expire in December
2008. Additional warrants exercisable for 166,667 common shares have
an exercise price of $3.50 per common share and expire on December
31, 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.

(9) Level Counter, LLC is the sole general partner of Sunrise Equity
Partners, L.P. and consequently has voting control and dispositive
power over the securities held by Sunrise Equity Partners, L.P.
Nathan Low, Marilyn Adler and Amnon Mandelbaum control the voting
power of Level Counter, LLC. Sunrise Equity Partners, L.P. is an
affiliate of a registered broker-dealer.

(10) Includes 333,333 common shares issuable upon exercise of warrants.
The warrants have an exercise price of $3.50 per share and expire on
December 31, 2008.

(11) J. Steven Emerson is the sole beneficiary of the self directed IRA
and consequently has voting control and dispositive power over the
securities held by Bear Stearns Securities Corp., custodian f/b/o J.
Steven Emerson Roth IRA.

(12) Includes 165,000 common shares issuable upon the exercise of
warrants. The warrants have an exercise price of $3.50 per common
share and expire on December 31, 2008.

(13) Mary Harman, Harry Hawks, John Levinson and Jonathan Glass are the
managers of ProAct Holdings, LLC and consequently have voting
control and dispositive power over the securities held by ProAct
Holdings, LLC.

(14) Barry Rubenstein, Irwin Lieber, Barry Fingerhut, Jonathan Lieber and
Seth Lieber are the general partners of Wheatley Partners II, L.P.
and the members of Wheatley Partners LLC, the general partner of
Wheatley Partners II Annex Fund, L.P. and consequently share voting
control and dispositive power over the securities held by Wheatley
Partners II, L.P. and Wheatley Partners II Annex Fund, L.P. Barry
Rubenstein, Irwin Lieber, Barry Fingerhut, Jonathan Lieber and Seth
Lieber disclaim beneficial ownership over the securities held by
Wheatley Partners II, L.P., except to the extent of their pecuniary
interest therein. Wheatley Partners, LLC, Barry Rubenstein, Irwin
Lieber, Barry Fingerhut, Jonathan Lieber and Seth Lieber disclaim
beneficial ownership over the securities held by Wheatley Partners
II Annex Fund, L.P., except to the extent of their pecuniary
interest therein.

(15) InnoCal Management II, LLC is the general partner of InnoCal II,
L.P. and consequently has voting control and dispositive power over
the securities held by InnoCal II, L.P. H.D. Lambert and J.E.
Houlihan are the managing directors of InnoCal Management II, LLC.
H.D. Lambert and J.E. Houlihan disclaim beneficial ownership over
the securities held by InnoCal II, L.P.

(16) DLJ Capital Corporation is the managing general partner of Sprout
Capital VIII, L.P. Philippe Chambone, Robert Finzi, Jeani
DeLagardelle, Janet Hickey and Kathleen Laport are the managing
directors of DLJ Capital Corp. and in such capacities have voting
control and dispositive power over the securities held by Sprout
Capital VIII, L.P. Credit Suisse First Boston (USA), Inc., the sole
general partner of DLJ Capital Corp., is a wholly owned subsidiary
of Credit Suisse First Boston, Inc. Sprout Capital VIII, L.P. is an
affiliate of a registered broker-dealer.

(17) Nathan Low is the sole trustee of the Sunrise Foundation Trust. Mr.
Low disclaims beneficial ownership in the securities held by the
Sunrise Foundation Trust.

(18) Includes 166,667 common shares issuable upon the exercise of
warrants. The warrants have an exercise price of $3.50 per common
share and expire on December 31, 2008. Nathan Low disclaims
beneficial ownership of the common shares and warrants held by the
Sunrise Foundation Trust.

(19) Onset Standby Management, LLC is the general partner of Onset
Standby Fund, L.P., GS PEP I ONSET Standby Fund, L.P. and GS PEP I
Offshore ONSET Standby Fund, L.P. F. Leslie Bottoroff, Mark G.
Hilderbrand, Robert F. Kuhling, Susan A. Mason and Terry L. Opdendyk
are the managing directors of Onset Standby Management, LLC and
consequently share voting control and dispositive power over the
securities held by Onset Standby Fund, L.P., GS PEP I ONSET Standby
Fund, L.P. and GS PEP I Offshore ONSET Standby Fund, L.P. F. Leslie
Bottoroff, Mark G. Hilderbrand, Robert F. Kuhling, Susan A. Mason
and Terry L. Opdendyk disclaim beneficial ownership in the
securities held by Onset Standby Fund, L.P., GS PEP I ONSET Standby
Fund, L.P. and GS PEP I Offshore ONSET Standby Fund, L.P., except to
the extent of their pecuniary interest therein.

(20) St. Paul Venture Capital VI, LLC is jointly managed by Split Rock
Partners, LLC and Vestbridge Partners, LLC, however, voting and
investment power with respect to the shares has been delegated
solely to Split Rock Partners, LLC. Split Rock Partners, LLC has
delegated voting and investment decisions to Michael B. Gorman,
James R. Simons, David W. Stassen and Allan R. Will, its managing
directors, who require a two-thirds vote to act. Additionally, The
St. Paul Travelers Companies, Inc., a publicly traded company, owns
100% of St. Paul Fire and Marine Insurance Company. St. Paul Fire
and Marine Insurance Company owns a controlling interest of St. Paul
Venture Capital VI, LLC, and has appointed a majority of the members
of its board of directors. Voting and investment power may be deemed
to be shared with The St. Paul Travelers Companies, Inc., St. Paul
Fire and Marine Insurance Company and Split Rock Partners, LLC due
to the affiliate relationship described above. The St. Paul
Travelers Companies, Inc., St Paul Fire and Marine Insurance
Company, Split Rock Partners, LLC, Michael B. Gorman, James R.
Simons, David W. Stassen and Allan R. Will disclaim beneficial
ownership of the securities held by St. Paul Venture Capital VI,
LLC, except to the extent of any pecuniary interest therein. St.
Paul Venture Capital VI, LLC is an affiliate of a registered
broker-dealer.

(21) Doll Technology Investment Management II, LLC is the general partner
of Doll Technology Investment Fund II, L.P. and Doll Technology
Affiliates Fund II, L.P. and consequently has voting control and
dispositive power over the securities held by Doll Technology
Investment Fund II, L.P. and Doll Technology Affiliates Fund II,
L.P. Dixon R. Doll and Katsujin David Chao are the managing members
of Doll Technology Investment Management II, LLC. Doll Technology
Investment Management II, LLC, Dixon R. Doll and Katsujin David Chao
disclaim beneficial ownership of the securities held by Doll
Technology Investment Fund II and Doll Technology Affiliates Fund
II, L.P., except to the extent of their pecuniary interest therein.

(22) CIBC World Markets Corp. is a wholly owned subsidiary of CIBC World
Markets Holdings, Inc., which is in turn a wholly owned subsidiary
of CIBC Delaware Holdings, Inc. CIBC World Markets Inc. and Canadian
Imperial Bank of Commerce own a 65.9% and 34.1% interest,
respectively, of CIBC Delaware Holdings, Inc. Marc Thompson, the
Managing Director of CIBC World Markets, has voting control and
dispositive power over the shares. CIBC World Markets Corp. is a
registered broker-dealer.

(23) OEA III Management, LLC is the general partner of Onset Enterprise
Associates III, L.P. Robert F. Kuhling and Terry L. Opdendyk are the
managing directors of OEA III Management, LLC and consequently share
voting control and dispositive power over the securities held by
Onset Enterprise Associates III, L.P. Robert F. Kuhling and Terry L.
Opdendyk disclaim beneficial ownership over the securities held by
Onset Enterprise Associates III, L.P., except to the extent of their
pecuniary interest therein.

(24) MV Management VII, LLC is the general partner of Menlo Ventures VII,
L.P. and Menlo Entrepreneurs Fund VII, L.P. and consequently has
voting control and dispositive power over the securities held by
Menlo Ventures VII, L.P. and Menlo Entrepreneurs Fund VII, L.P. H.D.
Montgomery, Douglas C. Carlisle, John W. Jarve, Sonja L. Hoel and
Mark A. Siegel are the managing members of MV Management VII, LLC.
MV Management VII, LLC, H.D. Montgomery, Douglas C. Carlisle, John
W. Jarve, Sonja L. Hoel and Mark A. Siegel disclaim beneficial
ownership over the securities held by Menlo Ventures VII, L.P. and
Menlo Entrepreneurs Fund VII, L.P., except to the extent of their
pecuniary interest therein.

(25) Mark V. Mactas and Mark L. Wilson are the Chief Executive Officer
and Chief Financial Officer, respectively, of Towers, Perrin,
Forster & Crosby, Inc. and consequently have voting control and
dispositive power over the securities held by Towers, Perrin,
Forster & Crosby, Inc. Mr. Mactas and Mr. Wilson disclaim beneficial
ownership in the securities held by Towers, Perrin, Forster &
Crosby, Inc.

(26) Gerald S. Casilli and Jeanne L. Casilli are co-trustees of the
Casilli Revocable Trust and consequently share voting control and
dispositive power over the securities held by the Casilli Revocable
Trust.

(27) King R. Lee and Brenda M. Lee are co-trustees of the Lee Living
Trust dated March 25, 1994 and have voting control and dispositive
power over the securities held by The Lee Living Trust.

(28) David Unsworth has voting control and dispositive power over the
securities held by Legend Merchant Group, Inc. Legend Merchant
Group, Inc. is a registered broker-dealer.

(29) Ralph Matlack, Edward Matlack, Blair Martin and Brendan Burke share
voting control and dispositive power over the securities held by
Trimbus Inc. The aforementioned individuals disclaim beneficial
ownership in the securities held by Trimbus Inc.

(30) Gerald S. Casilli is the managing member of Casilli Investment
Partners and consequently has voting control and dispositive power
over the securities held by Casilli Investment Partners.

(31) DLJ LBO Plans Management Corporation is the general partner of DLJ
ESC II, L.P. Credit Suisse First Boston Private Equity, Inc., which
owns all of DLJ LBO Plans Management Corporation, is a wholly owned
subsidiary of Credit Suisse First Boston (USA), Inc., which in turn
is a wholly owned subsidiary of Credit Suisse First Boston, Inc.
Credit Suisse First Boston Private Equity, Inc. has a five person
investment committee, consisting of Philippe Chambone, Robert Finzi,
Jeani DeLagardelle, Janet Hickey and Kathleen Laport, which
maintains voting control and dispositive power over the securities
held by DLJ ESC II, L.P. DLJ ESC II, L.P. is an affiliate of a
registered broker-dealer.

(32) Robert Skinner, Jeff Carmody and Daniel Corry are the managing
members of Agility Capital, LLC and consequently have voting control
and dispositive power over the securities held by Agility Capital,
LLC. Robert Skinner, Jeff Carmody and Daniel Corry disclaim
beneficial ownership over the securities held by Agility Capital,
LLC.

(33) Kevin Dobbs is currently our Senior Vice President of Marketing and
Business Development. Mr. Dobbs was previously the Vice President of
Marketing and Business Development of Kadiri, Inc. Mr. Dobbs
received his shares in connection with our acquisition of Kadiri,
Inc.

(34) Doll Technology Investment Management II, LLC is the general partner
of DCM Internet Fund, L.P. and DCM Network Fund, L.P. and
consequently has voting control and dispositive power over the
securities held by DCM Internet Fund, L.P. and DCM Network Fund,
L.P. Dixon R. Doll and Katsujin David Chao are the managing members
of Doll Technology Investment Management II, LLC. Doll Technology
Investment Management II, LLC, Dixon R. Doll and Katsujin David Chao
disclaim beneficial ownership of the securities held by DCM Internet
Fund, L.P. and DCM Network Fund, L.P., except to the extent of their
pecuniary interest therein.

(35) DLJ Capital Corp. is the sole general partner of Sprout Venture
Capital, L.P. Philippe Chambone, Robert Finzi, Jeani DeLagardelle,
Janet Hickey and Kathleen Laport are the managing directors of DLJ
Capital Corp. and in such capacities have voting control and
dispositive power over the securities held by Sprout Venture
Capital, L.P. Credit Suisse First Boston (USA), Inc., the sole
general partner of DLJ Capital Corp., is a wholly owned subsidiary
of Credit Suisse First Boston, Inc. Sprout Venture Capital, L.P. is
an affiliate of a registered broker-dealer.

(36) Barry Rubenstein and Marilyn Rubenstein are the general partners of
Woodland Partners and consequently share voting control and
dispositive power over the securities held by Woodland Partners.
Barry Rubenstein and Marilyn Rubenstein disclaim beneficial
ownership over the securities held by Woodland Partners, except to
the extent of their pecuniary interest therein.

(37) Gerald S. Casilli is the trustee of the Gerald A. Casilli Trust and
consequently has voting control and dispositive power over the
securities held by the Gerald A. Casilli Trust.

(38) Gerald S. Casilli is the trustee of the Michelle A. Casilli Trust
and consequently has voting control and dispositive power over the
securities held by the Michelle A. Casilli Trust.

(39) Henry I. Feir is the trustee of the Henry I. Feir Living Trust dated
August 11, 1989 and consequently has voting control and dispositive
power over the securities held by the Henry I. Feir Living Trust
dated August 11, 1989.

(40) Glenn E. Penister is the managing partner of Lazy P. Investors and
consequently has voting control and dispositive power over the
securities held by Lazy P. Investors, LP.

(41) Debra Engle is the sole trustee of the Debra J. Engle Revocable
Trust and thus has sole voting and dispositive control over the
shares held by the trust.

(42) Floyd Edwin Peterson and Ruby Joan Peterson are co-trustees of the
Peterson Family Trust dated May 5, 1982 and consequently share
voting control and dispositive power over the securities held by the
Peterson Family Trust dated May 5, 1982.

(43) Francois Delepine and Kelly Delepine are the co-trustees of the F&K
Delepine Trust and consequently share voting control and dispositive
power over the securities held by the F&K Delepine Trust.

(44) Philippe Chambone, Robert Finzi, Jeani DeLagardelle, Janet Hickey
and Kathleen Laport are the managing directors of DLJ Capital Corp.
and in such capacities have voting control and dispositive power
over the securities held by DLJ Capital Corp. Credit Suisse First
Boston (USA), Inc. is the sole general partner of DLJ Capital Corp.
Credit Suisse First Boston (USA), Inc. is a wholly owned subsidiary
of Credit Suisse First Boston, Inc. DLJ Capital Corp. is an
affiliate of a registered broker-dealer.

(45) Meyer S. Grinberg is the general partner of Meltold Associates and
consequently has voting control and dispositive power over the
securities held by Meltold Associates.

(46) Milton R. Grinberg and Judith Grinberg are co-trustees of the
Grinberg Family Trust and consequently share voting control and
dispositive power over the securities held by the Grinberg Family
Trust.

(47) Gray Ware Corporation is the managing partner of Gray Cary Ware &
Freidenrich Partners I and Gray Cary Ware & Freidenrich Partners II.
The Board of Directors of Gray Ware Corporation control the voting
and dispositive power over the securities held by the partnerships.
The members of the Board of Directors of Gray Ware Corporation are
Gilles Attia, Robert Ayling, T. Knox Bell, Steven Draeger, Maureen
Dorney, Gregory Gallo, James Koshland, James Montgomery, John Steel,
Lawrence Tannenbaum and Andrew Zeif.

(48) Includes 2,660,834 common shares issuable upon the 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 entered into after the date of this prospectus;

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.

Selling shareholders that are broker-dealers are statutory underwriters
under the Securities Act of 1933. 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. Two of our selling shareholders, Legend Merchant Group
and CIBC World Markets Corp. are registered broker-dealers. Certain of our
selling shareholders are affiliates of broker-dealers, including St. Paul
Venture Capital VI, LLC, DLJ Capital Corp., Sprout Venture Capital, L.P., Sprout
Capital VIII, L.P., DLJ ESC II, L.P., Sunrise Equity Partners, L.P. and Nathan
Low. Each such selling shareholder purchased the shares in the ordinary course
of business, and at the time of purchase the seller had no agreement or
understandings, directly or indirectly, with any person to distribute the
shares.

RECENT DEVELOPMENTS

On December 30, 2004, we acquired substantially all of the assets of
ProAct Technologies Corporation, a provider of software and hosted web-based
tools for employee benefits management. As consideration for the sale, we issued
913,551 common shares valued at $2,700,000, including 253,764 shares that are
being held in escrow as the exclusive source to cover indemnity obligations
covering breaches of certain representations and warranties contained in the
purchase documents. In addition, we made a cash payment of $5,500,000 and issued
a secured promissory note in the face amount of $1,530,000.

On December 17, 2004, December 20, 2004 and January 3, 2005, we sold an
aggregate of $14,990,000 of our common shares in a private placement of
4,996,667 shares and warrants to purchase 2,498,333 shares of our common stock
at an exercise price of $3.50 per share to Rubicon Master Fund, Union Spring
Fund Ltd., Sunrise Equity Partners L.P., Sunrise Foundation Trust, Nathan A. Low
and J. Steven Emerson Roth IRA. The private placement was exempt from
registration under Rule 506 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, 2004 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 for the fiscal year ended May 31,
2004, as amended on November 1, 2004;

(b) our Quarterly Reports on Form 10-Q for the fiscal quarters ended
August 31, 2004 and November 30, 2004;

(c) our Current Reports on Form 8-K filed June 14, 2004, June 23,
2004, July 6, 2004, July 21, 2004, August 11, 2004, August 13, 2004,
August 17, 2004, August 20, 2004, August 27, 2004, September 2, 2004,
September 15, 2004, September 17, 2004, September 28, 2004, October 4,
2004, October 7, 2004, October 8, 2004, October 13, 2004, October 15,
2004, November 23, 2004, November 26, 2004, December 21, 2004, December
23, 2004, January 6, 2005, January 7, 2005 and January 14, 2005;

(d) our Proxy Statement for the Annual and Special Meeting of
Shareholders to be held on October 27, 2004, filed on September 28, 2004;
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 ........................................ $ 7,160
Printing and engraving expenses ............................. 2,000
Legal fees and expenses ..................................... 20,000
Accountants' fees and expenses .............................. 10,000
Miscellaneous expenses ...................................... 840
-------
TOTAL ....................................................... $40,000

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 (included on the signature page hereto).

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 January 31, 2005.

WORKSTREAM INC.

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

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael Mullarkey, David Polansky or each of
them, individually, his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement and any and
all additional registration statements pursuant to Rule 462(b) of the Securities
Act of 1933 and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his or her substitute or substitutes may
lawfully do or cause to be done by virtue hereof.

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 January 31, 2005
- ------------------------------- and Chairman of the Board of Directors
Michael Mullarkey
(Principal Executive Officer)

/s/ David Polansky Chief Financial Officer and January 31, 2005
- ------------------------------- Authorized Representative in the
David Polansky United States (Principal Financial
and Accounting Officer)

/s/ Arthur Halloran Director January 31, 2005
- -------------------------------
Arthur Halloran

/s/ Matthew Ebbs Director January 31, 2005
- -------------------------------
Matthew Ebbs

/s/ Michael A. Gerrior Director January 31, 2005
- -------------------------------
Michael A. Gerrior

/s/ Thomas Danis Director January 31, 2005
- -------------------------------
Thomas Danis

/s/ Cholo Manso Director January 31, 2005
- -------------------------------
Cholo Manso

/s/ Steve Singh Director January 31, 2005
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Steve Singh

EXHIBIT INDEX

Exhibit No. Description of Document
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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 (included on the signature page hereto).