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): ~~October~~March 13, ~~2005~~2006

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~~ 88 ~~Washington~~Royal ~~Street~~Little Drive, ~~No. 367~~Providence, ~~Boston,~~ ~~MA 02108~~RI 02904

(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.

~~Item~~Stockholder 3Agreement with Technest Holdings, Inc.02.

~~Unregistered~~On ~~Sales~~March 13, 2006, we entered into a stockholder agreement (the “Stockholder Agreement”) with Technest Holdings, Inc., a Nevada corporation and our majority-owned (“Technest”), in order to clarify and define terms relating to (i) the issuance of ~~Equity~~Technest’s ~~Securities~~securities, (ii) Technest’s corporate governance, (iii) the listing of Technest’s securities on The NASDAQ Capital Market, (iv) registration of shares of Technest’s common stock currently held by Markland, (v) intellectual property rights and (v) the provision by Markland of certain corporate services to Technest.

~~Private~~Pursuant ~~Equity~~to ~~Credit~~the ~~Agreement~~terms ~~with~~of ~~Brittany~~the ~~Capital~~Stockholder ~~Management~~Agreement, ~~Ltd.~~Markland has agreed:

Summary. On October 13, 2005, we entered into the private equity credit agreement with Brittany Capital Management Limited (whom we refer to as Brittany), a limited liability company organized and existing under the laws of The Bahamas. Under the private equity credit agreement, we may from time to time at our option draw up to $5 million in exchange for shares of our common stock, subject to conditions outside of the control of Brittany. ·

~~Put~~For ~~Shares. Each draw under the private equity credit agreement is structured as~~ a ~~put~~period ~~option, wherein we require Brittany to purchase a number~~ of ~~shares~~twelve ofmonths ~~our~~from ~~common stock after a discount to~~ the ~~market~~date ~~price is applied. Specifically, each share is sold at a price equal to 93%~~ of the ~~average~~agreement, ofnot ~~any three closing bid prices during the ten trading days immediately following the put date. We refer~~ to ~~these~~vote ~~shares as~~ the ~~put~~ shares. ~~The~~held ~~purchases~~by ~~are~~it to ~~take~~increase ~~place from time to time over~~ the ~~course~~size of aTechnest’s ~~commitment~~board ~~period extending 36 months after the effective date~~ of ~~the~~directors ~~registration~~or ~~statement~~to onremove ~~Form~~any ~~SB-2 filed on October 14, 2005, under which we are registering for resale 10,000,000 put shares. The timing~~ of the ~~purchases~~directors bycurrently ~~Brittany~~in ~~is at our sole discretion.~~ office;

Blackout Shares. If we suspend sales of common stock pursuant to the above referenced registration statement within 15 trading days of a sale of common stock to Brittany and our stock price declines during the suspension period, we will be required to issue that number of additional shares of our common stock which, when combined with the shares purchased during the 15 trading days immediately preceding the suspension, will equal the number of shares Brittany would have received had the purchase been made at the conclusion of the suspension period (at the lower per share price). We refer to these shares as blackout shares.·

~~Number~~To ofconsent ~~shares~~to ~~issuable~~Technest’s ~~under~~participation ~~the~~in ~~Private~~up ~~Equity~~to ~~Credit~~two ~~Agreement.~~offerings ~~We cannot predict the actual number~~ of ~~shares of~~ common stock ~~issuable~~in ~~under~~ the ~~Private~~next ~~Equity~~twelve ~~Credit Agreement~~months, inprovided ~~part~~that ~~because~~Technest ~~the~~does ~~purchase price of the shares will fluctuate based on prevailing market conditions and we have~~ not ~~determined~~offer ~~the total amount of cash advances we intend to draw. Nonetheless, we can estimate the number of~~ shares of ~~our~~ common stock ~~that~~under ~~will be issued using~~ certain ~~assumptions~~conditions.

·Pursuant ~~The~~to ~~registration statement mentioned above only covers~~ the ~~resale~~terms of ~~11,727,712 shares issuable to Brittany under~~ the ~~private~~Stockholder ~~equity credit agreement. In the event we desire to draw down any available amounts remaining under the private equity credit agreement after we have issued the 11~~Agreement,~~727,712~~ ~~shares,~~Technest weis ~~will~~required ~~have~~ to ~~file a new registration statement to cover such additional shares that we would issue for additional draw downs under the Private Equity Credit Agreement.~~:

· Based on the closing price of our stock of $0.0245 on October 11, 2005, we would have to issue to Brittany 219,442,616 shares of our common stock in order to draw down the entire $5 million available to us under the Private Equity Credit Agreement. Assuming all of these shares are issued, they would represent approximately 67% of our currently issued and outstanding common stock.

~~Dilution. The~~refrain ~~offering~~from ~~price~~issuing ~~of our common stock for~~ any ~~put~~shares ~~under the private equity credit agreement is based on a discounted market price calculated at the time~~ of ~~the~~its ~~put.~~common Asstock aor ~~result,~~securities ~~there~~convertible isinto anits ~~inverse~~common ~~relationship between our~~ stock ~~price~~without ~~and~~ the ~~number~~consent of ~~shares~~Markland ~~we may issue under this agreement. That is, any decline in the price of our common stock would require us to put additional shares~~ for a ~~given~~period ~~draw.~~of ~~The~~twenty-six ~~inverse~~months, ~~relationship~~other isthan ~~demonstrated by the table set forth below~~1,000,000 ~~which shows the number of~~ shares to be issued under ~~the~~Technest’s ~~private~~2006 ~~equity~~Stock ~~credit~~Award ~~agreement~~Plan ~~for a hypothetical $50,000 draw-down at hypothetical market prices of $0.05, $0.04, $0.03, $0.02~~ and ~~$0.01~~certain ~~per~~permissible ~~share.~~offerings;

~~Price sensitivity of dilution resulting from Private Equity Credit Agreement~~·

Hypothetical Draw Amount	Hypothetical Market Price	Discounted Market Price	Shares to be issued
$50,000	$0.05	$0.0465	1,075,268
$50,000	$0.04	$0.0372	1,344,086
$50,000	$0.03	$0.0279	1,792,114
$50,000	$0.02	$0.0186	2,688,172
$50,000	$0.01	$0.0093	5,376,344

Maintain a board of directors consisting of five directors, not less than three of whom shall be “independent” directors as defined by the National Association of Securities Dealers;

~~Any sale of shares pursuant to the private equity credit agreement will have a dilutive impact on our stockholders. Additional dilution may result because:~~·

·Comply ~~The~~with ~~outstanding shares are issued based on discount to~~ the ~~market~~corporate ~~rate.~~governance Asrequirement aset ~~result,~~forth ~~the~~in ~~lower~~ the ~~stock~~National ~~price~~Association ~~around the time we require an advance, the greater the number~~ of ~~shares~~Securities ~~that~~Dealers’ ~~Brittany~~Marketplace ~~will receive. This could result in substantial dilution to the interests of other holders of common stock.~~Rules;

· ~~To the extent Brittany sells its common stock, the common stock price may decrease due to the additional shares in the market. Such sales could further depress the stock price.~~

·Submit ~~The~~an ~~significant~~application ~~downward~~for ~~pressure~~inclusion on ~~the~~The ~~price~~NASDAQ ofCapital ~~the~~Market ~~common~~and ~~stock~~take asall ~~Brittany~~such ~~sells~~actions ~~material~~as ~~amounts~~may ofbe ~~common~~necessary ~~stocks~~to ~~could~~cause ~~encourage short sales by Brittany or others. Short sales could place further downward pressure on~~ the ~~price~~application ofto ~~the~~be ~~common~~accepted; ~~stock.~~and

Other Restrictions. Any proceeds we receive from the equity line will be subject to restrictions on use. Pursuant to a Securities Purchase Agreement, dated September 21, 2004, by and among us and DKR Soundshore Oasis Holding Fund, Ltd. and DKR Soundshore Strategic Holding Fund, Ltd., 75% of all proceeds received pursuant to a private equity line must first be used to satisfy our obligations under those certain convertible promissory notes held DKR Soundshore Oasis Holding Fund, Ltd. and DKR Soundshore Strategic Holding Fund, Ltd. A copy of this Securities Purchase Agreement is filed as an attachment to our current report on Form 8-K filed on September 24, 2004 (SEC File # 000-28863).·

~~This~~Make ~~summary~~twelve ~~highlights~~monthly ~~selected~~payments, ~~information~~beginning ~~regarding~~in ~~the~~April ~~terms~~2006, ofin ~~this~~the ~~agreement.~~amount ~~It may not contain all~~ of ~~the~~$83,333 ~~information that is important~~ to ~~you. You~~Markland ~~should~~for ~~refer~~certain ~~to the~~services ~~Private Equity Credit Agreement~~ and ~~Registration~~other ~~Rights Agreement filed as exhibits to the registration statement on Form SB-2 filed with the SEC on October 14, 2005 (SEC File No~~considerations. ~~333-129017), which are herein incorporated by reference.~~

~~Prior~~Technest ~~Relationships~~also granted Markland certain registration rights pursuant to which Technest agreed to submit registration statements registering all or a portion of those shares of its common stock held by Markland, or any parties to whom Markland may transfer those shares, with ~~Brittany~~the ~~Capital~~Securities ~~Management~~and Exchange Commission for public resale. Such registration statements are to be prepared and submitted from time to time upon the written request of Markland, with certain limitations.

OnThe ~~October~~above 4,description ~~2005,~~summarizes wethe ~~issued~~material ~~Brittany~~terms ~~Capital Management 3,750,000 shares, in lieu~~ of ~~cash, in satisfaction of previously accrued liquidated damaged due in connection with~~ the ~~Series~~Stockholder ~~D Preferred Stock Restriction~~ Agreement ~~entered into on January 5~~, ~~2005~~which ~~between~~is usfiled ~~and~~as ~~James,~~Exhibit ~~LLC, our largest Series D preferred stock shareholder~~10. ~~Additional~~1 ~~information~~to ~~concerning~~this ~~the~~Current ~~issuance~~Report ~~of these shares can be found in our current report~~ on Form 8-K ~~filed~~and onis ~~October~~incorporated 7,by ~~2005,~~reference asherein. ~~amended~~For onfurther ~~October 13, 2005. Additional~~ information ~~concerning~~on the ~~Series~~Stockholder ~~D Preferred Stock Restriction~~ Agreement ~~can be found in our current report on Form 8-K filed on January 11~~, ~~2005.~~please ~~This~~refer transaction was not registered under the Securities Act, but was made in reliance upon the exemptions from the registration requirements of the Securities Act set forth in Section 4(2) thereof and Rule 506 of Regulation D promulgated thereunder, insofar as such securities were sold only to ~~"accredited~~Exhibit ~~investors" within the meaning of Rule 501 of Regulation D~~10. 1.

WeLicense ~~had previously entered into a Private Equity Credit~~ Agreement with ~~Brittany Capital Management, Ltd. on September 10, 2003 pursuant to which~~ Markland ~~had agreed to issue and sell to Brittany up to $10 million worth of our common stock. This agreement expired on September 10~~Technologies, ~~2004 and no shares were sold pursuant to that agreement~~Inc.

On March 13, 2006, we entered into a license agreement with Technest (the “License Agreement”). Pursuant to the License Agreement, Technest granted Markland an exclusive, world-wide license to make, use and sell products and services based on Technest’s intellectual property, to parties other than federal, state or local government agencies involved in intelligence, military, law enforcement or homeland defense functions. The license granted by the License Agreement shall be in effect until all of Technest’s current patents or patent applications have expired or until such time as the License Agreement is terminated pursuant to its terms.

Pursuant to the terms of the License Agreement, Markland is required to pay Technest twenty-five percent of the net gross profits, as defined in the License Agreement, Markland realizes on any sale of any product or service utilizing the licensed intellectual property.

Additionally, if at the end of three years from the date of execution of the License Agreement, Markland has not realized enough net gross profits to generate an aggregate $300,000 of royalties, or $150,000 in royalties on an annual basis thereafter, the license shall become non-exclusive.

As a condition of the License Agreement, Technest is required to take all steps reasonably necessary to maintain its current patents and prosecute its current patent applications.

The License Agreement provides that Markland may cancel the agreement at any time upon 180 days notice. Technest may cancel the License Agreement if Markland fails to make a required royalty payment and does not cure such failure within thirty days of receiving notice of the failure or Markland violates the licensing terms of the License Agreement.

The above description summarizes the material terms of the License Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein. For further information on the License Agreement, please refer to Exhibit 10.2.

Item 5.02

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Resignation of Joseph P. Mackin as President and Director

On March 13, 2006, Joseph P. Mackin resigned his positions of President/Chief Operating Officer and director of Markland. In connection with Dr. Mackin’s resignation, on March 13, 2006, we entered into a release and indemnification agreement with Dr. Mackin. Pursuant to this agreement, each party agreed to release any claims they may have against the other party. In addition, we agreed to indemnify Dr. Mackin in the event that he is made a party to a lawsuit on account of his having served as a director or officer of Technest. Dr. Mackin also released us from any claims that he may have had against us. This is a brief description of the release and indemnification agreement with Dr. Mackin, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated by reference herein. For further information on this agreement, please refer to Exhibit 10.3.

Item 9.01

Financial Statements and Exhibits

(c) Exhibits

Exhibit No.	Description	~~Filed with this 8-K~~	~~Incorporated by reference~~
			Form	Filing Date	Exhibit No.
10.1	Stockholders’ Agreement between Markland Technologies, Inc. and Technest Holdings, Inc. dated March 13, 2006.
10.1	Private Equity Credit Agreement dated October 13, 2005 between Markland Technologies, Inc. and Brittany Capital Management, Ltd.		SB-2 (SEC File No. 333-129017)	October 14, 2005	10.92
10.2	License Agreement between Markland Technologies, Inc. and Technest Holdings, Inc. dated March 13, 2006.
10.2	Registration Rights Agreement dated October 13, 2005 between Markland Technologies, Inc. and Brittany Capital Management, Ltd.		SB-2 (SEC File No. 333-129017)	October 14, 2005	10.93
10.3	Release and Indemnification Agreement between Joseph P. Mackin and Markland Technologies, Inc. dated March 13, 2006.

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/ Gino M. Pereira

Gino M. Pereira

Chief Financial Officer

Date: ~~October~~ 18March 16, ~~2005~~2006

EXHIBIT INDEX

Exhibit No.	Description	~~Filed with this 8-K~~	~~Incorporated by reference~~
			Form	Filing Date	Exhibit No.
10.1	Stockholders’ Agreement between Markland Technologies, Inc. and Technest Holdings, Inc. dated March 13, 2006. Filed herewith.
10.1	Private Equity Credit Agreement dated October 13, 2005 between Markland Technologies, Inc. and Brittany Capital Management, Ltd.		SB-2 (SEC File No. 333-129017)	October 14, 2005	10.92
10.2	License Agreement between Markland Technologies, Inc. and Technest Holdings, Inc. dated March 13, 2006. Filed herewith.
10.2	Registration Rights Agreement dated October 13, 2005 between Markland Technologies, Inc. and Brittany Capital Management, Ltd.		SB-2 (SEC File No. 333-129017)	October 14, 2005	10.93
10.3	Release and Indemnification Agreement between Joseph P. Mackin and Markland Technologies, Inc. dated March 13, 2006. Filed herewith.

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