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<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:0pt; margin-bottom:30pt; font-family:Times New Roman" align=center><B>Washington, D.C. 20549</B></P>
<P style="margin-top:0pt; margin-bottom:30pt; font-family:Times New Roman" align=center><B>___________________________________________</B></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><B>FORM 8-K</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>PURSUANT TO SECTION 13 OR 15(D) OF THE</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; font-family:Times New Roman" align=center>Date of Report (Date of earliest event reported): &nbsp;August 17, 2005</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>MARKLAND TECHNOLOGIES, INC.</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>(Exact Name of Registrant as Specified in Charter)</I></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=212.8><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=center><B>Florida</B></P>
</TD><TD valign=top width=212.8><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=center><B>000-28863</B></P>
</TD><TD valign=top width=212.8><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=center><B>84-1331134</B></P>
</TD></TR>
<TR><TD valign=top width=212.8><P style="margin:0pt; font-family:Times New Roman" align=center><I>(State or other jurisdiction</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>of incorporation)</I></P>
</TD><TD valign=top width=212.8><P style="margin:0pt; font-family:Times New Roman" align=center><I>(Commission</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>File Number)</I></P>
</TD><TD valign=top width=212.8><P style="margin:0pt; font-family:Times New Roman" align=center><I>(IRS Employer</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>Identification Number)</I></P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman"><I><BR></I></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;88 Royal Little Drive, Providence, RI &nbsp;02904</U></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><I>&nbsp;(Address of principal executive offices) (Zip Code)</I></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><B><U>276 Washington Street, No. 367, &nbsp;Boston, MA 02108</U></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align=center><I>(Mailing Address)</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>(617) 973-5104</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>(Registrant&#146;s telephone number, including area code)</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>N/A</U></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><I>(Former Name or Former Address, if Changed Since Last Report)</I></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman">Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below).</P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman">[ ] &nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman">[ ] &nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman">[ ] &nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman">[ ] &nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>
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<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 1.01</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Entry Into a Material Definitive Agreement.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The Board of Directors of Markland Technologies, Inc. does not believe that the current market capitalization of Markland reflects the underlying value of its wholly-owned subsidiary, E- OIR Technologies, Inc. In an effort to maximize shareholder value, on August 17, 2005, Markland sold all of the outstanding stock of EOIR to its majority-owned subsidiary, Technest Holdings, Inc. (TCNH.OB) pursuant to a Stock Purchase Agreement with Technest. &nbsp;As consideration for our stock of EOIR, Technest issued 12 million shares of its common stock to us, and, as a result, our ownership of Technest increased from 85% to approximately 98% on a primary basis and from 39% to approximately 82% on a fully diluted basis (assuming the conversion of all of Technest&#146;s convertible securities and the exercise of all warrants to purchase Technest common stock). &nbsp;This reorganization did not result in a change of control of EOIR. &nbsp;We did not need stockholder consent in order to complete this reorganization. In connection with this reorganization, the Board has declared a stock dividend of $10 million worth of its Technest common stock to Markland common stock holders as more fully described below in Item 8.01.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">EOIR offers products and services which include: (i) design and fabrication of customized remote sensor systems and platforms for U.S. Department of Defense, United States intelligence agencies and U.S. Department of Homeland Security applications; (ii) remote sensor data collection, data signal processing and data exploitation; and (iii) training in the use of remote sensor systems and data. We acquired EOIR on June 30, 2004. &nbsp;EOIR generated 95% of our revenue for fiscal 2004.</P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Because we continue to own a majority interest in Technest, we will continue to include Technest results in our consolidated financial statements.</P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The description contained in this item of the transaction contemplated by the Stock Purchase Agreement is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 5.02</B></P>
<P style="margin:0pt; padding-left:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.</B></P>
<P style="margin:0pt; padding-left:72pt; text-indent:-72pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">On August 15, 2005, Gino M. Pereira, our Chief Financial Officer, was elected to our board of directors to fill the vacancy left by the resignation of Kenneth P. Ducey. &nbsp;Mr. Pereira is party to an employment agreement with us dated January 2, 2005. Mr. Pereira&#146;s employment agreement was filed as Exhibit 99.7 to our Current Report on Form 8-K filed on January 7, 2005 and is incorporated herein by reference. &nbsp;To date, Mr. Pereira has received an aggregate of $275,000 in cash bonuses. &nbsp;Prior to becoming our Chief Financial Officer, from August to December 2004, Mr. Pereira provided consulting services to Markland in connection with the preparation of financial statements and other related services. For these services, he received $62,497.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">2</P>
<P style="margin:0pt; text-indent:234pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 8.01 </B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other Events</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<B><P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"></B><I>Stock Dividend of Technest Common Stock</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">In connection with the reorganization described in Item 1.01 above, our board of directors declared a dividend to the holders of our common stock of $10 million worth of shares of Technest common stock that it currently owns, up to a maximum of 2.5 million shares of Technest common stock. &nbsp;The record date for the dividend is May 1, 2006 and the dividend date is July 5, 2006. &nbsp;The actual number of shares of Technest common stock to be distributed will be calculated based on a per share price equal to the average closing price of the Technest Stock as reported by the National Association of Securities Dealers Automatic Quotations service for the ten trading days ending June 30, 2006; however, in no event shall the number of shares of the Technest common stock distributed exceed 2.5 million. To illustrate:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>If the average closing price of the Technest Stock as reported by the National Association of Securities Dealers Automatic Quotations service for the ten trading days ending June 30, 2006 is:</I></P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>then the number of shares of Technest common stock that will be distributed to the holders of our common stock will be </I></P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">$4.00 per share</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">2,500,000 shares</P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">$10.00 per share</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">1,000,000 shares</P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">$20.00 per share</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=240><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">500,000 shares</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Please note that the table provided above is not a prediction of the future price of Technest common stock.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">We will not deliver fractional shares of Technest common stock in connection with this dividend. Following this dividend, we will continue to own a majority of Technest on both primary and fully diluted (assuming the conversion of all of Technest&#146;s convertible securities and the exercise of all warrants to purchase Technest common stock) bases.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Technest will file a registration statement registering these shares prior to the distribution date. This is not an offer to sell these shares, and these shares may not be offered or sold in any state or jurisdiction in which such offer or sale would be unlawful prior to the registration or qualification of such shares under the laws of such state or jurisdiction.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Update on Proposed Financing</I></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><I><BR></I></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">In Amendment No. 1 to our registration statement on Form SB-2 filed on August 9, 2005 (File No. 333-126051), we had disclosed a financing transaction that we were contemplating at the time pursuant to which we had planned to raise sufficient financing to repay $8.8 million of our indebtedness to the former owners of EOIR and provide additional working capital as more fully described in Amendment No. 1. &nbsp;We are no longer actively pursuing this transaction at this time. &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">3</P>
<P style="margin:0pt; text-indent:234pt; font-family:Times New Roman; font-size:9pt"><BR></P>
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<I><P style="page-break-before:always; margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></I></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 9.01</B></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Financial Statements and Exhibits</B></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Markland is not required to provide financial statements for the reorganization discussed in Item 1.01; however, Technest will be filing financial statements related to the reorganization as required by this Item. Please refer to Technest&#146;s SEC filings (Commission File No. 000-27023) for these financial statements.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(c) Exhibits</B></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="border:0.5pt solid #000000" valign=top width=61.2 rowspan=2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Exhibit No.</P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=534 rowspan=2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Description</P>
</TD></TR>
<TR></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=61.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.1</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=534><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Stock Purchase Agreement between Technest Holdings, Inc. and Markland Technologies, Inc. dated August 17, 2005. &nbsp;</P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=61.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.2</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=534><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Employment Agreement between Markland Technologies, Inc. and Gino M. Pereira, dated January 2, 2005.</P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=61.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">99.1</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=534><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Press release announcing reorganization and stock dividend dated August 17, 2005.</P>
</TD></TR>
</TABLE>
<B><P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></B></P>
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<BR></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">4</P>
<P style="margin:0pt; text-indent:234pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. </P>
<P style="margin:0pt; padding-left:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>MARKLAND TECHNOLOGIES, INC.</B></P>
<P style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By: &nbsp;<U>&nbsp;&nbsp;&nbsp;/s/ Robert Tarini &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
<P style="margin:0pt; padding-left:216pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Robert Tarini</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:216pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Chief Executive Officer</P>
<P style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date: August 17, 2005</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">5</P>
<P style="margin:0pt; text-indent:234pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
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<P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>EXHIBIT INDEX</B></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="border:0.5pt solid #000000" valign=top width=67.2 rowspan=2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Exhibit No.</P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=528 rowspan=2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Description</P>
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<TR></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=67.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.1</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=528><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Stock Purchase Agreement between Technest Holdings, Inc. and Markland Technologies, Inc. dated August 17, 2005. &nbsp;Filed herewith.</P>
</TD></TR>
<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=67.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.2</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=528><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Employment Agreement between Markland Technologies, Inc. and Gino M. Pereira, dated January 2, 2005. &nbsp;Filed as Exhibit 99.7 to our Current Report on Form 8-K filed on January 7, 2005 (File No. 000-28863) and is incorporated herein by reference.</P>
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<TR><TD style="border-left:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=67.2><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">99.1</P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=528><P style="margin-top:0pt; margin-bottom:12pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Press Release announcing reorganization and stock dividend dated August 17, 2005. &nbsp;Filed herewith.</P>
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SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):  August 17, 2005
MARKLAND TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Charter)
Florida
000-28863
84-1331134
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
88 Royal Little Drive, Providence, RI  02904
(Address of principal executive offices) (Zip Code)
276 Washington Street, No. 367,  Boston, MA 02108
(Mailing Address)
(617) 973-5104
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below).
[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry Into a Material Definitive Agreement.
The Board of Directors of Markland Technologies, Inc. does not believe that the current market capitalization of Markland reflects the underlying value of its wholly-owned subsidiary, E- OIR Technologies, Inc. In an effort to maximize shareholder value, on August 17, 2005, Markland sold all of the outstanding stock of EOIR to its majority-owned subsidiary, Technest Holdings, Inc. (TCNH.OB) pursuant to a Stock Purchase Agreement with Technest.  As consideration for our stock of EOIR, Technest issued 12 million shares of its common stock to us, and, as a result, our ownership of Technest increased from 85% to approximately 98% on a primary basis and from 39% to approximately 82% on a fully diluted basis (assuming the conversion of all of Technest's convertible securities and the exercise of all warrants to purchase Technest common stock).  This reorganization did not result in a change of control of EOIR.  We did not need stockholder consent in order to complete this reorganization. In connection with this reorganization, the Board has declared a stock dividend of $10 million worth of its Technest common stock to Markland common stock holders as more fully described below in Item 8.01.
EOIR offers products and services which include: (i) design and fabrication of customized remote sensor systems and platforms for U.S. Department of Defense, United States intelligence agencies and U.S. Department of Homeland Security applications; (ii) remote sensor data collection, data signal processing and data exploitation; and (iii) training in the use of remote sensor systems and data. We acquired EOIR on June 30, 2004.  EOIR generated 95% of our revenue for fiscal 2004.
Because we continue to own a majority interest in Technest, we will continue to include Technest results in our consolidated financial statements.
The description contained in this item of the transaction contemplated by the Stock Purchase Agreement is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
On August 15, 2005, Gino M. Pereira, our Chief Financial Officer, was elected to our board of directors to fill the vacancy left by the resignation of Kenneth P. Ducey.  Mr. Pereira is party to an employment agreement with us dated January 2, 2005. Mr. Pereira's employment agreement was filed as Exhibit 99.7 to our Current Report on Form 8-K filed on January 7, 2005 and is incorporated herein by reference.  To date, Mr. Pereira has received an aggregate of $275,000 in cash bonuses.  Prior to becoming our Chief Financial Officer, from August to December 2004, Mr. Pereira provided consulting services to Markland in connection with the preparation of financial statements and other related services. For these services, he received $62,497.
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Item 8.01
Other Events
Stock Dividend of Technest Common Stock
In connection with the reorganization described in Item 1.01 above, our board of directors declared a dividend to the holders of our common stock of $10 million worth of shares of Technest common stock that it currently owns, up to a maximum of 2.5 million shares of Technest common stock.  The record date for the dividend is May 1, 2006 and the dividend date is July 5, 2006.  The actual number of shares of Technest common stock to be distributed will be calculated based on a per share price equal to the average closing price of the Technest Stock as reported by the National Association of Securities Dealers Automatic Quotations service for the ten trading days ending June 30, 2006; however, in no event shall the number of shares of the Technest common stock distributed exceed 2.5 million. To illustrate:
If the average closing price of the Technest Stock as reported by the National Association of Securities Dealers Automatic Quotations service for the ten trading days ending June 30, 2006 is:
then the number of shares of Technest common stock that will be distributed to the holders of our common stock will be
$4.00 per share
2,500,000 shares
$10.00 per share
1,000,000 shares
$20.00 per share
500,000 shares
Please note that the table provided above is not a prediction of the future price of Technest common stock.
We will not deliver fractional shares of Technest common stock in connection with this dividend. Following this dividend, we will continue to own a majority of Technest on both primary and fully diluted (assuming the conversion of all of Technest's convertible securities and the exercise of all warrants to purchase Technest common stock) bases.
Technest will file a registration statement registering these shares prior to the distribution date. This is not an offer to sell these shares, and these shares may not be offered or sold in any state or jurisdiction in which such offer or sale would be unlawful prior to the registration or qualification of such shares under the laws of such state or jurisdiction.
Update on Proposed Financing
In Amendment No. 1 to our registration statement on Form SB-2 filed on August 9, 2005 (File No. 333-126051), we had disclosed a financing transaction that we were contemplating at the time pursuant to which we had planned to raise sufficient financing to repay $8.8 million of our indebtedness to the former owners of EOIR and provide additional working capital as more fully described in Amendment No. 1.  We are no longer actively pursuing this transaction at this time.
3
Item 9.01
Financial Statements and Exhibits
Markland is not required to provide financial statements for the reorganization discussed in Item 1.01; however, Technest will be filing financial statements related to the reorganization as required by this Item. Please refer to Technest's SEC filings (Commission File No. 000-27023) for these financial statements.
(c) Exhibits
Exhibit No.
Description
10.1
Stock Purchase Agreement between Technest Holdings, Inc. and Markland Technologies, Inc. dated August 17, 2005.
10.2
Employment Agreement between Markland Technologies, Inc. and Gino M. Pereira, dated January 2, 2005.
99.1
Press release announcing reorganization and stock dividend dated August 17, 2005.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MARKLAND TECHNOLOGIES, INC.
By:
/s/ Robert Tarini
Robert Tarini
Chief Executive Officer
Date: August 17, 2005
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EXHIBIT INDEX
Exhibit No.
Description
10.1
Stock Purchase Agreement between Technest Holdings, Inc. and Markland Technologies, Inc. dated August 17, 2005.  Filed herewith.
10.2
Employment Agreement between Markland Technologies, Inc. and Gino M. Pereira, dated January 2, 2005.  Filed as Exhibit 99.7 to our Current Report on Form 8-K filed on January 7, 2005 (File No. 000-28863) and is incorporated herein by reference.
99.1
Press Release announcing reorganization and stock dividend dated August 17, 2005.  Filed herewith.
6