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

FORM 10-K

MTM TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (203) 975-3700

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange Act:
Common stock, par value $0.001 per share

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]      No [  ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

      Indicate by check mark whether the registrant is an accelerated filer. Yes [  ]      No [X]

      The aggregate market value of the 3,210,816 shares of voting and non-voting common equity stock held by non-affiliates (all shareholders other than directors, executive officers and 5% or greater shareholders) of the registrant was $5,972,118 as of September 30, 2004, based on the average bid and asked prices of the registrant's common stock on such date of $1.86 per share, as reported by The Nasdaq Stock Market, Inc.

      There were a total of 7,392,317 shares of the registrant's common stock outstanding as of June 15, 2005.

Documents Incorporated by Reference:
None

MTM TECHNOLOGIES, INC.
FORM 10-K
For the Fiscal Year Ended March 31, 2005

Introductory Comment—Terminology

      Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our” and “our company” refers to MTM Technologies, Inc. (formerly, Micros-to-Mainframes, Inc.) ( “MTM” ) and, unless the context indicates otherwise, our subsidiaries on a consolidated basis.

      “Pequot Fund” refers to Pequot Private Equity Fund III, L.P., “Pequot Partners” refers to Pequot Offshore Private Equity Partners III, L.P., and collectively with Pequot Fund, “Pequot,” “Constellation Venture” refers to Constellation Venture Capital II, L.P., “Constellation Offshore” refers to Constellation Venture Capital Offshore II, L.P., “BSC” refers to The BSC Employee Fund VI, L.P., “CVC” refers to CVC Partners II, LLC, and collectively with Constellation Venture, Constellation Offshore and BSC, “Constellation,” and together with Pequot, the “Investors.”

Introductory Comment—Forward-Looking Statements

      Statements contained in this Annual Report on Form 10-K include “forward-looking statements” within the meaning of such term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Forward-looking statements made in this Form 10-K generally are based on our best estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “should,” “project,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” “potential,” “opportunity” or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions. Potential risks and uncertainties include, among other things, such factors as:

      Readers are urged to carefully review and consider the various disclosures made by us in this Annual Report on Form 10-K and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this Form 10-K speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

PART I

Item 1. Description of Business

      We are a leading national computer and communications technology management company providing information technology (“IT”) networking, communications, software applications and data center services, including secure access, voice over internet protocol (“VOIP”), storage, security and messaging solutions. We serve as a single source provider of advanced technology solutions to support our clients’ mission-critical business processes. Our clients consist of divisions of Fortune 100 and Fortune 500 corporations, middle market corporations (generally those with $50 million to $1 billion in revenues), municipal, state and federal government agencies, and educational institutions. We serve clients in most major US metropolitan markets.

      We provide services to our clients that address the full life cycle of a business solution from needs analysis, through planning, solution development, deployment, and testing, to on-going maintenance and support. We act a single-source provider of business technology solutions to our clients, an increasingly mandated requirement in today’s marketplace.

Business Strategy

      There is a rapidly growing trend among companies to outsource their computer services requirements. This entails client companies obtaining all or a portion of their data processing and related requirements from solution providers, such as us, that specialize in the technology service, product or application required by these client companies. Our strategy is to be the national leader in providing sophisticated network solutions to the middle market using a combination of carefully managed internal growth and acquisitions. We offer our clients selective outsourced infrastructure solutions at competitive prices. We are focusing our efforts on developing our higher margin recurring service offerings, while maintaining control over our expenses and improving our balance sheet. These services include our outsourced support services; contract programming; voice over internet protocol (VOIP) solutions; network consulting; network management and monitoring; security solutions; collaboration solutions focused primarily on Microsoft Exchange; data storage (including disaster recovery and data back-up) and IT staff augmentation.

      Since 1991, we have evolved to become a provider of IT managed solutions. We are focusing our current marketing efforts in accelerating growth in such areas. Services accounted for approximately 28% of our revenues for the fiscal year ended March 31, 2005, as compared to approximately 25% in the fiscal year ended March 31, 2004, with a small portion of these revenues derived from maintenance and repair services. The trend toward services revenue has accelerated, however as a result of our acquisition program, with service revenue accounting for approximately 30% of our revenue in the quarter ended March 31, 2005.

      Our acquisition program is an important part of our business strategy.

Acquisition Program

      One of our principal goals is to grow our business through the acquisition of additional companies. These acquisitions would expand our business into geographic regions where we do not yet have a strong presence, strengthen our technical capabilities and provide new service offerings. These benefits would enable us to better service the needs of middle market business and divisions of large enterprises. To fund the cash portions of the acquisitions which we have made to date, we have relied on private institutional financing.

      On January 29, 2004 we entered into an agreement (the “Pequot Purchase Agreement”) with Pequot to sell to Pequot an aggregate of up to $25 million of Series A Convertible Preferred Stock, together with warrants to purchase additional shares of common stock. We subsequently sold shares of Series A-1 Convertible Preferred Stock and Series A-2 Convertible Preferred Stock, in each case together with common stock warrants, to Pequot, to fund the cash portions of the

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purchase prices for our acquisitions of DataVox Technologies, Inc. and Network Catalyst, Inc., respectively, referred to below.

      On December 7, 2004, Pequot assigned to Constellation all of Pequot’s rights and obligations under the Pequot Purchase Agreement to purchase a portion of the shares of the Series A-3 Convertible Preferred Stock and common stock warrants covered by that agreement. On that date we also entered into a purchase agreement (the “Pequot/Constellation Purchase Agreement”) with Pequot and Constellation for up to $40 million (or in certain limited circumstances, up to $47.5 million) of additional financing in the form of 7% convertible secured notes in three tranches. We subsequently sold to Pequot and Constellation shares of Series A-3 Preferred Stock and common stock warrants under the Pequot Purchase Agreement, and Series A-4 First Tranche Notes under the Pequot/Constellation Agreement, to fund the cash portion of the purchase price for our acquisition of the Vector ESP entities; and Series A-4 Second Tranche Notes under the latter agreement to fund the cash portion of our purchase price for our acquisition of Info Systems, Inc. The Series A-4 First Tranche Notes and Series A-4 Second Tranche Notes were converted into shares of our Series A-4 Preferred Stock upon approval of such convertibility by our shareholders on June 23, 2005.

      We believe that there is an opportunity to consolidate similar businesses throughout the United States. We will focus our acquisition strategy on businesses providing secure access, voice over internet protocol (VOIP), storage, networking and messaging solutions. The acquisition targets will include companies providing IT services and products, as well as certain managed solutions. We intend to seek acquisitions to enhance our current service offerings and extend our geographic presence. We seek to identify businesses which will add technical expertise and service offerings, customers, sales capabilities and/or geographic coverage while generating a positive rate of return on investment. Furthermore, we intend to capitalize on the business practices of acquired companies that we believe will best maintain or strengthen our competitive advantage and ensure ongoing delivery of high quality IT solutions to our customers. The acquisition candidates we may investigate can be large, and their acquisition by us could have a significant and lasting impact on our business.

      In executing our growth-through-acquisition strategy during our 2005 fiscal year, we have acquired the businesses and operating assets of the first three of the following four companies, and all of the outstanding capital stock of the fourth one:

Business Services

      We are a leading national computer and communications technology management company providing IT networking, communications, software applications and data center services, including secure access, voice over internet protocol (VOIP), storage, security and messaging solutions. We serve as a single source provider of advanced technology solutions to support our clients’ mission-

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critical business processes. Our clients consist of divisions of Fortune 100 and Fortune 500 corporations, middle market corporations (generally those with $50 million to $1 billion in revenues), municipal, state and federal government agencies, and educational institutions. We serve clients in most major US metropolitan markets.

      We provide services to our clients that address the full life cycle of a business solution, from needs analysis, through planning, solution development, deployment, and testing, to on-going maintenance and support. We act a single-source provider of business technology solutions to our clients, an increasingly mandated requirement in today’s marketplace.

      Our services can be broadly categorized into the following:

      Managed Services

      We provide our clients with a suite of managed services through the use of our Pivot Technology system which includes our proprietary network management and monitoring software system. Our Pivot Technology system provides our clients with real-time monitoring of their computing and storage systems, VOIP systems and network infrastructure to immediately detect component failures, critical security events (such as, for example, hacking attempts), deteriorating performance and also to report on the health of these systems. The Pivot Technology system is a combination of our proprietary network management and monitoring software and best-of-breed third party licensed software. Monitoring of our clients’ networks is performed by our certified engineering staff operating on a 24x7x365 basis from two of our network operations centers (“NOC”). Our NOCs are located in Delaware and California.

      In addition to monitoring, our managed services include managed hosting and a suite of hosted applications, including VOIP and e-mail. We offer our customers a choice of two collocation facilities to host their computing systems. Our field engineering resources are available in each of our regions to provide field support and technical resources in connection with our managed services.

      Consulting, Integration and Professional Services

      Our staff of certified technology professionals provide our clients with a full suite of services ranging from advanced configurations and complex project management, project logistics and planning. We provide design, consulting, implementation and support services in our seven areas of core competence. These are network infrastructure (including LAN, WAN and Wireless), VOIP, storage solutions, operating systems, security, facilities design and access infrastructure.

      Our capability to address all phases of technology projects, from needs analysis and definition through implementation and support, allows us to offer our customers a single point of accountability for a broad range of technology projects. As technology infrastructure becomes progressively more sophisticated and complex, our clients demand total project accountability from a single vendor. With our national presence, engineering expertise, and extensive relationships with top tier vendors, we are able to undertake most technology infrastructure projects for our clients and provide them that critical single point of accountability.

      We provide professional consulting services for most of the infrastructure technologies that our clients utilize. These include expertise in the technology of a number of leading manufactures of infrastructure technology. For example, we are a Cisco Gold partner, a Citrix Platinum Solutions Advisor, a Hewlett Packard Gold and Enterprise Storage Elite partner, Microsoft Gold partner, an Avaya Gold partner, a Captaris Platinum partner, and a Nortel Elite partner. For those

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manufactures that we believe are critical to our client’s technology infrastructure we generally hold the highest level of certification granted by such manufacturers.

      In many of our regions we operate large project staging facilities, where technology systems associated with of our clients’ complex projects are staged, configured, tested and verified prior to delivery to the clients’ premise. We also provide accredited and topic-specific professional training services for our clients at several training facilities across the United States. Each of these facilities is fully equipped with the necessary equipment and lab facilities specific to the curriculum being delivered. In addition, we frequently offer seminars and technology awareness events for the benefit of our existing and prospective clients.

      IT Outsourcing

      Many of our potential clients have adopted an approach to technology of focusing on their core business competencies, while outsourcing non-core technology systems. These clients, however, often find it more cost effective to outsource than to fund the cost of a full-time internal IT staff to operate the sophisticated technology systems necessary which support their core business. Additionally, some clients are faced with extensive legal and regulatory compliance mandates that require sophisticated technology solutions. Again, for some of these clients, maintaining a full-time internal staff to operate those systems is not feasible.

      Our IT outsourcing solutions provide a cost effective solution to such clients by providing targeted support to fill gaps in their technology staffing on a project basis. We also offer solutions which allow clients to adopt a “pay-as-you-go” approach for supporting their IT requirements by providing hosted systems solutions that do not require substantial upfront capital investments. We believe that our technology outsourcing solutions allow our clients to achieve productivity enhancements, meet their legal and regulatory compliance requirements and improve financial performance by deploying advanced technologies on an outsourced basis. These solutions range from outsourcing of specific targeted business functions (such as application hosting, help desk operations) to strategy definition and execution on a virtual CIO basis.

      For clients with defined staff augmentation needs, our IT outsourcing provides cost-effective staffing alternatives in connection with both long and short term client projects by maintaining an extensive staff of highly trained consultants meeting many of the same qualifications as those which our clients demand of our own professional staff resources.

      Product Provisioning Services and On-line Sourcing

      We provide all aspects of infrastructure technology product delivery to our clients. Through our relationships as a certified partner with most of the key top tier infrastructure technology product manufacturers and with key infrastructure technology distributors, we are able to provide our clients with cost-effective product sourcing solutions to meet their requirements for managed, timely and competitive product procurement.

      We offer an on-line, web-based and secure product purchasing option for those clients who prefer a self-service alternative. Our eCommerce portal allows our clients to obtain product pricing, place unit or volume orders, and track the delivery process of their orders on line.

      For clients who require their purchased products to be staged, pre-configured, field tested, assembled or integrated, we provide these services in one of two extensive staging facilities (in California and Connecticut). Staging can be provided with or without the client’s participation, as directed by the client.

      Repair and Restorative Services

      Many of our clients require a guaranteed response to their system outages. Through our national staff of certified technicians and related field resources, we provide service level guarantees to our customers in response to problems with their infrastructure technology outages that are communicated to us, or that are detected through our Pivot Technology monitoring

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systems as part of a managed services solution. We offer our clients various degrees of guaranteed response depending on the severity of the outage or the client’s specific response requirements. Our technical staff providing these services is fully trained in and accredited with each of the vendors’ technology systems.

Industry

      The network computer industry has become a multi-billion dollar industry since its development in the late 1970’s. Today, industry participants face intense competition, the challenge of constant technological advancement and the ongoing need for business process optimization. The outsourcing of computer solutions is a rapidly growing trend in which a client company obtains all or a portion of its data processing requirements from a systems integrator, such as us, that specializes in the computer service, product or application required by the client.

      We believe the strongest demand for our IT services is among companies which typically lack the time and technical resources to satisfy all of their IT needs internally. These companies typically require sophisticated, experienced IT assistance to achieve their business objectives. These companies often rely on IT service providers to help implement and manage their systems. However, many of these companies rely on multiple providers for their IT needs. Generally, we believe that this reliance on multiple providers results from the fact that larger IT service providers do not target these companies, while smaller IT service providers lack sufficient breadth of services or industry knowledge to satisfy all of these companies’ needs.

      Companies have recognized the importance of IT systems in supporting their business processes and are turning to IT solutions to complete more effectively. At the same time the process of designing, developing and implementing IT solutions has become increasingly complex. The accelerated rate of development of new technologies is placing increasing demand on our clients to understand the opportunity and impact which these technologies can have on their business. IT services organizations like ours are faced with an increasing demand to keep up with these developments so as to effectively serve as consultants and advisors to our clients.

      During the period 2001 to 2004 following the burst of the “internet bubble,” the technology industry was impacted by a dramatic slowdown in IT spending. Companies refrained from funding critical technology projects necessary to keep up with the advances in IT, and often those necessary for the basic upkeep and maintenance of their installed technology base. Companies used the period of economic slowdown to reassess the return on investment associated with their past IT spending; and, we believe, concluded that past levels of IT spending can not be sustained at historical levels in today’s competitive marketplace. As such, future spending may increasingly be targeted and scrutinized from the standpoint of necessity and business impact. Importantly, companies have indicated that their intent is to focus on the effectiveness of IT solutions, not merely on the level of IT spending. This important development may result in the differentiation between technology providers who focus on offering total solutions versus those who focus on product resales.

      Advances in virtualization at the device and application level have suggested a trend toward a centralized computing model. This cycle, which started with mainframes, then workgroup mini-computers, then highly distributed applications running on micro-computers and PCs, may now be returning to a model where an increasing portion of business applications are implemented in a centralized computing model, using increasingly sophisticated terminal services to access these applications. This shift may be one of the most significant developments driving the re-definition by IT service providers of product and service solutions for the foreseeable future.

Sales and Marketing

      Our marketing efforts are focused on divisions of large corporations, middle market corporations (generally those with $50 million to $1 billion in revenues), municipalities and educational institutions. Except for major corporate accounts, these customers generally do not have internal computer support personnel. We believe that the increasing complexity of computer

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systems, increased usage of computers in the workplace and the trend toward network interconnecting will cause business and institutional customers to require significant levels of outsourced customer support services, such as those provided by us. We believe that these customers are increasingly relying on their dealers and suppliers to provide, in addition to competitive pricing, a one-stop solution-based approach to their data processing requirements. We use such an approach, which addresses purchasing, compatibility, maintenance, support, training and obsolescence.

      Our customers are diversified in such industries as securities, financial institutions, pharmaceuticals, manufacturing, distribution, law and accounting firms as well as municipalities and educational institutions. For the years ended March 31, 2005, 2004 and 2003, approximately 20%, 34%, and 18% of our revenue was from one customer, Verizon Wireless. We entered into a three-year desktop maintenance and support contract with Verizon Wireless, which expired in April 2005. We continue to provide services to Verizon and are currently negotiating an extension to the agreement.

      As of May 31, 2005, we employed 122 salespersons, sales assistants and marketing persons who are paid salaries, commissions and/or a combination of both. Our sales executives regularly call on management at companies seeking solutions for their computer problems.

      We also make joint sales presentations with certain of our major suppliers to existing and prospective customers. Certain of these suppliers’ customer fulfillment option programs allow customers who purchase directly from the supplier to apply purchases from us to their purchase obligations under those agreements. As a result, these customers have the flexibility of purchasing products from us to take advantage of our added services and our ability to integrate multiple manufacturers’ products. Most major manufacturers have instituted either a moratorium or a selective authorization procedure on the approval of additional authorized dealership locations. While in effect, such policies may preclude us and certain of our competitors from becoming authorized dealers for new vendors.

Suppliers

      We purchase software, computers and related products directly from numerous suppliers as either an authorized dealer or a value added reseller. We have entered into authorization agreements with our major suppliers. Typically, these agreements provide that we have been appointed, on a non-exclusive basis, as an authorized dealer and systems integrator of specified products of the supplier at specified locations. Most of the authorization agreements provide that the supplier may terminate the agreement with or without cause upon 30 to 90 days notice or immediately upon the occurrence of certain events. We believe that we have excellent relationships with our major suppliers; however, there can be no assurance that the aforementioned agreements will be renewed. If these agreements are not renewed, we may have difficulty in obtaining inventory at a sufficiently low cost to allow for resale at a competitive price.

      Distributors and integrators in the computer industry currently face a number of adverse business conditions, including price and gross profit margin pressures and market consolidation. In recent years, major hardware vendors have instituted aggressive price reductions in response to lower component costs and discount pricing by certain computer manufacturers. The increased price competition among major hardware vendors has resulted in declining gross margins for many computer distributors and may result in a reduction in existing vendor subsidies. We believe that these current conditions, which are forcing certain of our direct competitors out of business, may present us with opportunities to expand our business. There can be no assurance, however, that we will be able to continue to compete effectively in this industry.

      Pursuant to the terms of most of our authorized dealership agreements, we furnish firm purchase orders 30 to 90 days in advance of shipment. Under the terms of these agreements, we are generally liable for up to a 5% restocking fee to many manufacturers and suppliers for the return of previously received merchandise. We have not experienced any significant cancellation penalties or restocking fees to date.

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      We receive certain discretionary cost subsidies, typical for the industry, from certain major suppliers to promote sales and support activities relating to their products. We have used these funds to subsidize marketing, advertising and our connectivity and communication laboratory.

      Our suppliers permit us to pass through to its customers all warranties and return policies applicable to the suppliers’ products. To date, we have experienced few returns of product and have been reimbursed by the suppliers for most warranty work done for its customers. All service work after the expiration of the warranty period is at the customer’s expense. We offer service contracts of varying lengths under which we agree to be responsible for all service costs for a fixed term in exchange for a set fee paid by the customer.

      Software and other related products are purchased from numerous industry suppliers. As is customary, we do not have any long-term agreements or commitments with these suppliers, because competitive sources of supply are generally available for such products.

Competition

      The markets in which we operate are highly competitive with respect to performance, quality and price. In our professional services business our competition ranges from small, specialty integrators, to other service providers of comparable size and profile to us, as well as large national and global professional services firms and integrators. Our smaller competitors generally are highly focused on their immediate market segment and can respond more quickly to changes in customer needs. Our larger competitors generally have greater financial resources and may be able to compete more effectively than we can on prices and payment terms offered to potential customers. In our product provisioning business we directly compete with local, regional and national distributors and mail order providers of computer and IT products and services, including network integrators and corporate divisions of retail superstores.

      In addition, the computer and IT products and services industries have each experienced a significant amount of consolidation through mergers and acquisitions. In the future, we may face further competition from new market entrants and possible alliances between existing competitors. Further, certain computer superstores have expanded their marketing efforts to target segments of our customer base, which could have a material adverse impact on our operations and financial results. Some of our competitors have, or may have, greater financial, marketing and other resources than us. As a result, they may be able to respond more quickly to new or emerging technologies and changes in customer requirements, benefit from greater purchasing economies, offer more aggressive hardware and service pricing to customers, or devote greater resources to the promotion of their products and services. There can be no assurance that we will be able to compete successfully in the future with such competitors. We also compete with manufacturers, including those serving as our vendors, which market through direct sales forces and distributors. More aggressive competition by principal manufacturers of computer and IT products, such as offering a full range of services in addition to products, could have a material adverse effect on our operations and financial results.

      We believe that we will continue to be able to compete effectively against our various competitors by combining fair pricing with a wide range of customer support services designed to provide our customers with high-end technological services, multi-vendor technical support, maintenance of their computer product needs, a dedicated, trained staff of salespersons and technicians, complete solutions for single user, multi-user or network systems and specialized vertical market software.

      We believe that our backlog of unfilled customer orders is not material.

Proprietary Information

      We do not hold any patents, but have several trademarks and service marks. We also may affix copyright notices on our support service, training and service manuals. While such protection may become important to use, it is not considered essential to the success of our business. We rely

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on the know-how, experience and capabilities of our management, sales and service personnel. We require our employees to sign confidentiality or non-competition agreements.

Employees

      Our growth-through-acquisition strategy has resulted in a substantial increase in the number of employees. As of May 31, 2004, prior to commencing our acquisition strategy, we employed 151 persons and as of May 31, 2005, after completing four acquisitions, we employed 616 persons, all but 30 of whom are full-time personnel. Of these employees, 15 were in management, 122 were in sales and marketing, 388 were in technical support, 91 were in operations, finance and administration.

      As of June 29, 2005, none of our personnel was represented by a union. We consider our employee relations to be good. On May 21, 2005, we received a Notice of Filing of Petition for Union Representation Election for the cabling unit of our Info Systems, Inc. subsidiary. This unit comprises approximately 25 employees. An election with respect to union representation is scheduled for July 15, 2005.

Incorporation

      We were incorporated on May 12, 1986 in the State of New York.

Item 2. Properties

      Our principal executive offices are currently located at 850 Canal Street, Stamford, Connecticut. We occupy approximately 6,500 square feet at this location. The lease for this location expires in September, 2009. The monthly base rent for this location is approximately $11,800.

      We are also responsible for real estate taxes, insurance, utilities and maintenance expenses relating to all of our other leased facilities. These expenses for all of our leased facilities including the Stamford, Connecticut facility totaled approximately $1.4 million for the year ended March 31, 2005.

Item 3. Legal Proceedings

      None.

Item 4. Submission of Matters to a Vote of Security Holders.

      None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
             Purchases of Equity Securities.

Market for Our Common Stock

      Our common stock is traded on The Nasdaq SmallCap Market under the symbol “MTMC.” Set forth in the following table is the range of the high and low bid quotations for our common stock for each of the quarters during our last two completed fiscal years, based upon data provided by Nasdaq. These quotations reflect inter-dealer prices, without retail mark-ups, mark-downs or commissions, and may not represent actual transactions.

Record Holders

      As of June 15, 2005, there were 143 record holders of our common stock. We believe that there are approximately 1,100 beneficial holders of our common stock, based on information gathered in connection with the recently held special meeting of our shareholders.

Dividends

      We have never declared or paid any dividends to the holders of our common stock and we do not expect to pay cash dividends in the foreseeable future. We currently intend to retain all earnings for use in connection with the further development of our business and for general corporate purposes. Our board of directors will have the sole discretion in determining whether to declare and pay dividends in the future. The declaration of dividends will depend on our profitability, financial condition, cash requirements, future prospects and other factors deemed relevant by our board of directors. In addition, provisions contained in our certificate of incorporation governing the terms of our Series A Convertible Preferred Stock, as well as our financing agreements with The CIT Group/Business Credit, Inc. (“CIT”) and Textron Financial Corporation (“Textron”), place restrictions on our ability to declare or make any cash dividends on our common stock. In addition, our ability to pay cash dividends on our common stock in the future could be further limited or prohibited by the terms of future financing agreements that we may enter into or by the terms of any preferred stock that we may authorize and issue.

Equity Compensation Plan Information

      The following table sets forth, as of March 31, 2005:

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		Column A				Column B				Column C
		Number of shares to be issued upon exercise of outstanding options, warrants and rights				Weighted average exercise price of outstanding options warrants and rights				Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column A)
Equity incentive plans approved by shareholders			4,739,416			$	3.10				1,185,450
Equity incentive plans not approved by shareholders			30,000			$	5.00				Not applicable
Totals			4,769,416			$	3.11				1,185,450

      The shares issuable upon exercise of outstanding options, warrants and rights granted under plans not approved by shareholders consist of:

      Equity Compensation Plan Information excludes warrants issued in connection with our Series A-4 First Tranche Notes and Series A-4 Second Tranche Notes as these warrants were not exercisable as of March 31, 2005. A total of 984,617 such warrants were issued as of March 31, 2005 with an exercise price of $4.06 per share.

Item 6. Selected Financial Data

      The following selected financial data for the fiscal years ended March 31, 2005, 2004, 2003, 2002, and 2001 have been derived from our consolidated financial statements. This data should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.

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Income Statement Data:

Balance Sheet Data:

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

      The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our updated consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

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Use of Estimates

      The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect the amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Overview

      We are a leading national computer and communications technology management company providing IT networking, communications, software applications and data center services, including secure access, voice over internet protocol (VOIP), storage, security and messaging solutions. We serve as a single source provider of advanced technology solutions to support our clients’ mission-critical business processes. Our clients consist of divisions of Fortune 100 and Fortune 500 corporations, middle market corporations (generally those with $50 million to $1 billion in revenues), municipal, state and federal government agencies, and educational institutions. We serve clients in most major US metropolitan markets.

      We provide services to our clients that address the full life cycle of a business solution, from needs analysis, through planning, solution development, deployment, and testing, to on-going maintenance and support. We act a single-source provider of business technology solutions to our clients, an increasingly mandated requirement in today’s marketplace.

Critical Accounting Policies

      We prepare our financial statements in accordance with U.S. generally accepted accounting principles. As such, management is required to make certain estimates, judgments and assumptions it believes are reasonable based on the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. The Securities and Exchange Commission has defined critical accounting policies as policies that involve critical accounting estimates that require (a) management to make assumptions that are highly uncertain at the time the estimate is made and (b) different estimates that could have been reasonably used for the current period, or changes in the estimates that are reasonably likely to occur from period to period, which would have a material impact on the presentation of our financial condition, changes in financial condition or in result of operations. Based on this definition, our most critical policies include: revenue recognition, allowance for doubtful accounts, inventory valuation reserve, impairment of long-lived assets, the assessment of recoverability of goodwill and intangible assets, and valuation of deferred tax assets.

Revenue Recognition

      We recognize revenue in accordance with Staff Accounting Bulletin No. 104. We recognize revenue from the sales of hardware when the rights and risks of ownership have passed to the customer, upon shipment or receipt by the customer, depending on the terms of the sales contract with the customer. Revenue from the sales of software not requiring significant modification or customization is recognized upon delivery or installation. Revenue from services is recognized upon performance and acceptance after consideration of all of the terms and conditions of the customer contract. Service contracts generally do not extend over one year, and are billed when persuasive evidence of an arrangement exists, the sales price is fixed and determinable, and collection of the resulting receivable is reasonable assured. Revenue arrangements generally do not include specific customer acceptance criteria. For arrangements with multiple deliverables, delivered items are accounted for separately, provided that the delivered item has value to the customer on a stand alone basis and there is objective and reliable evidence of the fair value of the undelivered items. Revenue billed on retainer is recognized as services are performed and amounts not recognized are recorded as deferred revenue.

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      We periodically receive discretionary cost reimbursements from suppliers. These reimbursements are accounted for as reductions to the cost of sales products.

Goodwill and Intangibles

      The Company tests goodwill for impairment at the reporting unit level on an annual basis or more frequently if the Company believes indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves calculating the fair values of the applicable reporting units using the income approach methodology of valuation that includes the discounted cash flow method as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value