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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               __________________

                                   FORM 10-QSB
                               __________________

(MARK ONE)

   [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2005

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                         COMMISSION FILE NUMBER 0-29204
                               __________________

                              GLOBAL MATRECHS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                         58-2153309
   (STATE OR OTHER JURISDICTION OF                           (IRS EMPLOYER
    INCORPORATION OR ORGANIZATION)                         IDENTIFICATION NO.)

                                 90 GROVE STREET
                                    SUITE 201
                              RIDGEFIELD, CT 06877
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (203) 431-6665
                           (ISSUER'S TELEPHONE NUMBER)
                               __________________

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 of 15(d) of the 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 [ ] No |X|

     As of May 26, 2005, there were 78,322,888 shares of our common stock, par
value $0.0001 per share, outstanding.

     Transitional Small Business Disclosure Format (check one): Yes [ ] No |X|
================================================================================
<PAGE>


                              GLOBAL MATRECHS, INC.

                                   FORM 10-QSB

                                QUARTERLY REPORT

                                 MARCH 31, 2005

                                TABLE OF CONTENTS


PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements..............................................  2
           Consolidated Balance Sheets.......................................  2
           Consolidated Statements of Operations.............................  4
           Consolidated Statements of Cash Flows.............................  5
           Notes to Unaudited Consolidated Financial Statements..............  7
Item 2.    Management's Discussion and Analysis of Financial Condition
             and Results of Operations....................................... 11
Item 3.    Controls and Procedures........................................... 25

PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings................................................. 25
Item 6.    Exhibits.......................................................... 25












                                        1
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              GLOBAL MATRECHS, INC.

     CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2005 AND DECEMBER 31, 2004

                                                      MARCH 31,     DECEMBER 31,
                                                         2005           2004
                                                     -----------    -----------
                                                     (unaudited)

                                     ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                         $    42,905    $   131,470

   Accounts receivable, net                              144,128         94,551
   Inventory                                             142,238         67,906
   Prepaid expenses                                      509,551        397,015
   Loan to Tulix                                          74,083         72,858
   Other current assets                                    5,000            --
                                                     -----------    -----------
     Total current assets                                917,905        763,800
Fixed Assets                                               5,568         28,430
Prepaid expenses, non-current                            383,697        125,292
Deposits                                                   2,575          2,575
Note receivable                                          250,000            --
Investment in Tulix                                       51,949         51,949
Intangible assets                                        986,223        986,223
Less:  Accumulated amortization                         (361,615)      (312,304)
Goodwill                                               1,469,108      1,469,108
                                                     -----------    -----------
Intangibles, net                                       2,093,716      2,143,027
                                                     -----------    -----------
     Total assets                                    $ 3,705,410    $ 3,115,073
                                                     ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable and accrued expenses             $   601,822    $   577,718
   Current maturities of long term debt                  245,315        286,162
    Convertible loans payable                          3,227,261      1,702,245
   Convertible loans payable - discount                 (800,000)      (375,000)
                                                     -----------    -----------
   Convertible loans payable, net                      2,427,261      1,327,245
                                                     -----------    -----------
     Total current liabilities                         3,274,398      2,191,125
   Due to officer                                         89,650        147,309
   Note payable                                          250,000            --
   Long term debt                                        400,000        415,302
                                                     -----------    -----------
       Total liabilities                               4,014,048      2,753,736
                                                     -----------    -----------
   Convertible preferred stock                         5,392,783      6,128,223
                                                     -----------    -----------

STOCKHOLDERS' DEFICIT:
   Common stock, $.0001 par value, 300,000,000
     shares authorized, 66,897,187 shares issued
     and outstanding at March 31, 2005 and
     45,895,431 shares issued issued and
     outstanding at December 31, 2004                      6,609          4,590
   Preferred stock, Series H, $.01 par value,
     13,500 shares authorized, 12,000 shares
     issued and outstanding at March 31, 2005
     and December 31, 2004, convertible,
     participating, $12,000,000 liquidation
     value at March 31, 2005 and December
     31, 2004                                                120            120

                                        2
<PAGE>

   Preferred stock, Series I, $.01 par value,
     490.5 shares authorized, 490.5 shares
     issued and outstanding at March 31, 2005
     and December 31, 2004, convertible,
     participating, $49,050 liquidation value at
     March 31, 2005                                            5              5
   Treasury stock, 5,028,695 shares at March
     31, 2005 and December 31, 2004                     (327,484)      (327,484)
   Additional paid-in capital                         25,150,123     23,441,241
   Accumulated deficit                               (30,530,794)   (28,885,358)
                                                     -----------    -----------
     Total stockholder deficit                        (5,701,421)    (5,766,886)
                                                     -----------    -----------
     Total liabilities and stockholder deficit       $ 3,705,410    $ 3,115,073
                                                     ===========    ===========


























   The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>

                              GLOBAL MATRECHS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

                                                    THREE MONTHS ENDED MARCH 31,
                                                    ----------------------------
                                                         2005           2004
                                                     -----------    -----------
                                                            (unaudited)


Revenues                                             $   369,681    $       620
Cost of revenues                                         148,203            558
                                                     -----------    -----------
Gross profit                                             221,478             62
                                                     -----------    -----------

Operating expenses:
   Selling, general and administrative                   612,611        262,566
   Depreciation and amortization                          51,268         49,311
                                                     -----------    -----------
     Total operating expenses                            663,879        311,877
                                                     -----------    -----------
Operating loss                                          (442,401)      (311,815)
Other expenses (income)
   Interest expense                                    1,204,259         82,364
   Interest income                                        (1,225)          --
                                                     -----------    -----------
Loss from continuing operations before income
   taxes                                              (1,645,435)      (394,179)
Income tax provision (benefit)                              --             --
                                                     -----------    -----------
Loss from continuing operations                       (1,645,435)      (394,179)
Income from discontinued operations                         --           43,189
                                                     -----------    -----------
Net loss                                             $(1,645,435)   $  (350,990)
                                                     ===========    ===========
Income (loss) per share - basic and diluted:
   Continuing operations                             $    (0.028)   $    (0.026)
   Discontinued operations                                  --            0.003
                                                     -----------    -----------
                                                     $    (0.028)   $    (0.023)
                                                     ===========    ===========
Weighted number of shares outstanding - basic
   and diluted                                        57,918,004     14,999,157
                                                     -----------    -----------

   The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

                              GLOBAL MATRECHS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                     --------------------------
                                                         2005           2004
                                                     -----------    -----------
                                                             (unaudited)

Cash flows from operating activities:
   Net loss                                          $(1,645,435)   $  (350,990)
   Adjustments to reconcile net income (loss)
     to cash used in operating activities:
     Depreciation                                          1,957
     Barter transaction                                   20,904
     Provision for bad debts                                --           22,537
     Amortization                                         49,311           --
     Amortization of beneficial conversion feature
       of convertible loans                            1,100,016           --
     Common stock issued in exchange for services
       performed                                          82,261           --
     Loan to Tulix                                        (1,225)
   Change in operating assets and liabilities:
     Accounts receivable                                 (49,577)       113,245
     Inventory                                           (74,332)          --
     Prepaid expenses                                     55,976         15,419
     Other assets                                         (5,000)          --
     Accounts payable and accrued expenses                65,384        161,238
                                                     -----------    -----------
       Net cash used in operating activities            (399,760)       (38,551)
                                                     -----------    -----------





Cash flow from financing activities:
   Net repayments to officer                             (57,659)          --
   Repayments of current maturities of long-term
     debt                                                (56,147)          --
   Proceeds from issuance of convertible loans           425,000        109,000
                                                     -----------    -----------
       Net cash provided by  financing activities        311,194        109,000
                                                     -----------    -----------
Net increase (decrease) in cash and cash equivalents     (88,566)        70,449
Cash and cash equivalents at beginning of period         131,471         71,818
                                                     -----------    -----------
Cash and cash equivalents at end of period           $    42,905    $   142,267
                                                     ===========    ===========


                                        5
<PAGE>

Non-cash investing and financing activities:

Conversion of preferred shares
  into 19,826,606 shares of common stock                            $   735,440
Issuance of 1,175,150 shares of common
  stock for services rendered                                       $    82,261
Service vehicle distributed for
  services performed                                                $    20,904




































   The accompanying notes are an integral part of these financial statements.

                                        6
<PAGE>

                              GLOBAL MATRECHS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. BASIS OF PRESENTATION

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to Article 10 of Regulation S-X of the
Securities and Exchange Commission. The accompanying unaudited financial
statements reflect, in the opinion of management, all adjustments necessary to
achieve a fair statement of the financial position and results of operations of
Global Matrechs, Inc. (the "Company," "we" or "us") for the interim periods
presented. All such adjustments are of a normal and recurring nature. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2004, as filed with the Commission on May 11, 2005.

2. GOING CONCERN MATTERS AND RECENT EVENTS

     The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplate the
realization of assets and liquidations of liabilities in the normal course of
business. The Company has incurred significant losses since its incorporation
resulting in an accumulated deficit as of March 31, 2005 of approximately $30.5
million. The Company continues to experience negative cash flows from
operations. These factors raise doubt about the Company's ability to continue as
a going concern.

     On December 31, 2004 we acquired True To Form, Limited. As a result of the
merger, True To Form is now our wholly owned subsidiary. True To Form designs,
develops, manufactures and sells specialty lighting products to targeted
segments of the traditional lighting industry and has recently established a
division that will focus on the homeland security market. True To Form markets
"high-end" lighting and architectural products for both commercial and
residential applications, including pendants, surface and ceiling luminaries,
table and floor lamps, commercial down-lights, bath fixtures, and custom
fixtures.

     On May 31, 2004, the Company completed the sale of its internet hosting and
website maintenance business to Tulix Systems, Inc. ("Tulix"), a company in
which Gia Bokuchava, Nino Doijashvili and Timothy R. Robinson, who were officers
and directors of the Company, are officers, directors and founding shareholders.
The Company recorded a loss on the sale of this business of $125,030 in the
fourth quarter of 2003 and recorded an additional loss of $124,385 in the second
quarter of 2004 for adjustments to the closing as provided for in the closing
documents.

     Mr. Robinson, Dr. Bokuchava, and Dr. Doijashvili have subsequently resigned
from the Company and have released the Company from all further employment
obligations.



                                        7
<PAGE>

NON-RELIANCE ON HISTORICAL FINANCIAL STATEMENTS

     On April 15, 2005, the Company's management, in consultation with the
Company's independent registered public accounting firm, concluded that the
Company's historical financial information related to fiscal 2001 through fiscal
2003 and for the first three fiscal quarters of 2004 accounted incorrectly for
certain convertible preferred stock instruments. As such, the management has
concluded that the Company's historical financial statements should no longer be
relied upon. While the Company does not intend to amend its previously filed
annual and quarterly reports covering the periods noted above, the Company has
restated historical financial information for the periods required to be
presented in its annual report on Form 10-KSB for the year ended December 31,
2004 to reflect the correct accounting treatment. The Company has also included
in its annual report on Form 10-KSB five years of restated financial information
highlighting the differences resulting from the application of the change in
accounting treatment to its historical financial statements and restated
selected quarterly information for 2003 and 2004.

ENTRANCE INTO EXCHANGE AGREEMENT WITH WOODWARD LLC

     On January 31, 2005, we entered into an Exchange Agreement with Woodward
LLC pursuant to which we acquired promissory notes, and have accordingly assumed
all rights pertaining thereto, issued by Eurotech Ltd. The notes are currently
in default and have an aggregate outstanding principal amount of $290,000. The
notes carry a default annual interest rate of 18% and are past due in their
entirety. In exchange for these notes, we issued to Woodward a promissory note
in the principal amount of $250,000.

     Under the terms of the Exchange Agreement, in the event we propose to
register securities under the Securities Act of 1933, as amended, we are
required to notify Woodward in advance of such registration and, at its request
(subject to limited exceptions), include the shares of our common stock
underlying the note on the registration statement filed in connection with such
registration, and assume any expenses associated therewith.

SECOND PURCHASE AGREEMENT WITH SOUTHRIDGE PARTNERS

     On January 31, 2005, we entered into a Second Securities Purchase Agreement
with Southridge Partners LP, one of our existing investors, whereby we agreed to
sell a convertible promissory note in the principal amount of $250,000 and
warrant to purchase up to 10,000,000 shares of our common stock to Southridge in
exchange for its $250,000 investment. Under the terms of this purchase
agreement, Southridge may, at its option, and at any time prior to July 1, 2005,
purchase an additional note in the principal amount of up to $1,500,000, and
otherwise on substantially the same terms as the note issued on January 31,
2005.

     The note is convertible, at the option of the holder, into shares of our
common stock at a conversion price of $0.02 per share. Southridge may require us
to repurchase some or all of its note if the market price of our common stock
falls below $0.03 per share for ten (10) consecutive trading days, at a
repurchase price equal to 140% of the principal amount of the note. In the event
we default under the terms of the note, the entire outstanding principal (and
any outstanding interest accrued thereon) shall become immediately due and
payable, and the interest rate will rise to 18% per annum.

     We have secured the payment of the notes with a subordinated security
interest in our accounts, general intangibles, inventories, and other
collateral. In addition, in the event we propose to register securities under
the Securities Act of 1933, as amended, we are required to notify Southridge in
advance of such registration and, at its request (subject to limited
exceptions), include the shares of our common stock underlying the note and
warrant on the registration statement filed in connection with such registration
(and assume any expenses associated therewith).

     The warrant has an expiration date of January 31, 2010. It contains a
cashless exercise provision whereby the holder may pay the exercise price
associated with any exercise by having us withhold a number of shares otherwise
issuable upon such exercise having a fair market value equal to the applicable
aggregate exercise price. In the event such provision is used with respect to an
exercise, we would receive no proceeds upon such exercise.

                                        8
<PAGE>

SOUTHRIDGE EXERCISES OPTION TO PURCHASE ADDITIONAL NOTES AND WARRANTS

     On March 2, 2005, Southridge Partners LP exercised its option to purchase
an additional note and warrant under its Second Securities Purchase Agreement.
In connection with such exercise, we issued to Southridge a convertible
promissory note in the principal amount of $175,000 and a warrant to purchase up
to 7,000,000 shares of our common stock in exchange for its $175,000 investment.
The note is convertible, at the option of the holder, into shares of our common
stock at a conversion price of $0.02 per share. Southridge may require us to
repurchase some or all of its note if the market price of our common stock falls
below $0.03 per share for ten (10) consecutive trading days, at a repurchase
price equal to 140% of the principal amount of the note. In the event we default
under the terms of the note, the entire outstanding principal (and any
outstanding interest accrued thereon) shall become immediately due and payable,
and the interest rate will rise to 18% per annum. The note matures on March 2,
2007.

     The warrant has an expiration date of March 2, 2010. It contains a cashless
exercise provision whereby the holder may pay the exercise price associated with
any exercise by having us withhold a number of shares otherwise issuable upon
such exercise having a fair market value equal to the applicable aggregate
exercise price. In the event such provision is used with respect to an exercise,
we would receive no proceeds upon such exercise.

     In determining the value of the beneficial conversion feature of the
Southridge notes, the Company first allocated $478,751 and $642,042,
respectively to the value of the warrants. Since this value exceeds the proceeds
received, the differential was recorded as additional paid in capital, discount
on notes payable and a prepaid expense. The prepaid expense is amortized over
the 24 month period of the convertible note. The value of beneficial conversion
feature was valued at $690,000 and $350,000, respectively. Since the conversion
is at the option of the holder, the value of the beneficial conversion feature
was amortized to interest expense in full during the quarter ended March 31,
2005.

SOUTHRIDGE EXERCISES OPTION TO PURCHASE ADDITIONAL NOTES AND WARRANTS

     On April 11, 2005, Southridge Partners LP exercised its option to purchase
an additional note and warrant pursuant to the Second Securities Purchase
Agreement. In connection with such exercise, we issued to Southridge a
convertible promissory note in the principal amount of $125,000 and a warrant to
purchase up to 5,000,000 shares of our common stock to Southridge in exchange
for its $125,000 investment. The note is convertible, at the option of the
holder, into shares of our common stock at a conversion price of $0.02 per
share. Southridge may require us to repurchase some, or all, of its note if the
market price of our common stock falls below $0.03 per share for ten (10)
consecutive trading days, at a repurchase price equal to 140% of the principal
amount of the note. In the event we default under the terms of the note, the
entire outstanding principal (and any outstanding interest accrued thereon)
shall become immediately due and payable, and the interest rate will rise to 18%
per annum. The note matures on April 11, 2007.


3. SEGMENT INFORMATION

     On May 31, 2004 the Company sold substantially all of the remaining assets
of the Company's Internet Services segment. With the execution of the licensing
agreement with Eurotech on May 22, 2003, and the closing of the sale to Tulix
Systems on May 31, 2004, our Licensed Technologies Division is now the Company's
only operating segment. The Internet Services segment has been presented as a
discontinued operation.

     The Company is currently operating in two major segments. These segments
are defined as the Licensed Technologies Division which consists of the
marketing of the technologies licensed from and the Specialty Lighting Division
which consists of the design, development, manufacture and sales of specialty
lighting and architectural products acquired in the merger with True To Form,
Limited.

                                       9
<PAGE>

                      FOR THE THREE MONTHS ENDED
                           MARCH 31, 2005
                     ---------------------------
                      LICENSED        SPECIALTY
                    TECHNOLOGIES      LIGHTING
                      DIVISION        DIVISION      ELIMINATIONS       TOTAL
                     -----------     -----------    -----------     -----------
Total Assets         $   846,387     $   315,066    $  (243,548)    $   917,905
Total Revenue               --       $   369,681           --       $   369,681
Net Income (Loss)    $(1,695,420)    $    49,985           --       $(1,645,435)

Proforma Financial Information

The following unaudited pro forma consolidated results of operations have been
prepared as if the acquisition of True to Form had occurred as of the beginning
of the following period:

                                                  Quarter Ended
                                                 March 31, 2004
                                                 --------------

Net revenues                                       $  203,369
Net loss from continuing operations                $ (404,529)
Net loss                                           $ (367,143)
Net loss per share                                 $   (0.025)

Pro forma data does not purport to be indicative of the results that would have
been obtained had these events actually occurred at the beginning of the period
presented and is not intended to be a projection of future results.

4. STOCK OPTIONS

     The Company has adopted the disclosure requirement of Statement of
Financial Accounting Standards No. 148 (SFAS 148), "Accounting for Stock-Based
Compensation-Transition and Disclosure" effective December 15, 2002. SFAS 148
amends Statement of Financial Accounting Standards No. 123 (SFAS 123),
"Accounting for Stock Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based compensation and also amends the disclosure requirements of SFAS
123 to require prominent disclosure in both annual and interim financial
statements about the methods of accounting for stock-based employee compensation
and the effect of the method used on report results. As permitted by SFAS 148
and SFAS 123, the Company continues to apply the accounting provisions of APB
25, and related interpretations, with regard to the measurement of compensation
cost for options granted under the Company's Stock Option Plan. No compensation
expense has been recorded as all options granted had an exercise price equal to
the market value of the underlying stock on the grant date. The pro-forma effect
on our results of operations, had expense been recognized using the fair value
method described in SFAS 123, using the Black-Scholes option pricing model, is
shown below.

                                                         FOR THE THREE MONTHS
                                                            ENDED MARCH 31,
                                                     --------------------------
                                                         2005           2004
                                                     -----------    -----------

Loss applicable to common shareholders:
     As reported                                      (1,641,802)      (350,990)
     Pro forma                                        (1,645,527)      (354,715)
Basic and diluted loss per share:
     As reported                                          (0.028)        (0.023)
     Pro forma                                            (0.028)        (0.023)

5. TAXES

     There was no provision for cash payment of income taxes for the three
months ended March 31, 2005, as the Company anticipates a net taxable loss for
the year ended December 31, 2005.

6. CONVERTIBLE PREFERRED STOCK

     As a requirement of the private placements of the Company's Series B, C, D
and E Convertible Preferred Stock, originally, the Company was obligated to file
and have declared effective, within a specified time period, a registration
statement with respect to a minimum number of shares of common stock issuable
upon conversion of the Series B, C, D and E Preferred Stock. As of March 31,
2005, such registration statement has not been declared effective. As of March
14, 2003, the holders of these series waived all penalties related to the
registration, along with mandatory conversion dates.

     Through August 14, 2004, the terms of the Company's Series B, C, D, and E
Convertible Preferred Stock provided for a guaranteed return on unconverted
shares of 5% for series B, 6% for series C and D, and 8% for series E.

7. SUBSEQUENT EVENTS

     From April 1, 2005 through May 18, 2005, the Company converted 12.5 shares
of Series C preferred stock and 540 shares of Series H preferred stock into
11,425,701 shares of common stock.

     On April 13, 2005 Carey Naddell, CEO of Eurotech, Ltd., filed suit against
the Company for damages based upon an alleged breach of a written service
agreement. The Company has responded and feels at this time there is no merit to
this action. We will diligently defend this action.

                                       10
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

THE STATEMENTS INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-QSB MADE BY OUR
MANAGEMENT, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE FORWARD-LOOKING
STATEMENTS. EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING
OUR FUTURE FINANCIAL RESULTS, OPERATING RESULTS, BUSINESS STRATEGIES, PROJECTED
COSTS, PRODUCTS, COMPETITIVE POSITIONS AND PLANS, CUSTOMER PREFERENCES, CONSUMER
TRENDS, ANTICIPATED PRODUCT DEVELOPMENT, AND OBJECTIVES OF MANAGEMENT FOR FUTURE
OPERATIONS. IN SOME CASES, FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY
TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "WOULD," "EXPECTS," "PLANS,"
"ANTICIPATES," "BELIEVES," "ESTIMATES," "PREDICTS," "POTENTIAL," "CONTINUE," OR
THE NEGATIVE OF THESE TERMS OR OTHER COMPARABLE TERMINOLOGY. ANY EXPECTATIONS
BASED ON THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES
AND OTHER IMPORTANT FACTORS, INCLUDING THOSE DISCUSSED IN OUR ANNUAL REPORT ON
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004 IN "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" UNDER THE HEADING
"FACTORS AFFECTING FUTURE PERFORMANCE." THESE AND MANY OTHER FACTORS COULD
AFFECT OUR FUTURE FINANCIAL AND OPERATING RESULTS, AND COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM EXPECTATIONS BASED ON FORWARD-LOOKING
STATEMENTS MADE IN THIS DOCUMENT OR ELSEWHERE BY US OR ON OUR BEHALF. THE
FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH OUR
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES APPEARING
ELSEWHERE IN THIS REPORT.

In addition to the risks and uncertainties faced generally by participants in
our industry, we face the following risks and uncertainties:

     o    Our business, as currently constituted, has limited operating history.
          Therefore, we may not be able to accurately forecast future results,
          and operating losses in future periods could be greater than expected.

     o    We have a history of operating losses, and there is no assurance that
          we will achieve profitability in the future.

     o    We have a going-concern qualification in the report by our registered
          independent public accounting firm for our financial statements for
          the year ended December 31, 2004, which may make capital raising more
          difficult and may require us to scale back or cease operations,
          putting our investors' funds at risk.

     o    We may be unable to obtain additional capital required to fund our
          operations and finance our growth.

     o    The management of our finances and the quality and timeliness of our
          financial reporting may be adversely affected if we are unable to
          increase the size and capabilities of our internal administrative and
          finance function as our business grows.

     o    If we fail to realize some or all of the anticipated benefits from our
          acquisition of True to Form, our business will suffer.

     o    We face intense competition, which could result in lower revenues and
          higher research and development expenditures and could adversely
          affect our results of operations.

     o    If we cannot effectively manage our growth, our business may suffer.

     o    We may be unable to hire and retain the skilled personnel we need to
          expand our operations.

     o    Our success depends on the services of our executive officers and key
          employees.

     o    Our business may suffer if we cannot protect our proprietary
          technology.

     o    Claims by others that we infringe their intellectual property rights
          could harm our business and financial condition.

                                       11
<PAGE>

     o    New corporate governance requirements are likely to increase our costs
          and make it more difficult to attract qualified directors.

     o    We are not subject to the same corporate governance standards as
          listed companies, including without limitation, the requirement that
          we have a majority of independent directors.

     Because of the foregoing and other factors, we may experience material
fluctuations in our future operating results on a quarterly or annual basis
which could materially adversely affect our business, financial condition and
operating results.

CRITICAL ACCOUNTING POLICIES

     Our consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States. These accounting
principles require us to make certain estimates, judgments and assumptions. We
believe that the estimates, judgments and assumptions upon which we rely are
reasonable based upon information available to us at the time that these
estimates, judgments and assumptions are made. These estimates, judgments and
assumptions can affect the reported amounts of assets and liabilities as of the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the periods presented. Those estimates and judgments are
based on management's historical experience, the terms of existing agreements,
our observance of trends in the industry, information that we obtain from our
customers and outside sources, and on various other assumptions that management
believes to be reasonable and appropriate under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. To the extent
there are material differences between these estimates, judgments or assumptions
and actual results, our financial statements will be affected.

     The significant accounting policy that we believe is most critical in fully
understanding and evaluating our reported financial results is our policy
regarding revenue recognition which is discussed in detail in our Annual Report
on Form 10-KSB filed with the Securities and Exchange Commission. We have
reviewed and determined that our revenue recognition policy remains our critical
accounting policy for the three-month period ended March 31, 2005. We did not
make any changes to this policy during this period.

BUSINESS OVERVIEW

     The Company is currently operating in two major segments. These segments
are defined as the Licensed Technologies Sector which consists of the marketing
and sales of the technologies licensed from Eurotech and the Specialty Lighting
subsidiary which consists of the design, development, manufacture and sales of
specialty lighting and architectural products acquired in the merger with True
To Form Ltd acquired December 31, 2004. The Company is targeting the pursuit of
the Homeland Securities market with both segments.

     On May 22, 2003, we completed a transaction with Eurotech pursuant to which
we now license EKOR(TM), now called NuCap(TM), HNIPU, EMR/AC, Rad-X, Firesil,
LEM and RBHM technologies from Eurotech. Currently, we are licensing the
EKOR(TM), HNIPU, EMR/AC, Rad-X, Firesil, LEM and RBHM technologies from
Eurotech, Ltd. We intend to use these licenses to derive revenue by partnering
with other technology firms to sell raw materials to producers or to sublicense
the technologies and collect royalties and/or licensing fees.

     On December 31, 2004 we acquired True To Form Ltd, Inc.. As a result of the
merger, True To Form is now our wholly owned subsidiary. True To Form designs,
develops, manufactures and sells specialty lighting products to targeted
segments of the traditional lighting industry and has recently established a
division that will focus on the homeland security market. True To Form markets
"high-end" lighting and architectural products for both commercial and
residential applications, including pendants, surface and ceiling luminaries,
table and floor lamps, commercial down-lights, bath fixtures, and custom
fixtures.

     The Company's Internet related business was sold on May 31, 2004 to Tulix
Systems, Inc. As a part of the sales agreement the Company acquired 15% equity
ownership of Tulix. The Company is a minority stock holder in Tulix and
exercises no management input or control of its operations.

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<PAGE>

     We expanded our offerings when, on December 31, 2004, we acquired our
subsidiary True To Form Ltd, Inc. ("True To Form"), a company in the business of
True To Form designing, developing, and manufacturing specialty lighting
products. We acquired True To Form from its sole shareholder, Mark J. Allen, who
is also a member of our board of directors. Mr. Allen will continue as the
President of True To Form and was appointed Executive Vice President of the
Company. The transaction was the result of arm's length negotiations and was
unanimously approved by the disinterested directors of the Company. The
consideration was determined on the basis of these negotiations and the advice
of our financial advisor, who is not affiliated with us or Mr. Allen.

     The consideration paid to Mr. Allen in the transaction consisted of:

     o    the issuance by True To Form of a secured note in the initial
          principal amount of $500,000; and

     o    the issuance to Mr. Allen by Global Matrechs of 10,000,000 shares of
          our common stock.

     The number of shares of common stock issued in the transaction is subject
to adjustment based on the price of our common stock and the revenues of the
acquired business on December 31, 2006. In general, assuming that True To Form
generates gross revenues of at least $3,000,000 for the twelve months ended
December 31, 2006, the value of the shares issued in the transaction (based on
the average closing price of the shares for the five trading days ended on or
prior to December 31, 2006) will be at least $2.5 million but no more than $3.5
million. If the value is less than $2.5 million, we are obligated to issue
additional shares or, at our option, make cash payments to make up the
difference. If the value of the shares is greater than $3.5 million, any excess
shares will be returned to us and retired or held as treasury stock. If True To
Form does not meet the revenue target, the share consideration will be a minimum
of $2.0 million and a maximum of $3.0 million.

     Global Matrechs has provided True To Form with an initial working capital
loan of approximately $200,000 and will enter into an employment agreement with
Mr. Allen. In connection with the transaction, we have also issued a warrant to
our financial advisor in the amount of 2,000,000 shares of common stock at an
exercise price of $0.03 per share. The merger agreement provides that until the
secured note is paid in full, Mr. Allen has the right to designate a majority of
the directors of True To Form. The merger agreement also provides Mr. Allen with
limited registration rights related to the share consideration.

PRODUCTS AND SERVICES

Licensed Technologies

     NUCAP(TM)

     NuCap(TM), formerly called EKOR(TM), was developed jointly by scientists at
the I.V. Kurchatov Institute, or Kurchatov, and members of the Euro-Asian
Physical Society, or EAPS, both based in Moscow, Russia. EKOR(TM) was the brand
name for a family of materials designed for long-term isolation of hazardous and
radioactive materials. As a silicon-based elastomer, NuCap(TM)'s adhesive
properties allow it to stick to a wide variety of wet or dry surfaces and
materials. When applied, NuCap(TM) materials surround and immobilize radioactive
or hazardous debris ranging from fine dust to large pieces of equipment and, in
combination with their fire-resistant and water-proof properties, prevent such
debris from migrating by water or as air-borne particles. NuCap(TM) materials
also possess other highly desirable performance characteristics such as chemical
resistance, fire resistance, heat resistance, and resistance to environmental
aging and degradation from radiation. In addition to its unique combination of
performance characteristics, NuCap(TM) comes in multiple product forms and can
be applied using specified methods for waste-coating and encapsulation. We
believe that this allows NuCap(TM) to be used as a solution for a broad spectrum
of nuclear and hazardous waste management problems.

     The NuCap(TM) product family's performance characteristics and flexibility
of form make it a tool for a broad spectrum of applications. There are currently
five basic forms of NuCap(TM)

     1.   Sealer Plus, which can be sprayed to coat containers or cover
          contaminated surfaces;

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<PAGE>

     2.   Foam, which is pumped in a range of densities to fill crevices, ducts
          or pipes;

     3.   Grout, applied in a pour and mix method, which can be used to make
          shapes for shielding or to macroencapsulate items to form an
          unleachable monolith for transportation or disposal;

     4.   Matrix, applied in a pour and mix method, which can be used to
          microencapsulate radioactive or hazardous wastes to form an
          elastomeric monolith for transportation or disposal; and

     5.   StoneStore, applied in a pour and mix method, which can be used to
          microencapsulate highly radioactive waste and will form a ceramic
          monolith for permanent disposal. StoneStore is still in the research
          and development stage.

     In tests conducted at Kurchatov, NuCap(TM) has been shown to be highly
resistant to radiation and structural degradation from exposure to radiation. It
has also proven to be fire resistant, waterproof, and capable of being
formulated in densities that display considerable structural strength and
weight-bearing properties of 100 pounds per square inch.

     MARKETING OF NUCAP(TM)

     Eurotech described its efforts to market NuCap(TM) as it was called prior
to our changing the name as well as the other technologies in its public
filings. These descriptions are summarized in this report. NuCap(TM)'s
acceptance into nuclear waste management has been slower than Eurotech
anticipated. Eurotech has stated that it believes that significant technical
issues remain, including those dealing with the residue from production of
nuclear weapons and the disposal of nuclear fuel being discharged from nuclear
power plants. With respect to residue from the production of nuclear weapons,
the technical issues relate to the fact that the residue could take a number of
forms (liquid, wet slurry, partially dried sludge, calcined salts, etc.) and
have a variety of ph factors. The amount of waste that NuCap(TM) can effectively
encapsulate differs depending on the form and ph factor of the waste. Thus, each
project must be addressed separately, and sometimes we will need to develop the
appropriate form of NuCap(TM) on a project-by-project basis. We do not believe,
that this issue will be a significant obstacle for us, as we believe that the
modification of NuCap(TM) is no longer as resource-intensive as previously
expected and can be accomplished relatively efficiently, especially with our new
manufacturing partners. For example, a sheet form of NuCap(TM) was recently
developed by Global Matrechs for use in a project with INEEL. With respect to
the technical issues that Eurotech had perceived with respect to the disposal of
nuclear fuel being discharged from nuclear power plants, we do not intend to
market NuCap(TM) for this purpose. We believe that NuCap(TM) is a
technologically advanced material that has properties that make it a superior
cost effective and safer isolation technology even for some non-radioactive
hazardous materials and a unique sealant for potential applications in the
construction industry.

     In 2001, Eurotech successfully replicated the formula for NuCap(TM) to make
Nucap(TM) products in the United States. In March 2001, the NuCap(TM) family of
products was presented to waste management professionals at the annual Waste
Management Symposium in Tucson, Arizona. As a result of the interest generated
at the symposium, Eurotech presented EKOR(TM) for use in a variety of
applications at Department of Energy ("DOE") sites to various waste management
professionals. Specifically, Eurotech had discussions with the Savannah River
Site (or SRS, near Aiken, South Carolina), Oak Ridge National Laboratory (or
ORNL, in Oak Ridge, Tennessee), Fernald Closure Site (in Fernald, Ohio),
Battelle Memorial Institute (or BMI, in Columbus, Ohio), Rocky Flats
Environmental Testing Site (or RFETS, near Denver, Colorado), Los Alamos
National Laboratory (or LANL, Los Alamos, New Mexico), Lawrence Livermore
National Laboratory (or LLNL, Livermore, California), Hanford Reservation
(Richland, Washington) and Idaho National Engineering & Environmental Laboratory
(or INEEL, Idaho Falls, Idaho). Eurotech also had a number of meetings with DOE
staff at their headquarters in Washington, D.C. and Germantown, Maryland. This
included the introduction to companies doing project and management work at DOE
and commercial sites, and had arranged demonstrations at the above mentioned
facilities and at its production facility in California for staff from RFETS and
ORNL. Early demonstrations of the Sealer product, as a solution that required
mixing of a paste and catalyst and significant monitoring of specialized
application equipment, revealed that the Sealer product needed further
development to be more user-friendly. The Sealer product is a paste, with the
consistency of thick brick mortar. While this thickness enables Sealer to be
applied to vertical walls, tanks, drums, and ceilings, a sprayable version of
Sealer, or even a thinner paste version that could be more easily applied, would
be more user-friendly. To address this issue, Sealer Plus was developed, which
Eurotech introduced in

                                       14
<PAGE>

November 2001 and initially demonstrated at BMI in January 2002. Sealer Plus is
a low viscosity version of NuCap(TM). Sealer that can be sprayed with
high-pressure paint spray equipment. We seek to further develop Sealer to make
the Sealer more easily applied in a foam consistency, which we believe will make
Sealer more user-friendly. The demonstration of NuCap(TM) Grout at INEEL enabled
Eurotech to demonstrate its ability to operate in an underwater environment.
INEEL has certain components that are being stored underwater because of their
behavior when exposed to air. Global Matrechs has prepared specially-requested
samples for further testing at INEEL and Hanford Where Global Matrechs had a
successful demonstration in April of this year.

     During 2002, NuCap(TM) was selected as an approved waste stabilization
material at multiple DOE sites. This selection meant that NuCap(TM) had passed
the applications testing necessary to be judged usable on specific forms of
waste at specific sites. For example, Battelle Memorial Institute, Columbus,
Ohio, under a site decommissioning contract from the DOE, applied NuCap(TM)
within a series of reactor drain pipes to immobilize residual radioactive
contamination, to protect workers, the public and the environment during
facility sectioning and disposal. NuCap(TM) is being considered by the Pacific
Northwest National Laboratory, a DOE national laboratory, to stabilize Alpha
Dust in the H-Basin Fuel Pool, which could provide protection to workers during
facility decommissioning. NuCap(TM) has been tested at the DOE Argonne National
Laboratory to immobilize surrogate radioactive calcined waste and salts. Initial
evaluations of NuCap(TM) is promising for applications in the area of High Level
Waste Immobilization.

     During 2003 and 2004, the Company manufactured a number of samples for
potential customers in the European community. The Company is in the process of
completing agreements with a commercial partner to manufacture, market and
deliver NuCap(TM) to these potential customers.

     We intend to market NuCap(TM) for use in nuclear waste encapsulation and
nuclear debris fixation for nuclear cleanup projects, nuclear facility
decontamination and decommissionings, and nuclear waste transportation and
disposal. As part of this strategy, we intend to seek affiliations and joint
ventures with large prime contractors in the nuclear industry on a project by
project basis. While we see opportunities for NuCap(TM) and our other
technologies, however, we can offer no assurance that our efforts will be more
successful, or as successful as Eurotech's efforts.

     HNIPU

     HNIPU is a hybrid polyurethane that does not involve the toxic isocyanates
utilized in the production of conventional polyurethane and that has lower
permeability and greater chemical resistance qualities as compared to
conventional polyurethane. We believe that these advanced characteristics, in
addition to the potential reduced risk from the elimination of isocyanates in
its production, make HNIPU superior to conventional polyurethanes in connection
with their use in a number of industrial application contexts such as
manufacturing automotive components, paints, foams, plastics and truck bed
liners; aerospace sealants, industrial adhesives, coatings, flooring, glues;
industrial equipment and machinery; and consumer goods such as appliances,
footwear, furniture and plastic products. Because of HNIPU's lower permeability
and improved chemical resistance, we think that industrial paints and coatings
are a potential target market for HNIPU.

     MARKETING OF HNIPU

     On November 17, 2003, Global Matrechs entered into an agreement with
Environmental Friendly Materials, GMBH ("EFM"), a German company, for the
manufacture and sale of HNIPU for the European marketplace. EFM has been given
non-exclusive license to manufacture and distribute HNIPU and intends to
manufacture it at various locations across Europe. We have applied for approval
to sell HNIPU in the United States from the EPA and if and when we are on their
approved list of products we expect to complete another non-exclusive agreement
for the North American territory.

     Because HNIPU represents a new class of polymer compounds closely related
to polyurethanes, we expect that a variety of products will emerge from the
development of variations and improvements to the existing HNIPU binders that
have worldwide industrial applications. For this reason, we intend to seek to
license HNIPU to large industrial polymer and chemical manufacturers who can
sell the various HNIPU binders to international industrial manufacturers. The
focus will be to transfer the existing binder product technologies under
licensing agreements

                                       15
<PAGE>

from the laboratory to the manufacturer. We intend to follow up on existing
agreements, current evaluations, and active discussion for HNIPU binder
production.

     EMR/AC

     Eurotech licensed certain rights to Acoustic Core and Electromagnetic
Radiography for specific markets, consisting of (i) illicit material detection,
(ii) above surface or subsurface nuclear or other hazardous material
remediation, (iii) marine dredging sites (inland and ocean) and (iv) oil
exploration, from Trylon Metrics, Inc. pursuant to an agreement dated July 2001,
as amended in October 2001. Eurotech licenses the illicit materials detection
application to another company and licenses the remaining three applications to
Global Matrechs.

     Both technologies use a non-contact inspection methodology that creates
signals that are then interpreted by a digital analyzer that allows
identification of elemental or compound materials from their empirically
determined properties. Acoustic Core is used in applications that are
predominately wet (i.e., riverbeds, wetlands, etc.) and EMR is used in dry
environments. Completed research and development studies have verified that
Acoustic Core and EMR can identify materials by their acoustic or
electromagnetic signatures, but the feature of these technologies that we
believe is unique is their ability to map in three dimensions the existence of
target materials at extremely low concentrations at depths of up to 300 feet.
The capabilities of these technologies complement the NuCap(TM) product line by,
for example, allowing tanks of waste to be monitored for leaks and the leaks,
when discovered, targeted for repair. Acoustic Core and EMR may have
applications in markets that involve subsurface evaluation, from contamination
discovery and monitoring to resource discovery.

     Both Acoustic Core and EMR have been tested at DOE sites (Oak Ridge and
INEEL) on a variety of materials. Sandia National Laboratory conducted an
in-depth evaluation of the science behind these technologies in 1999 and
concluded that they provide a unique capability to identify and map in three
dimensions low levels of material concentration at substantial depths. We
believe that these products are more cost effective than other current methods.
During the fourth quarter of 2001, Eurotech submitted several proposals to the
DOE for evaluation of areas of potential contamination and to commercial
entities being pressured by the EPA for potential subsurface contamination, but
these technologies have not been selected for inclusion in currently funded
programs to date.

     MARKETING OF EMR/AC

     In conjunction with the marketing of NuCap(TM), we intend to market
EMR/AC(TM) to a variety of facilities requiring detection of nuclear waste
contaminants and other environmentally hazardous substances in subsurface soil
and ground water resulting from leaking storage tanks or toxic chemical spills.
We are currently seeking a manufacturing partner for EMR/AC(TM), and we are
waiting until we find such a partner to pursue our marketing strategy for
EMR/AC(TM).

     RAD-X

     Rad-X is a technology intended for use as an interior fire-resistant
fixative for equipment or facilities with contaminated surfaces. Rad-X differs
from NuCap(TM) Sealer Plus in that it is not weather-resistant and does not have
the chemical, radiation and aging resistance needed for long-term protection.
Rad-X provides a low-cost fixative for surfaces that are scheduled for
disassembly or dismantlement and need strong adhesion (glue-down of contaminated
particles that could become airborne) and fire-resistance properties. Rad-X was
first marketed in 2001.

     MARKETING OF RAD-X

     According to Eurotech's public filings, Eurotech had invested less than
$20,000 in the creation of the Rad-X product line. Rad-X was initially created
for feasibility testing at DOE's Rocky Flats Environmental Testing Site, or
RFETS, and was delivered in late September 2001. Testing of Rad-X at other
laboratories occurred in November 2001. This testing confirmed its fire and
smoke resistance properties. We believe that Rad-X can satisfy proposed DOE
fire/smoke criteria for certain specialized applications. Eurotech has marketed
Rad-X in connection with NuCap(TM) at DOE sites that performed decommissioning
or hazardous material management in 2002, and if the opportunity arises, we will
continue this strategy. We are currently seeking a manufacturing partner for
Rad-X, and we are waiting until we find such a partner to pursue our marketing
strategy for Rad-X.

                                       16
<PAGE>

     RAPIDLY BIODEGRADABLE HYDROPHOBIC MATERIAL ("RBHM")

     RBHM is a new, hydrophobic (water resistant), strong, cheap, and completely
biodegradable cellulose-based composite material. RBHM is intended to improve
the properties of both paper and plastic packaging materials. The material can
be used as a commodity in trade, industry, and agriculture for a wide range of
applications. To date, most attempts to produce biodegradable products for
consumers have focused on developing plastics that could biodegrade. RBHM takes
a different approach - making cellulose-based material with the same physical
properties as plastic, except the material biodegrades completely in the same
time as regular paper bags. RBHM consists of cellulose (paper) and biodegradable
organic additives. Biodegradation of RBHM occurs in wet soil through normal
enzymatic action of various microorganisms - fungi and bacteria. We believe that
the main advantages of RBHM are:

     o    Strength. RBHM's strength characteristics, especially combined with
          low elongation and acquired water resistance of the material, make
          RBHM unique and desirable for packaging applications.

     o    Water Resistance. RBHM keeps water resistance for one week. Most of
          the existing biodegradable packaging products are not hydrophobic at
          all and will fail if wetted during use.

     o    Biodegradable Nature. Enzymes begin breaking down RBHM in the presence
          of moisture in natural environments such as soil. Then microorganisms
          decompose the material with rapidly occurring metabolic reactions.
          RBHM is completely converted into carbon dioxide, water, and biomass
          in two to three months in wet soil.

     o    Reproducible Natural Raw Materials. RBHM uses cellulose, a widely
          available and renewable raw material.

     o    Relatively Low Cost. The main obstacle to widespread use of
          biodegradable polymers has been cost. Biodegradable polymers are
          traditionally significantly more expensive than commodity polymers.
          The high costs involved in the production of biodegradable polymers
          means that they cannot compete favorably with conventional polymers.
          This high cost has deterred the widespread adoption of biodegradable
          plastics in major consumer applications. At an additional cost of less
          than 10%, and sometimes less depending on the type of material
          treated, materials treated with RBHM provide plastic-like performance
          and are biodegradable.

     We believe that there is a large number of potential applications for a
technology like RBHM. Because RBHM can be applied on sheets, films and fibers,
it is suitable for a range of single-use products, including, among others,
grocery and waste bags, the top, and back sheets of disposable diapers, and
disposable eating utensils.

     MARKETING OF RBHM

     Eurotech had marketed RBHM through its web site during 2001 and 2002. We
are currently seeking a manufacturing partner for RBHM, and we are waiting until
we find such a partner to pursue our marketing strategy for RBHM, which will be
through our website.

     LIQUID EBONITE MATERIAL ("LEM")

     LEM is a synthetic liquid rubber with enhanced mechanical, permeability and
anti-corrosive qualities as compared to conventional sheet rubber coverings. In
laboratory testing, coverings made with LEM, as compared to conventional sheet
rubber coverings, have displayed greater resistance to harsh chemicals such as
acids, alkalis and benzene, and have been successfully applied to intricate and
complex surfaces such as sieve meshing. Based on the physical and chemical
properties of LEM, and on the basis of such tests, we believe that LEM coverings
are capable of providing superior protection to small-diameter piping and to the
intricate parts of pumps, fans, and centrifuge rotors. LEM can be applied to
form surface coverings using standard coating techniques, including spraying and
dipping.

                                       17
<PAGE>

     MARKETING OF LEM

     Eurotech had marketed LEM through its web site during 2001 and 2002. We are
currently seeking a manufacturing partner for LEM, and we are waiting until we
find such a partner to pursue our marketing strategy for LEM, which will be
through our website.

     FIRESIL(TM) - FIRE PROTECTION ORGANOMINERAL COATING - FIRE-STOP FOR
RESIDENTIAL AND COMMERCIAL APPLICATION

     Firesil(TM) is an environmentally compatible fire-stop material with good
adhesion properties to hydrophilic and hydrophobic surfaces and exhibits strong
fire resistance, thermostability, and water resistance characteristics.

     MARKETING OF FIRESIL(TM)

     We intend to market Firesil(TM) directly to corporations that are
prospective candidates for sub-licensing the technology. Eurotech had
Firesil(TM) tested by an accredited lab to ASTM protocol and it passed these
tests. We are currently seeking a manufacturing partner for Firesil(TM), and
will wait until we find such a partner to pursue a marketing strategy for
Firesil(TM).

     COMPETITION

     The licensed technologies are targeted at highly competitive markets. Due
to the nature and size of some of the markets and some of the projects for which
the licensed technologies may be applicable, there are sometimes other
competitors who may have significantly greater name recognition and greater
financial and other resources than we do. Many of these competitors also have
technologies that are very competitive with the licensed technologies. For
example, NuCap(TM) is a composite material based on a silicone polymer that is
different from other silicones produced by manufacturers such as GE Silicones
and Dow Corning, but the products produced by those manufacturers compete with
NuCap(TM). As another example, some of the major producers of polyurethanes used
in coatings and finishes, sealants and adhesives, which products may compete
with the HNIPU technology, include Akzo Nobel, Dow Chemical and Kansai.

     INTELLECTUAL PROPERTY RIGHTS

     GENERAL

     Many entities, including some developing technologies similar to ours, now
have and may in the future obtain patents and other intellectual property rights
that cover or affect products or services directly or indirectly related to the
technologies that we license from Eurotech. In general, if a court determines
that one or more of the licensed technologies infringes on intellectual property
held by others, we would be required to cease infringing on intellectual
property held by others, we would be required to cease developing or marketing
those products or to obtain licenses to develop and market those products from
the holders of the intellectual property, or to redesign those products in such
a way as to avoid infringing the patent claims. If a competitor holds
intellectual property rights, the entity might be predisposed to exercise its
right to prohibit our use of its intellectual property in our products and
services, thus impacting our competitive position.

     We cannot assure you that we are aware of all patents and other
intellectual property rights that the licensed technologies may potentially
infringe. In addition, patent applications in the United States are confidential
until the Patent and Trademark Office issues a patent and, accordingly, we
cannot evaluate the extent to which the licensed technologies may infringe
claims contained in pending patent applications. Further, it is often not
possible to determine definitively whether a claim of infringement is valid,
absent protracted litigation, which we may not have the resources to pursue.

     We cannot estimate the extent to which we may be required in the future to
obtain licenses with respect to patents held by others and the availability and
cost of any such licenses. Those costs, and their impact on our financial
position, could be material. Damages in patent infringement cases can also
include a tripling of actual damages in certain cases. To the extent that we are
required to pay royalties to third parties to whom we are not

                                       18
<PAGE>

currently making payments, these increased costs of doing business could
negatively affect our liquidity and operating results.

     In addition, there may be entities developing and marketing technologies
which infringe on patents and intellectual property rights held by us. Patent
infringement claims are protracted and costly. We may not have the resources to
adequately protect our intellectual property. Any expenditures to pursue
intellectual property rights by us could negatively affect us.

     NUCAP(TM) INTELLECTUAL PROPERTY RIGHTS

     The Euro-Asian Physical Society (EAPS) has patented EKOR(TM) in the U.S.,
Russia, and other industrialized countries. On March 23, 1999, the U.S. Patent
and Trademark Office issued to EAPS Patent No. 5,886,060 on the process for
manufacturing one of the EKOR(TM) compound variants. Pursuant to sub-license
agreement, Eurotech became the exclusive global licensee of all right, title and
interest (inclusive of all patent and other intellectual property rights now or
in the future) in EKOR(TM). We are the sole licensee of Eurotech for NuCap(TM)
and have renamed the product NuCap(TM). We do not know if additional proprietary
technology that we have developed relating to NuCap(TM) will prove patentable.
We have applied for trademark protection for the mark "NuCap" with the U.S.
Patent and Trademark Office.

     HNIPU INTELLECTUAL PROPERTY RIGHTS

     U.S. Patent Number 6120905 for HNIPU network polymers and composites formed
there from was issued on September 19, 2000. Patents for this technology have
also been issued in Europe (EP 1088021, PCT WO 9965969) and Australia (4441099).
These patents have been assigned to Eurotech. The method of synthesis of
cyclocarbonates and nonisocyanate or hybrid nonisocyanate network polyurethanes
is patent applied for in the United States, which application has been assigned
to Eurotech. We are a licensee of Eurotech. As a regular part of our business
activities, we intend to submit patent applications to protect our developed
intellectual property, improvements and extensions, although we do not know
whether any technologies that we develop will be patentable.

     EMR/AC INTELLECTUAL PROPERTY RIGHTS

     U.S. Patent Number 4,922,467 for Acoustic Detection Apparatus (Acoustic
Core) was issued to David Caulfield on May 1, 1990 and subsequently assigned to
Ocean Data Equipment Corporation. This patent was significantly improved, for
which U.S. Patent Number 6,545,945 was issued on April 8, 2003. Electromagnetic
Radiography technology has been protected under trade secret laws. The worldwide
exclusive licensing rights to these technologies for the detection of nuclear
and hazardous materials at nuclear remediation and marine dredging sites, and
for oil exploration, were obtained by Eurotech and, except to the extent related
to the illicit materials detection application of these technologies, were
subsequently licensed to Global Matrechs.

     RAD-X INTELLECTUAL PROPERTY RIGHTS

     Eurotech had protected its interest in Rad-X by treating the formulation as
proprietary property and entering into confidentiality agreements with its
partners.

     RBHM INTELLECTUAL PROPERTY RIGHTS

     Rademate, an entity in which Eurotech is an investor, was issued U.S.
Patent #6294265 for "Hydrophobic biodegradable cellulose-containing material"
for RBHM on September 25, 2001. Rademate has one application with the Israeli
Patent Office (126306), dated September 23, 1998, which is pending. Eurotech has
licensed to us the intellectual property rights that it has in RBHM.

     LEM INTELLECTUAL PROPERTY RIGHTS

     Eurotech has acquired the intellectual property rights associated with U.S.
Patent #6303683 (issued October 16, 2001) for Liquid Ebonite mixtures and
coatings, and concretes formed therefrom and an application filed under

                                       19
<PAGE>

the Patent Cooperation Treaty (PCT/US99/16883) on July 26,1999 by Dr. Igor
Figovsky, the inventor of these technologies. We are a licensee of Eurotech.

     FIRESIL(TM) INTELLECTUAL PROPERTY RIGHTS

     Eurotech acquired the formula for Firesil(TM) from Dr. Figovsky, its
inventor, in 2000. Eurotech terminated previously initiated patent applications
and has elected to protect this formula as a trade secret. Eurotech owns the
federally registered trademark "Firesil". We are a licensee of Eurotech.

     GOVERNMENT REGULATION

     The use of NuCap(TM) is subject to U.S. environmental safety laws and
regulations pertaining to the safe use and containment of hazardous and nuclear
waste. Based on the results of tests conducted by Eurotech, we believe that the
NuCap(TM) compounds meet current applicable regulations for safe use,
containment and storage of hazardous and nuclear materials. It is, however,
possible that more stringent or different standards may be adopted or applied in
the future that might influence the intended use for NuCap(TM) and it is also
possible that the standards, if adopted or applied, may materially increase the
cost to us of using NuCap(TM) compounds or prevent their use altogether. We are
not aware of any other U.S. or foreign laws or regulations that significantly
hinder the marketing, sale, or use of NuCap(TM) based materials.

     The manufacture of HNIPU and operation of EMR/AC(TM) equipment is not
expected to be impacted adversely by government regulations. HNIPU's MSDS
identifies the limited risks associated with the manufacture, handling and
application of the non-isocyanate polyurethane. OSHA outlines operational
regulations as related to acoustic frequencies and power levels as might be
applied to EMR/AC(TM) operations. We have currently applied to the EPA for
approval of HNIPU to be sold in the United States.

     The manufacture and use of HNIPU is subject to U.S. environmental safety
laws and regulations pertaining to the safe use of chemicals and polymeric
materials. While HNIPU does not use highly toxic compounds like isocyanates, it
is still subject to governmental regulations, but based on preliminary
assessments by Eurotech we believe that HNIPU compounds will meet current and
future regulations. If we are successful in licensing various HNIPU binders to
chemical and polymer manufacturers, we expect that the licensees will bear the
costs of applying for governmental approvals required for manufacturing and
industrial usage. We are not aware of any other U.S. or foreign laws or
regulations that significantly hinder the marketing, sale, or use of HNIPU based
materials.

Specialty Lighting

     True To Form designs, develops, manufactures and sells specialty lighting
products to targeted segments of the traditional lighting industry and has
recently established a division that will focus on the homeland security market.
True To Form designs, manufactures and markets high-end lighting and
architectural products for commercial, hospitality and residential applications,
including pendants, surface and ceiling luminaries, table and floor lamps,
commercial down-lights, bath fixtures, and custom fixtures.

     SALES AND MARKETING

     True To Form markets primarily to architects, interior designers, lighting
consultants and high-end designer showrooms.

     CUSTOMERS

     The Company's specialty fixtures subsidiary has recently worked on projects
for Wynn Design and Development, The Mandalay Bay Group and the Luxor Hotel.

                                       20
<PAGE>

RESULTS OF OPERATIONS

     THREE MONTHS ENDED MARCH 31, 2005 AND 2004

     NET SALES. Net sales from $620 in the quarter ended March 31, 2004 compared
to $369,681 in the quarter ended March 31, 2005. Revenues in the quarter ended
March 31, 2004 consisted of sales of NuCap(TM) and are recognized at the time
that products are shipped or services are provided. Revenues in the quarter
ended March 31, 2005 consisted of sales from our True To Form Ltd. division,
acquired on December 31, 2004.

     COST OF SALES. Cost of sales includes the cost of materials, handling,
shipping, and any associated customs clearance costs. Cost of sales increased by
$147,645 from the quarter ended March 31, 2004 as a result of cost of sales from
our True to Form Ltd. division.

     GROSS PROFIT. Gross profit increased from $62 in the quarter ended
March 31, 2004 to $221,478 in the quarter ended March 31, 2005. This reflects
the results from our acquisition of True To Form.

     GENERAL AND ADMINISTRATIVE. General and administrative expense includes
salaries for administrative personnel, insurance and other administrative
expenses, as well as expenses associated with maintaining our records and SEC
reporting. General and administrative expenses increased from $ 262,566 in the
quarter ended March 31, 2004 to $612,611 in the quarter ended March 31, 2005.
This increase is primarily due to increased fees being paid to consultants and
attorneys to put the Company's long term financing in place, along with the
general and administrative expenses incurred at our True To Form Ltd. division,
which was acquired on December 31, 2004.

     DEPRECIATION AND AMORTIZATION. Amortization expense of $49,311, which
represents three months of amortization of the intangible licensed technologies,
was recognized in the quarter ended March 31, 2005 and 2004. Depreciation
expense of $1,957 represents depreciation expense on assets in service at our
True to Form Ltd. division.

     OTHER INCOME. Other income in the quarter ended March 31, 2005 consisted of
$1,225 in interest charged to Tulix for interest on their notes.

     INTEREST EXPENSE. Interest expense for the quarter ended March 31, 2005 was
$1,204,259. It consisted of $1,189,508 of interest in connection with the
beneficial conversion features and amortization of warrant features related to
convertible notes, and $14,571 in accrued interest expense on other borrowings.

     Interest expense for the quarter ended March 31, 2004 consisted of $74,564
in interest charges on the Series B, C, D and E preferred stock and $7,800 in
interest expense on the notes related to the Licensed Technologies Division.

LIQUIDITY AND CAPITAL RESOURCES

     Our sources of capital are extremely limited. We have incurred operating
losses since inception and as of March 31, 2005, we had an accumulated deficit
of $30,530,794 and a working capital deficit of $2,356,492.

                                       21
<PAGE>

     On September 30, 2003, we entered into a private equity credit agreement
with Brittany Capital Management LLC under which we had an option to issue and
sell to Brittany up to $10,000,000 of our common stock over three years. In
connection with this agreement, we filed a registration statement on Form SB-2
with the Securities Exchange Commission to register 25,651,000 shares of our
common stock for resale by Brittany and Econ Investor Relations. However, the
registration statement was not declared effective by the Securities and Exchange
Commission. In December 2004, the private equity credit agreement terminated in
accordance with its terms, and we withdrew the registration statement.

     In June 2004 we entered into a second exchange agreement with Brittany to
acquire certain of their shares of our common stock at a price of $0.10 per
share. On September 22, 2004, we issued 490.5 shares of our Series I convertible
preferred stock to Brittany in exchange for Brittany's surrender of 4,905,000
shares of our common stock. In addition Brittany agreed to loan us $100,000
under a convertible note. As of March 31, 2005 we had borrowed $75,000 under
this agreement.

     On October 19, 2004, the Company entered into a Securities Purchase
Agreement with Southridge Partners LP. Under the Securities Purchase Agreement
Southridge shall purchase a nonnegotiable 2% secured convertible promissory note
with a maturity date of October 19, 2006 in the amount of $250,000. Southridge
may, at its option, convert the note into Common Stock at a conversion price of
$0.02. Conversion rights are restricted in that Southridge may not at any time
have beneficial ownership of more than 4.999% of the total number of issued and
outstanding shares of Common Stock. Should the Company's Common Stock fall below
$0.03 cents for ten consecutive trading days Southridge may force prepayment at
140% of the principle amount. Also as a part of the Securities Purchase
Agreement the Company issued a Common Stock Purchase Warrant entitling
Southridge to purchase 10,000,000 shares of Common Stock at an exercise price of
$0.025 per share. Conversion rights are restricted in that Southridge may not at
any time have beneficial ownership of more than 4.999% of the total number of
issued and outstanding shares of Common Stock. The Warrant may be exercised on a
"cashless" basis at the election of the holder.

     On October 21, 2004, the Company entered into a Securities Purchase
Agreement with Dean M. DeNuccio. Under the Securities Purchase Agreement Mr.
DeNuccio shall purchase a nonnegotiable 2% secured convertible promissory note
with a maturity date of October 21, 2006 in the amount of $25,000. Mr. DeNuccio
may, at his option, convert the note into Common Stock at a conversion price of
$0.02. Conversion rights are restricted in that Mr. DeNuccio may not at any time
have beneficial ownership of more than 4.999% of the total number of issued and
outstanding shares of Common Stock. Should the Company's Common Stock fall below
$0.03 cents for ten consecutive trading days Mr. DeNuccio may force prepayment
at 140% of the principle amount. Also as a part of the Securities Purchase
Agreement the Company issued a Common Stock Purchase Warrant entitling Mr.
DeNuccio to purchase 1,000,000 shares of Common Stock at an exercise price of
$0.025 per share. Conversion rights are restricted in that Mr. DeNuccio may not
at any time have beneficial ownership of more than 4.999% of the total number of
issued and outstanding shares of Common Stock. The Warrant may be exercised on a
"cashless" basis at the election of the holder.

     On November 5, 2004, the Company entered into a Securities Purchase
Agreement with Colonial Fund, LLC ("Colonial"). Under the Securities Purchase
Agreement Colonial shall purchase a nonnegotiable 2% secured convertible
promissory note with a maturity date of November 5, 2006 in the amount of
$50,000. Colonial may, at their option, convert the note into Common Stock at a
conversion price of $0.02. Conversion rights are restricted in that Colonial may
not at any time have beneficial ownership of more than 4.999% of the total
number of issued and outstanding shares of Common Stock. Should the Company's
Common Stock fall below $0.03 cents for ten consecutive trading days Colonial
may force prepayment at 140% of the principle amount. Also as a part of the
Securities Purchase Agreement the Company issued a Common Stock Purchase Warrant
entitling Colonial to purchase

                                       22
<PAGE>

2,000,000 shares of Common Stock at an exercise price of $0.025 per share.
Conversion rights are restricted in that Southridge may not at any time have
beneficial ownership of more than 4.999% of the total number of issued and
outstanding shares of Common Stock. The Warrant may be exercised on a "cashless"
basis at the election of the holder.

     On November 10, 2004, the Company entered into a Securities Purchase
Agreement with Deer Creek. Under the Securities Purchase Agreement Deer Creek
shall purchase a nonnegotiable 2% secured convertible promissory note with a
maturity date of November 10, 2006 in the amount of $50,000. Deer Creek may, at
their option, convert the note into Common Stock at a conversion price of $0.02.
Conversion rights are restricted in that Deer Creek may not at any time have
beneficial ownership of more than 4.999% of the total number of issued and
outstanding shares of Common Stock. Should the Company's Common Stock fall below
$0.03 cents for ten consecutive trading days Deer Creek may force prepayment at
140% of the principle amount. Also as a part of the Securities Purchase
Agreement the Company issued a Common Stock Purchase Warrant entitling Deer
Creek to purchase 2,000,000 shares of Common Stock at an exercise price of
$0.025 per share. Conversion rights are restricted in that Southridge may not at
any time have beneficial ownership of more than 4.999% of the total number of
issued and outstanding shares of Common Stock. The Warrant may be exercised on a
"cashless" basis at the election of the holder.

SECOND PURCHASE AGREEMENT WITH SOUTHRIDGE PARTNERS

     On January 31, 2005, we entered into a Second Securities Purchase Agreement
with Southridge Partners LP, one of our existing investors, whereby we agreed to
sell a convertible promissory note in the principal amount of $250,000 and
warrant to purchase up to 10,000,000 shares of our common stock to Southridge in
exchange for its $250,000 investment. Under the terms of this purchase
agreement, Southridge may, at its option, and at any time prior to July 1, 2005,
purchase an additional note in the principal amount of up to $1,500,000, and
otherwise on substantially the same terms as the note issued on January 31,
2005.

     The note is convertible, at the option of the holder, into shares of our
common stock at a conversion price of $0.02 per share. Southridge may require us
to repurchase some or all of its note if the market price of our common stock
falls below $0.03 per share for ten (10) consecutive trading days, at a
repurchase price equal to 140% of the principal amount of the note. In the event
we default under the terms of the note, the entire outstanding principal (and
any outstanding interest accrued thereon) shall become immediately due and
payable, and the interest rate will rise to 18% per annum.

     We have secured the payment of the notes with a subordinated security
interest in our accounts, general intangibles, inventories, and other
collateral. In addition, in the event we propose to register securities under
the Securities Act of 1933, as amended, we are required to notify Southridge in
advance of such registration and, at its request (subject to limited
exceptions), include the shares of our common stock underlying the note and
warrant on the registration statement filed in connection with such registration
(and assume any expenses associated therewith).

     The warrant has an expiration date of January 31, 2010. It contains a
cashless exercise provision whereby the holder may pay the exercise price
associated with any exercise by having us withhold a number of shares otherwise
issuable upon such exercise having a fair market value equal to the applicable
aggregate exercise price. In the event such provision is used with respect to an
exercise, we would receive no proceeds upon such exercise.

                                       23
<PAGE>

ENTRANCE INTO EXCHANGE AGREEMENT WITH WOODWARD LLC

     On January 31, 2005, we entered into an Exchange Agreement with Woodward
LLC pursuant to which we acquired promissory notes, and have accordingly assumed
all rights pertaining thereto, issued by Eurotech Ltd. The notes are currently
in default and have an aggregate outstanding principal amount of $290,000. The
notes carry a default annual interest rate of 18% and are past due in their
entirety. In exchange for these notes, we issued to Woodward a promissory note
in the principal amount of $250,000.

     Under the terms of the Exchange Agreement, in the event we propose to
register securities under the Securities Act of 1933, as amended, we are
required to notify Woodward in advance of such registration and, at its request
(subject to limited exceptions), include the shares of our common stock
underlying the note on the registration statement filed in connection with such
registration, and assume any expenses associated therewith.

SOUTHRIDGE EXERCISES OPTION TO PURCHASE ADDITIONAL NOTES AND WARRANTS

     On March 2, 2005, Southridge Partners LP exercised its option to purchase
an additional note and warrant under its Second Securities Purchase Agreement.
In connection with such exercise, we issued to Southridge a convertible
promissory note in the principal amount of $175,000 and a warrant to purchase up
to 7,000,000 shares of our common stock in exchange for its $175,000 investment.
The note is convertible, at the option of the holder, into shares of our common
stock at a conversion price of $0.02 per share. Southridge may require us to
repurchase some or all of its note if the market price of our common stock falls
below $0.03 per share for ten (10) consecutive trading days, at a repurchase
price equal to 140% of the principal amount of the note. In the event we default
under the terms of the note, the entire outstanding principal (and any
outstanding interest accrued thereon) shall become immediately due and payable,
and the interest rate will rise to 18% per annum. The note matures on March 2,
2007.

SOUTHRIDGE EXERCISES OPTION TO PURCHASE ADDITIONAL NOTES AND WARRANTS

     On April 11, 2005, Southridge Partners LP exercised its option to purchase
an additional note and warrant pursuant to the Second Securities Purchase
Agreement. In connection with such exercise, we issued to Southridge a
convertible promissory note in the principal amount of $125,000 and a warrant to
purchase up to 5,000,000 shares of our common stock to Southridge in exchange
for its $125,000 investment. The note is convertible, at the option of the
holder, into shares of our common stock at a conversion price of $0.02 per
share. Southridge may require us to repurchase some, or all, of its note if the
market price of our common stock falls below $0.03 per share for ten (10)
consecutive trading days, at a repurchase price equal to 140% of the principal
amount of the note. In the event we default under the terms of the note, the
entire outstanding principal (and any outstanding interest accrued thereon)
shall become immediately due and payable, and the interest rate will rise to 18%
per annum. The note matures on April 11, 2007.

     We can provide no assurance that the financing sources described above, or
any other financing that we may obtain in the future (if we are able to obtain
financing from any other sources, and we can provide no assurances that we will
be able to obtain any such financing), will enable us to sustain our operations.
The aforementioned factors raise substantial doubt about our ability to continue
as a going concern. The financial statements included herein have been prepared
assuming we are a going concern and do not include any adjustments that might
result should we be unable to continue as a going concern.



                                       24
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     Our management has evaluated, under the supervision and with the
participation of our president and chief executive officer and acting chief
financial officer, the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report. Based upon that evaluation,
our president and chief executive officer and acting chief financial officer
concluded that our disclosure controls and procedures were effective to provide
reasonable assurance that we record, process, summarize and report the
information we must disclose in reports that we file or submit under the
Securities Exchange Act of 1934, as amended, within the time periods specified
in the SEC's rules and forms.

     The effectiveness of a system of disclosure controls and procedures is
subject to various inherent limitations, including cost limitations, judgments
used in decision making, assumptions about the likelihood of future events, the
soundness of internal controls, and the risk of fraud. Because of these
limitations, there can be no assurance that any system of disclosure controls
and procedures will be successful in preventing all errors or fraud or in making
all material information known in a timely manner to the appropriate levels of
management.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

     During the three months ended March 31, 2005, there were no changes in our
internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS:

     On February 9, 2005 Global Matrechs, Inc, filed suit in the Supreme Court
of the State of New York, County of New York against Eurotech, Ltd. for its
failure to fulfill its obligations under the license agreement between the
parties dated May 22, 2003. The suit also seeks the enforcement of the notes
issued by Eurotech to Woodward, LLC which were assumed by Global Matrechs in the
exchange agreement between Global Matrechs and Woodward on January 31, 2005. The
complaint seeks damages totaling $672,677 plus interest and attorney's fees
which are yet to be determined.

     On April 13, 2005 Carey Naddell, CEO of Eurotech, Ltd., filed suit against
the Company for damages based upon an alleged breach of a written service
agreement. The Company has responded and feels at this time there is no merit to
this action. We will diligently defend this action.

ITEM 6. EXHIBITS

     (a) Exhibits

    Exhibit No.      Description
    -----------      -----------

       31.1          Certification pursuant to Section 302 of the Sarbanes-Oxley
                     Act of 2002
       32.1          Certification pursuant to Section 906 of the Sarbanes-Oxley
                     Act of 2002

                                       25
<PAGE>

                                   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.



                                  GLOBAL MATRECHS, INC.


                                  By: /s/ Michael Sheppard
                                      -------------------------
                                  Name: Michael Sheppard
                                  Title: President, Chief Executive Officer, and
                                         Acting Chief Financial Officer
                                  Date: May 26, 2005























                                       26
<PAGE>

                                  EXHIBIT INDEX

    Exhibit No.      Description
    -----------      -----------

       31.1          Certification pursuant to Section 302 of the Sarbanes-Oxley
                     Act of 2002
       32.1          Certification pursuant to Section 906 of the Sarbanes-Oxley
                     Act of 2002



































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