UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549

                           FORM 10-QSB

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

For the quarterly period ended June 30, 2005

                               OR

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

For the transition period from                to                 .
                               --------------    ----------------

Commission file number 0-17966

                       MICRONETICS, INC.
-----------------------------------------------------------------
 (Exact name of small business issuer as specified in its charter)

          Delaware                          22-2063614
-------------------------------         -------------------------
(State or other jurisdiction of         (IRS Employer
incorporation or organization)           Identification No.)

              26 Hampshire Drive, Hudson NH         03051
-----------------------------------------------------------------
(Address of principal executive offices)          (Zip Code)

                         (603) 883-2900
-----------------------------------------------------------------
                  (Issuer's telephone number)

-----------------------------------------------------------------
      (Former name, former address and former fiscal year,
                   if changed since last report)

Check  whether  the issuer (1) filed all reports required  to  be
filed by Section 13 or 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   X     No
     ---       ---

Transitional Small Business Disclosure Format (Check One):

Yes         No  X
     ---       ---

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of The Exchange Act)

Yes         No
     ---       ---

As  of  August 4, 2005, the issuer had 4,430,706 shares of common
stock, par value $.01 per share, outstanding.





                       MICRONETICS, INC.

                             INDEX
                             -----
                                                        Page No.
                                                        --------
Part I.  Financial Information:

     Item 1.   Financial Statements.

               Consolidated Condensed Balance
               Sheets - June 30, 2005 (unaudited)
               and March 31, 2005 (audited)                 3-4

               Consolidated Condensed Statements
               of Income(unaudited) - Three Months
               Ended June 30, 2005 and June 30, 2004        4-5

               Consolidated Statement of Shareholders'      5-6
               Equity (unaudited)

               Consolidated Condensed Statements
               of Cash Flows (unaudited) - Three Months
               Ended June 30, 2005 and June 30, 2004        6-8

               Notes to interim Consolidated Condensed
               Financial Statements (unaudited)             8-33


     Item 2.   Management's Discussion and Analysis
               or Plan of Operation.                        19-30

     Item 3.   Controls and Procedures                      31


Part II.  Other Information:

     Item 1.   Legal Proceedings.                           31

     Item 2.   Unregistered Sales of Equity Securities
               And Use of Proceeds.                         32

     Item 3.   Defaults Upon Senior Securities              32

     Item 4.   Submission of Matters to Vote of
               Security Holders                             32

     Item 5.   Other Information                            33

     Item 6.   Exhibits                                     33

<TABLE> <CAPTION>
                   MICRONETICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS



                                             June 30,    March 31,
                                               2005         2005
                                             ---------   --------
                                            (unaudited)  (audited)
                 ASSETS

 <S>                                      <C>          <C>
 Cash and cash equivalents                $  2,393,490 $ 2,377,893

 Marketable securities                         568,146     562,802

 Accounts receivable, net of
   allowance for doubtful accounts
   of $94,579 and $66,625 as of June 30,
   2005                                      3,942,952   2,465,725
   and March 31, 2005, respectively

 Inventories                                 5,903,453   4,473,715

 Prepaid expenses                               71,258     227,007

 Other current assets                            6,959           -
                                            ----------  ----------

   Total current assets                     12,886,258  10,107,142
                                            ----------  ----------

Property, plant and equipment - net          4,102,118   3,406,701

Other assets:

 Security deposits                              13,637       5,335

 Intangible Assets                           2,570,000           -

 Goodwill                                    3,041,517   1,117,197
                                            ----------  ----------

   Total other assets                        5,625,154   1,122,532
                                            ----------  ----------

                                           $22,613,530 $14,636,375
                                            ==========  ==========
  LIABILITIES AND SHAREHOLDERS' EQUITY

  Accounts payable                         $   655,132 $   372,265

 Accrued expenses                            1,167,061     971,673

 Deferred revenue                               45,183       9,725

 Income taxes payable                          309,668      75,882

 Deferred tax liability - current                6,504       6,504
 portion

 Short-term debt                               250,000     250,000

 Long-term debt - current portion              855,992     231,589
                                            ----------  ----------

   Total current liabilities                 3,289,540   1,917,638
                                            ----------  ----------

Long-term debt - net of current portion      6,007,442     734,418

Deferred tax liability                       1,155,928     169,785
                                            ----------  ----------
   Total liabilities                        10,452,910   2,821,841
                                            ----------  ----------

Commitments and contingencies

Shareholders' equity:
  Preferred stock - $0.10 par value;
 100,000 shares
   authorized; no shares issued and
   outstanding
  Common stock - $0.01 par value;
 10,000,000 shares                              47,741      47,699
   authorized; 4,774,227 and 4,769,872
   shares issued as of
   June 30, 2005 and March 31, 2005,
   respectively

 Additional paid in capital                  5,988,038   5,961,693

 Retained earnings                           7,651,855   7,332,156
                                            ----------  ----------

                                            13,687,634  13,341,548
Treasury stock, 358,541 and 358,541
 shares  at cost as of June 30 and March
 31, 2005, respectively                     (1,527,014) (1,527,014)
                                            ----------  ----------

   Total shareholders' equity               12,160,620  11,814,534
                                            ----------  ----------
                                           $22,613,530 $14,636,375
                                            ==========  ==========

See notes to consolidated financial statements.

</TABLE>

<TABLE> <CAPTION>

               MICRONETICS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME
                           (unaudited)

                                       Three Months Ended June 30,
                                           2005           2004
                                        ----------     ----------
<S>                                <C>                 <C>
Net sales                          $    3,941,132      $ 3,379,331
Cost of sales                           2,350,572        1,839,086
                                       ----------       ----------
Gross profit                            1,590,560        1,540,245
                                       ----------       ----------
Operating expenses:
  Selling, general and administrative     945,432          787,004
  Research and development                110,534          234,061
                                       ----------       ----------
      Total operating expenses          1,055,966        1,021,065
                                       ----------       ----------
Income from operations                    534,594          519,180
                                       ----------       ----------
Other (expenses) income:
  Interest income                          20,946             (225)
  Interest expense                        (35,744)         (15,334)
  Rental income                             4,649           13,947
  Miscellaneous income (expense)           (4,609)          20,812
  Total other (expense) income            (14,758)          19,200

Income before provision for income
  taxes                                   519,836          538,380

Provision for income taxes                200,137           88,433
                                       ----------       ----------
Net income                          $     319,699       $  349,947
                                       ==========       ==========
Earnings per common share:
  Basic                             $        0.07       $     0.08
                                       ==========       ==========
  Diluted                           $        0.07       $     0.08
                                       ==========       ==========

Weighted average common shares outstanding:

  Basic                                 4,413,414        4,286,962
  Diluted                               4,553,138        4,361,937



         See notes to consolidated financial statements.

</TABLE>

<TABLE> <CAPTION>
         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                              (unaudited)


                            Common Stock       Additional
                                      Par      Paid-In     Retained  Treasury
                         Shares       Value    Capital     Earnings  Stock(a)      Total
                         ------       ------   ----------  --------  ----------  ----------
<S>                     <C>           <C>      <C>        <C>        <C>         <C>
Balance - Mar 31, 2005  4,769,872     47,699   5,961,693  7,332,156  (1,527,014) 11,814,545

Exercise of stock
  options                   4,375         42      13,650                             13,692

Issuance of options
  for service                                      1,850                              1,850

Tax benefit from exercise
  of stock options                                10,845                             10,845

Net income                                                  319,699                 319,699
                        ---------     ------   ---------  ---------  ---------   ----------
Balance -
  June 30, 2005         4,774,247     47,741   5,988,038  7,651,855 (1,527,014)  12,160,620
                        =========     ======   =========  =========  =========   ==========



(a) Treasury Stock number of shares were 358,541 as of March 31,
    2005, and June 30, 2005, respectively.


         See notes to consolidated financial statements.

</TABLE>

<TABLE> <CAPTION>

               MICRONETICS, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (unaudited)

                                         Three Months Ending June 30,
                                               2005        2004
                                             --------    --------
<S>                                        <C>         <C>
Cash flow from operating activities:
Net income                                 $  319,699  $  349,947
Adjustments to reconcile net income
 to net cash provided by operating activities
     Depreciation & amortization              217,080     111,970
     Unrealized gain from marketable
      securities                               (5,344)       -
     Bad debt expense                          13,594      (5,603)
     Inventory reserve                         43,704     (32,814)
     Deferred taxes                               -        37,203
     Options issued for services                1,850       2,095
     Common stock issued for settlement           -        84,000
     Tax benefit upon exercise of stock
      options                                  10,845      82,932

Changes in operating assets and liabilities:
  (net of assets acquired)
     Accounts receivable                     (170,532)    507,550
     Inventories                             (384,396)   (307,804)
     Income taxes payable                     (35,114)   (315,796)

Prepaid expenses, other current
  assets, and other assets                    152,538      (9,242)
     Accounts payable                          (9,695)   (101,335)
     Accrued expenses and deferred revenue    182,867    (134,752)
                                            ---------   ---------
Net cash provided by operating activities     337,096     268,351
                                            ---------   ---------
Cash flows from investing activities
     Net proceeds from sale of marketable
      securities                                 -            899
     Purchase of equipment                   (239,120)   (217,095)
     Stealth acquisition, net of cash
      acquired                             (5,993,496)       -
                                            ---------   ---------
Net cash used in investing activities      (6,232,616)   (216,196)
                                            ---------   ---------
Cash flows from financing activities:
     Proceeds from line of credit                -        250,000
     Proceeds from loan for acquisition     6,000,000        -
     Repayment of notes and mortgages payable    -           -
     Payments on mortgages and notes payable  (81,537)    (78,510)
     Capital lease obligations payments       (21,038)    (21,780)
     Proceeds from exercise of stock options   13,692     193,248
     Purchase of treasury shares                 -        (16,271)
                                            ---------   ---------
Net cash provided by financing activities   5,911,117     326,687
                                            ---------   ---------
Net change in cash and cash equivalents        15,597     378,842

Cash and cash equivalents at beginning
  of period                                 2,377,893   2,147,836
                                            ---------   ---------
Cash and cash equivalents at end of
  period                                   $2,393,490  $2,526,678
                                            =========   =========
Supplemental disclosure of cash flow
  information:

     Cash paid during the period for:
           Interest                        $   18,588  $   15,334
                                            ---------   ---------
           Income taxes                    $  446,500  $  384,000
                                            ---------   ---------
Schedule of non-cash activities:

In FY 2005, the Company issued 8,000 options of
  common stock for legal services. These shares
  vested at $4,200 in FY2004,  $7,880 in FY2005,
  and $1,850 during Q1 FY2006.

Assets received from the Stealth acquisition ($000)

     Value of assets acquired            $ 7,722
     Paid for capital stock               (6,963)
     Net liabilities assumed             $   759




         See notes to consolidated financial statements.

</TABLE>


               MICRONETICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.   BASIS OF PRESENTATION
------    ---------------------

In   the   opinion  of  management,  the  accompanying  unaudited
consolidated condensed financial statements have been prepared in
accordance with accounting principles generally accepted  in  the
United  States  of  America  ("US GAAP")  for  interim  financial
information  and  the  rules  of  the  Securities  and   Exchange
Commission for quarterly reports on Form 10-QSB. It is  suggested
that these consolidated condensed financial statements be read in
conjunction with the Company's Annual Report on Form  10-KSB  for
its fiscal year ended March 31, 2005.  The statements contain all
adjustments  (consisting  of only normal  recurring  adjustments)
that  are  necessary  in order to present  fairly  the  financial
position as of June 30, 2005, the results of operations  and  the
cash  flows for the three month periods ended June 30,  2005  and
2004.


The  results  of operations for the three months ended  June  30,
2005  are  not necessarily indicative of the results of the  full
year.


Note 2.   PRINCIPAL  BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT
          -------------------------------------------------------
          ACCOUNTING POLICIES
          -------------------

Summary of operations and basis of consolidation -

Micronetics, Inc. and subsidiaries (collectively the "Company" or
"Micronetics")   are   engaged  in   the   design,   development,
manufacturing and marketing of a broad range of high  performance
wireless   components  and  test  equipment  used  in   cellular,
microwave, satellite, radar and communication systems around  the
world.

The  consolidated financial statements include  the  accounts  of
Micronetics,    Inc.   ("Micronetics")   and   its   wholly-owned
subsidiaries,  Microwave  &  Video Systems,  Inc.  ("MVS"),  Enon
Microwave,  Inc. ("Enon"), Microwave Concepts, Inc.  ("MicroCon")
and    Stealth   Microwave,   Inc.("Stealth").    All    material
intercompany  balances and transactions have been  eliminated  in
consolidation.

The  Company  generates its revenues from the sale  of  products,
technology  development and licensing.   The  Company  sells  its
products  through a direct sales force and sales representatives.
The  Company's  products are generally hardware and  occasionally
bundled  hardware  and  software that are delivered  together  to
original   equipment  manufacturers  (OEMs)  of  a   variety   of
telecommunications  and networking products that  are  considered
end users.

Use  of  estimates - The preparation of financial  statements  in
conformity with accounting principles generally accepted  in  the
United  States  of America requires management to make  estimates
and  assumptions that affect the reported amounts of  assets  and
liabilities  and disclosure of contingent assets and  liabilities
at  the date of the financial statements and the reported amounts
of  revenue and expenses during the reporting period.   Estimates
include  reserves  for accounts receivable and inventory,  useful
lives  of  property,  plant and equipment,  intangibles,  accrued
liabilities,  and  deferred income taxes.  Actual  results  could
differ from those estimates.

Cash  and  cash  equivalents - For purposes of the statements  of
cash   flows,  the  Company  considers  all  highly  liquid  debt
instruments with an original maturity of three months or less  to
be cash equivalents.

Marketable  securities - The Company accounts for its investments
in   marketable  securities  in  accordance  with  Statement   of
Financial  Accounting Standards No. 115, "Accounting for  Certain
Investments   in   Debt   and  Equity  Securities".    Management
determines  the appropriate classification of securities  at  the
time  of  purchase and reevaluates such designation  as  of  each
balance sheet.     Trading securities are carried at fair  market
with  net unrealized holding gains or losses in the statement  of
income.

Accounts  receivable - Accounts receivable are reported at  their
outstanding unpaid principal balances reduced by an allowance for
doubtful accounts.  The Company estimates doubtful accounts based
upon   review   of  the  aging  of  outstanding  accounts,   loss
experiences,  factors related to specific customers'  ability  to
pay and current economic trends.
The   Company   writes  off  accounts  receivable   against   the
allowance when a balance is determined to be uncollectible.

Inventories  -  Inventories are stated  at  the  lower  of  cost,
determined by the first-in, first-out method, or market.

Property,  Plant  and Equipment - Property, plant  and  equipment
are stated at cost less accumulated depreciation. Depreciation is
computed  by  straight-line method at rates adequate to  allocate
the cost of applicable assets over their expected useful lives.

Goodwill  and  intangible assets - Purchase  accounting  requires
extensive  use of accounting estimates and judgments to  allocate
purchase  price to the fair market value of the assets  purchased
and  liabilities assumed.  We have accounted for our acquisitions
using the purchase method of accounting.  Values were assigned to
goodwill  and intangible assets based on third-party  independent
valuations,  as  well as management's forecasts  and  projections
that include assumptions related to future revenue and cash flows
generated from the acquired assets.

Effective January 1, 2002, the Company adopted the provisions  of
SFAS  No.  142,  Goodwill  and  other  Intangible  Assets.   This
statement  affects its treatment of goodwill and other intangible
assets.   The statement requires impairment tests be periodically
repeated  and  on an interim basis, if certain conditions  exist,
with  impaired  assets written down to fair value.  Additionally,
existing  goodwill  and intangible assets must  be  assessed  and
classified  within  the statement's criteria.  Intangible  assets
with finite useful lives will continue to be amortized over those
periods.

The  Company  determines the fair value of each of the  reporting
units  based  on  a  discounted cash flow income  approach.   The
income approach indicates the fair value of a business enterprise
based on the discounted value of the cash flows that the business
can  be  expected  to generate in the future.  This  analysis  is
largely  based upon projections prepared by the Company and  data
from  sources of publicly available information available at  the
time of preparation.  These projections are based on management's
best  estimate  of future results.  In making these  projections,
the  Company  considers the markets it addresses, the competitive
environment and the Company's advantages.  There will usually  be
differences  between estimated and actual results as  events  and
circumstances  frequently do not occur  as  expected,  and  those
differences may be material.  In addition, the Company performs a
macro  assessment of the overall likelihood that it would achieve
the projected cash flows and performed sensitivity analysis using
historical data as the basis for projected cash flows.

As  of  June 30, 2005, the Company has goodwill of $3,041,517  in
connection with the Enon and Stealth acquisitions. (See Note 7.)

Long-lived  assets  -  Effective January  1,  2002,  the  Company
adopted  SFAS No. 144, Accounting for the Impairment or  Disposal
of  Long-Lived Assets, which supersedes SFAS No. 121,  Accounting
for  the  Impairment  for Long-Lived Assets  and  for  Long-Lived
Assets  to  be  Disposed  Of, and the  accounting  and  reporting
provisions of APB Option No. 30. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of  long-
lived  assets.  The statement requires that long-lived assets  be
reviewed  for  possible impairment, if certain conditions  exist,
with impaired assets written down to fair value.

The  Company  determines  the fair value  of  certain  long-lived
assets  based  on  a discounted cash flow income  approach.   The
income  approach  indicates the fair value of a long-lived  asset
based  on  the discounted value of the cash flows that the  long-
lived  asset can be expected to generate in the future  over  the
life  of  the  long-lived  asset.  This analysis  is  based  upon
projections   prepared   by  us.   These  projections   represent
management's  best estimate of future results.  In  making  these
projections,  the Company considers the market it is  addressing,
the  competitive environment and the Company's advantages.  There
will  usually be differences between estimated and actual results
as  events and circumstances frequently do not occur as expected,
and  those differences may be material.  In addition, the Company
performs  a  macro assessment of the overall likelihood  that  we
would  achieve the projected cash flows and performed sensitivity
analysis  using  historical data as the basis for projected  cash
flows.

Income  taxes  -  The Company recognizes income taxes  under  the
asset and liability method. Under this method deferred tax assets
and   liabilities  are  established  for  temporary  differences.
Temporary   differences  occur  when  income  and  expenses   are
recognized  in  different  periods  for  financial      reporting
purposes  and  for purposes for computing income taxes  currently
payable.   A  valuation allowance is provided  when  it  is  more
likely  than  not that some portion, or all, of the deferred  tax
asset will not be realized.   No valuation allowance was required
at June 30, 2005 and March 31, 2005.

Concentration of credit risk - The Company maintains cash in bank
deposit accounts that, at times, exceed federally insured limits.
The Company has not experienced any losses on these accounts.

Fair  value  of  financial instruments  -  The  carrying  amounts
reported  in  the consolidated balance sheet for  cash,  accounts
receivables,  accounts payable, and accrued expenses  approximate
fair value based on the short-term maturity of these instruments.
The   carrying  amount  of  the  Company's  long-term  debt  also
approximates fair value.

Revenue  recognition - Revenues from products are  recognized  in
accordance  with SEC Staff Accounting Bulletin No. 104,  "Revenue
Recognition  in  Financial  Statements"  ("SAB  104")  when   the
following criteria are met: persuasive evidence of an arrangement
exists, delivery of product has occurred, the price to the  buyer
is  fixed  or determinable, and collectibility is probable.   The
Company  has no obligation to customers after the date  on  which
products   are   delivered  other  than  pursuant   to   warranty
obligations.

At  this  time, Micronetics does not offer a right to return  any
Micronetics product (other than for warranty obligations), has no
post-shipment obligations, has no policy of awarding  credits  or
discounts  and  currently offers no price protection  or  similar
privileges.   Unless  purchasers acquire  an  extended  warranty,
Micronetics  offers a one-year warranty policy.   Warranty  costs
are taken as a period expense.  As of June 30, 2005 and March 31,
2005,  the  Company  has not set up a warranty  reserve,  due  to
warranty expense being insignificant.

Earnings  per share - Basic and diluted net income per  share  is
calculated based on the net income for each period divided by the
weighted  average  number of common shares and common  equivalent
shares  outstanding during each period. Common stock  equivalents
represent the dilutive effect of the assumed exercise of  certain
outstanding stock options.


               MICRONETICS, INC. AND SUBSIDIARIES
                       EPS CALCULATIONS
			 JUNE 2005


                                          Three months ended
                                       June 30,       June 30,
                                         2005           2004
                                       ---------      ---------


  Net Income ($000)                $         320  $         350
  Basic income per share           $        0.07  $        0.08

  Average shares outstanding (000)         4,413          4,287

  Options Outstanding - Common
   stock equivalents (000)                   140             75
                                       ---------      ---------
  Average common and common equivalent
   shares outstanding (000)                4,553          4,362
                                       ---------      ---------
  Fully diluted income per share   $        0.07  $        0.08
                                       =========      =========


Stock-Based Compensation - The Company measures employee stock-
based compensation cost using Accounting  Principles  Board  ("APB")
Opinion No. 25 as is permitted by Statement of Financial Accounting
Standards No. 123 ("SFAS  No. 123"), Accounting for Stock-Based
Compensation. Pro forma  information regarding net income (loss) and
net loss per share  is  required by SFAS No. 123, as amended by SFAS
No. 148, and  has been determined as if the Company had accounted for
its stock  options  granted using the fair value method.  The  fair
value  for these options was estimated at the date of grant using
the   Black-Scholes  option  pricing  model  with  the  following
weighted-average  assumptions for the three month  periods  ended
June  30,  2005 and 2004: risk-free interest rates of  3.63-4.17%
respectively;  no  dividend  yield;  volatility  factors  of  the
expected  market price of the Company's common stock of  75%  and
expected  lives of the options were estimated at approximately  2
years.   The weighted average fair value of stock options granted
for  the  three month periods ended June 30, 2005 and  2004  were
$3.67 and  $3.29, respectively.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no  vesting
restrictions  and  are fully transferable.  In  addition,  option
valuation   models   require  the  input  of  highly   subjective
assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect
the  fair  value estimate, in management's opinion, the  existing
models do not provide a reliable single measure of the fair value
of its employee stock options.

For  purposes of pro forma disclosures, the estimated fair  value
of  the options is amortized to expense over the options' vesting
period. The Company's pro forma information is as follows:


                                               Three Months Ended
                                                    June 30,
                                                2005        2004
                                              --------   ----------

     Net income - as reported               $    319,699 $  349,947
                                                             52,581
     Deduct:     stock-based     employee         88,175
     compensation   expense    determined
     under  fair-value based method,  net
     of income tax effect
                                            ------------ -----------
     Net income - pro forma                 $    231,524 $   297,366
                                            ============ ===========
     Basic income per share-as reported     $        .07 $       .08
                                            ============ ===========
     Basic income per share-pro forma       $        .05 $       .07
                                            ============ ===========
     Diluted income per share-as reported   $        .07 $       .08
                                            ============ ===========
     Diluted income per share-pro forma     $        .05 $       .07
                                            ============ ===========


Recent  accounting pronouncements - In May 2005, the FASB  issued
SFAS  No.  154,  Accounting Changes and Error Corrections,  which
replaces APB Opinion No. 20, Accounting Changes, and SFAS No.  3,
Reporting  Accounting  Changes in Interim  Financial  Statements.
Opinion No. 20 had required that changes in accounting principles
be recognized by including the cumulative effect of the change in
the  period  in which the new accounting principle  was  adopted.
SFAS No. 154 requires retrospective application of the change  to
prior  periods' financial statements, unless it is  impracticable
to  determine  the  period-specific effects of  the  change.  The
Statement is effective for fiscal years beginning after  December
15,  2005.  The  Company does not believe the  adoption  of  this
statement   will  have  a  material  impact  on   its   financial
statements.

In  November  2004,  the FASB issued SFAS  No.  151,   "Inventory
Costs,"  an  amendment  of  ARB No. 43,  Chapter  4,   "Inventory
Pricing". This statement clarifies that abnormal amounts of  idle
facility  expense, freight, handling costs, and wasted  materials
(spoilage)  should  be recognized as current-period  charges  and
requires  the  allocation of fixed production  overheads  to  the
costs  of  conversion  be  based on the normal  capacity  of  the
production  facilities.  The  provisions  of  SFAS  No.  151  are
effective  for  inventory  costs  incurred  during  fiscal  years
beginning   after  June  15,  2005.   The  Company  is  currently
evaluating  the effects of this statement, which the  Company  is
required  to  adopt  effective April 1, 2006,  on  its  financial
position, results of operations and cash flow.

In  December  2004, the FASB issued SFAS No. 123R,   "Share-Based
Payment," a revision of SFAS No. 123, "Accounting for Stock-Based
Compensation" and superseding APB Opinion No. 25, "Accounting for
Stock Issued to Employees." SFAS No. 123R requires the Company to
expense  grants  made  under  stock  option  and  employee  stock
purchase  plans.   The cost will be recognized over  the  vesting
period  of  the plans. SFAS No. 123R is effective for  the  first
annual  period beginning after December 15, 2005. The Company  is
evaluating the alternatives under the standard, which the Company
is required to adopt in the first quarter of the Company's fiscal
year ending March 31, 2007.


Note 3.   INVENTORIES

Inventories consist of the following:

                                       June 30,       March 31,
                                         2005           2005
                                       ---------      ---------
                                      (Unaudited)     (Audited)

         Raw materials             $   3,638,060  $   2,675,016
         Finished goods                  606,007        501,162
         Work in-process               1,727,940      1,322,387
                                       ---------      ---------
                                       5,972,007      4,498,565
         Less: allowance for
          obsolescence                   (68,554)       (24,850)
                                       ---------      ---------
                                   $   5,903,453  $   4,473,715
                                       =========      =========



Note 4.     LONG-TERM DEBT

The following table summarizes the Company's long-term debt:

                               June 30,       March 31,
                                 2005            2005
                               ---------      ---------
Promissory note - 6.25%
    Due March 2007 (a)        $     -         $  49,998

Acquisition Loan  (e)         $ 6,000,000     $    -
Libor plus 2.25% Due June 2012

Mortgage payable - 5.25%
    Due March 2013 (b)        $   328,001     $ 330,574

Mortgage Payable - 5.75%
    Due February 2009 (c)     $   479,501     $ 508,463

Capital lease obligations (d) $    55,932     $  76,972
                                ---------     ---------
Total                         $ 6,863,434     $ 966,007

Less current portion          $   855,992     $ 231,589
                                ---------     ---------
Long-term debt net of         $ 6,007,442     $ 734,418
     current portion            =========     =========



 (a) In March 2002, the Company entered into a promissory note
payable, with a commercial bank for $1,000,000. The note is for
five years and bears interest at 6.25% per year. Quarterly
repayments of principal of $50,000 are required under the terms
of this note. All business assets of Micronetics secure this
note.

(b) In March 2003, in connection with the purchase of a portion
of commercial condominium housing the Company's Enon division,
the Company entered into a mortgage payable for $352,750. The
note bears interest at 5.25% per annum and is payable in monthly
installments of $2,391, including interest, until March 2013 when
the balance of approximately $223,000 is due. The condominium and
all other tangible property of Enon secure this mortgage.

(c) In February 2004, the Company refinanced its mortgage on its
headquarters, entering into a new five year mortgage payable for
$630,000 with interest at 5.75%, payable in monthly installments,
including interest, of $12,107. This loan is secured by the land
and building of the Company's headquarters.

(d) Obligations Under Capital Leases: commercial
Capital leases payable are reflected at their present value based
upon an interest rate that range from 8.67% to 8.88% per annum.
The assets underlying the leases secure the leases. The assets
are depreciated over their estimated productive lives. (See Note
5.)

(e) In June 2005, the Company secured a $6 million loan for the
Stealth acquisition. This loan has a term of 7 years and matures
in 2012. It bears interest at the current 1 month libor rate plus
2.25%. The Term Loan is guaranteed by Stealth and secured by a
first priority security interest in substantially all of the
Company's and Stealth's assets, including the Company's equity
interests in Stealth.

The Company has been extended a $5,000,000 line of credit from a
commercial bank. This line was issued on May 10, 2005 and expires
on July 31, 2005, with a 1-month LIBOR rate plus 2.25%. The term
has been extended to November 30, 2005.  The Company has drawn
$250,000 in funds as of June 30, 2005. All business assets of
Micronetics secure any withdrawals against this credit line.

In accordance with loans from the Bank, the Company is required
to maintain a minimum net worth of at least $5,000,000, a ratio
of total debt to net worth not exceeding 1.5:1, and a debt
coverage ratio of not less than 1.25:1. The Company is in
compliance with all of these financial ratios.


Note 5.   COMMITMENTS AND CONTINGENCIES
          -----------------------------

     Leases:

     The Company is obligated under various non-cancelable
     Operating leases for manufacturing facilities, which expire
     through October, 2008.

     The aggregate future minimum lease payments, excluding
     escalation charges are as follows:

           Year Ending March 31,
           --------------------

                 2006         $    175,655
                 2007              176,075
                 2008               91,436
                 2009               43,698
                               -----------
                              $    486,864
                               ===========


     Rent expense, for the years ended March 31, 2005 and 2004
     was $143,936 and $145,731, respectively.

     The Company rents to an unaffiliated party, a portion of
     its premises at 28 Hampshire Drive, Hudson NH.
     Rental income for the years ended March 31, 2005 and 2004
     was $55,788 and  $60,971, respectively. This lease expires
     in February 2006.

Earnout Agreement with Stealth:

The Company entered into an agreement at the time of the Stealth
acquisition that provides for earnout payments in the amounts of
$1.8 million and $1.5 million provided certain profitability
targets have been met.



Note 6.   SHAREHOLDERS' EQUITY
          --------------------

During the three months ended June 30, 2005, the Company issued a
total  of 4,375 shares for net proceeds of approximately  $14,000
upon  the  exercise of stock options granted under the  Company's
various option plans.



Note 7.   RECENT ACQUISITION
          ------------------

On  June  10,  2005, the Company acquired all of the  issued  and
outstanding  capital  stock of Stealth  Microwave,  Inc.,  a  New
Jersey   corporation  ("Stealth")  pursuant  to  the  terms   and
conditions of a Stock Purchase Agreement between the Company  and
the  stockholders of Stealth (the "Sellers"). Under the terms  of
the  Stock  Purchase Agreement, the Company paid $6.5 million  in
cash  to the Sellers, $400,000 of which has been placed in escrow
for one year to secure certain indemnification obligations of the
Sellers  to  the  Company  under the  Stock  Purchase  Agreement.
Additional  legal and accounting related fees for the acquisition
totaled approximately $463,000, bringing the total cash price  to
approximately  $6,963,000.  Additionally,  subject   to   Stealth
meeting  certain financial targets for each of the  years  ending
March 31, 2006 and March 31, 2007, the Company will pay up to  an
aggregate  of  $3.3 million in earnout payments to  the  Sellers,
which earnout payments will be accelerated upon the occurrence of
certain  events, including a change of control of the Company  or
Stealth.

The  combination  of  Micronetics with  Stealth  will  provide  a
broader  range of RF/Microwave products, including  linear  power
amplifiers. The capability will provide Micronetics with  further
integrated systems solutions.

The  following  table summarizes the preliminary  estimated  fair
value assigned to the assets acquired and liabilities assumed  at
the date of acquisition:

                                             Assets Acquired
                                          (Liabilities Assumed)
                                          ---------------------
                                             ( in thousands)

Cash and Accounts Receivable                 $    2,290
Inventory                                         1,089
Property, plant and equipment                       673
Other Assets                                         12
Developed Technology Drawings                       290
Customer Relationships                            1,310
Order Backlog                                       490
Covenants not to compete                            480
Goodwill                                          1,924
Deferred Taxes                                     (150)
Deferred Taxes on acquired intangible assets       (836)
Accounts Payable and Accrued Expenses              (609)
                                                  -----
Subtotal                                          6,963

Less: cash assumed                                 (970)
                                                  -----

Net Cash Paid                                $    5,993
                                                  =====


The  acquisition of Stealth is accounted for as a purchase  under
SFAS  No. 141. Accordingly, the operating results of Stealth have
been  included in the Company's consolidated financial statements
since  the  June 10, 2005 acquisition date. The Company estimated
the useful lives of the acquired other intangible assets to be 1-
7  years and has included them in Intangible Assets, net, in  the
accompanying consolidated balance sheet as of June 30, 2005.  The
values assigned to intangible assets were based on an independent
appraisal.  The  allocation of the purchase price is  preliminary
and may be subject to adjustments.


Intangible Assets subject to amortization include:

                                            Life     Accumulated
                                  ($ 000)   (years)  Amortization
                                  -------   -------  ------------

Developed Technology - Drawings      290       5        7
Customer Relationships             1,310       7       30
  (non-contractual)
Order Backlog                        490       1       11
Covenants Not to Compete             480       2       10
                                   -----       -       --
Total Intangibles                  2,570               58

Intangible Assets not subject
  to amortization include:

Assembled Workforce                  310
Residual Goodwill                  1,614

Total Goodwill                     1,924


The  Company amortizes intangible assets with finite  lives  over
the estimated useful lives of the respective assets. Amortization
expense  of  approximately $58,000 was included in  the  June  30
income  statement  and is included in general and  administrative
expenses   in   the  accompanying  consolidated   statements   of
operations.  The  following is a summary of  estimated  aggregate
amortization expense of intangible assets for each  of  the  five
succeeding fiscal years.

     ($ in thousands)
     ----------------

2006                731
2007                608
2008                305
2009                245
2010                245
Thereafter          436
                  -----
Total             2,570
                  =====


The following pro forma results of operations for
three months ended June 30, 2005 have been prepared as
if Stealth Microwave had been acquired April 1, 2005.  These
pro forma results include adjustments for interest expense
and amortization costs on the acquisition term loan used
to finance the transaction, amortization expense for the
identifiable assets recorded and the effect of income
taxes.  This pro forma information should not be construed
to be indicative of the results of operations that would
have been attained had the acquisition been made as of April
1, 2005, or of the results of operations that may occur
in the future.


(in thousands except per share data)

                                  Quarter ended June 30,
                                     2005         2004
                                    ------       ------

($ in thousands, except revenue per share)

Pro forma revenue                    5,258        4,908
Pro forma net income                   300          471
Pro forma earnings per share
     Basic (note)                      .07          .11
     Diluted (note)                    .07          .11


Note:  Earnings per share was impacted in quarter ended
June 30, 2005, by approximately $90,000 of Stealth legal
expenses that related to the acquisition.  Without these
adjustments and calculating for income tax effect, earnings
would have increased approximately $55,000 or $.01 per share,
basic and diluted resulting in earnings per share of $.08
instead of the $.07 shown.


Item  2.    Management's  Discussion  and  Analysis  or  Plan  of
            -----------------------------------------------------
            Operation.
            ---------

Critical Accounting Policies
----------------------------

The  discussion and analysis of the Company's financial condition
and  the  results  of its operations are based on  the  Company's
financial  statements  and the data used  to  prepare  them.  The
Company's  financial  statements  have  been  prepared  based  on
accounting principles generally accepted in the United States  of
America.  On an on-going basis, we re-evaluate our judgments  and
estimates  including  those related to inventory  valuation,  the
valuation  allowance  on  the Company's deferred  tax  asset  and
goodwill  impairment. These estimates and judgments are based  on
historical  experience  and various other  assumptions  that  are
believed  to be reasonable under current business conditions  and
circumstances.  Actual results may differ  from  these  estimates
under  different assumptions or conditions. The Company  believes
the   following   critical  accounting   policies   affect   more
significant  judgments and estimates in the  preparation  of  the
consolidated financial statements.
Accounts Receivable

We perform ongoing credit evaluations of our customers and adjust
credit  limits  based  upon payment history  and  the  customer's
current  credit  worthiness, as determined by a review  of  their
current credit information.
Allowance for Doubtful Accounting

We  regularly monitor collections and payments from our customers
and  maintain a provision for estimated credit losses based  upon
historical experience and any specific customer collection issues
that   have  been  identified.  While  such  credit  losses  have
historically  been  within our expectations  and  the  provisions
established,  we  cannot  guarantee  that  we  will  continue  to
experience  the same credit loss rates that have been experienced
in the past.
Inventories

Inventory  is  valued at the lower of cost (first in,  first  out
basis)  or  market.  Inventory items are reviewed  regularly  for
excess  and obsolete inventory based on an estimated forecast  of
product  demand.  Demand  for  the  Company's  products  can   be
forecasted based on current backlog, customer options to  reorder
under  existing contracts, the need to retrofit older  units  and
parts  needed  for  general repairs. Although the  Company  makes
every  effort to insure the accuracy of its forecasts  of  future
product  demand, any significant unanticipated changes in  demand
or  technological developments could have an impact on the  level
of obsolete material in its inventory and operating results could
be  affected, accordingly. However, world events have forced  our
country into various situations of conflict whereby equipment  is
used  and  parts  may be needed for repair. This  could  lead  to
increased  product  demand  as well as  the  use  of  some  older
inventory  items that the Company had previously  taken  reserves
on, or had determined to be obsolete.

Valuation of goodwill and intangible assets and their impairment
Effective  January  1,  2002, we adopted Statement  of  Financial
Accounting  Standard  ("SFAS")  No.  142,  "Goodwill  and   Other
Intangible  Assets"  and  SFAS  No.  144,  "Accounting  for   the
Impairment or Disposal of Long-Lived Assets." SFAS 142 eliminates
the  amortization  of  goodwill and  indefinite-lived  intangible
assets,  addresses  the  amortization of intangible  assets  with
finite lives and addresses impairment testing and recognition for
goodwill and intangible assets. SFAS No. 144 establishes a single
model for the impairment of long-lived assets.

The  Company  has goodwill related to an acquisition.  We  assess
goodwill  for  impairment  annually  unless  events  occur   that
requires  more  frequent  reviews. Long-lived  assets,  including
amortizable  intangibles,  are  tested  for  impairment  whenever
events  or  changes in circumstances indicate that  the  carrying
amount  of an asset may not be recoverable. Discounted cash  flow
analyses are used to assess non-amortizable intangible impairment
while  undiscounted cash flow analyses are used to  assess  long-
lived  asset  impairment. If an assessment indicates  impairment,
the impaired asset is written down to its fair market value based
on the best information available. Estimated fair market value is
generally  measured with discounted estimated future cash  flows.
Considerable  management  judgment  is  necessary   to   estimate
undiscounted  and discounted future cash flows. Assumptions  used
for these cash flows are consistent with internal forecasts.

On   an   on-going  basis,  management  reviews  the  value   and
depreciation of long-lived assets, including goodwill  and  other
intangible assets. During this period of amortization review,  we
re-evaluate  the significant assumptions used in determining  the
original cost of long-lived assets. Although the assumptions  may
vary  from  transaction  to transaction, they  generally  include
revenue   growth,  operating  results,  cash  flows   and   other
indicators of value. Management then determines whether there has
been  an impairment of the value of long-lived assets based  upon
events or circumstances that have occurred since acquisition. The
impairment   policy   is  consistently  applied   in   evaluating
impairment   for  each  of  our  wholly-owned  subsidiaries   and
investments.

Recent  accounting pronouncements - In May 2005, the FASB  issued
SFAS  No.  154,  Accounting Changes and Error Corrections,  which
replaces APB Opinion No. 20, Accounting Changes, and SFAS No.  3,
Reporting  Accounting  Changes in Interim  Financial  Statements.
Opinion No. 20 had required that changes in accounting principles
be recognized by including the cumulative effect of the change in
the  period  in which the new accounting principle  was  adopted.
SFAS No. 154 requires retrospective application of the change  to
prior  periods' financial statements, unless it is  impracticable
to  determine  the  period-specific effects of  the  change.  The
Statement is effective for fiscal years beginning after  December
15,  2005.  The  Company does not believe the  adoption  of  this
statement   will  have  a  material  impact  on   its   financial
statements.

In  November  2004,  the  FASB issued SFAS  No.  151,  "Inventory
Costs,"  an  amendment  of  ARB No.  43,  Chapter  4,  "Inventory
Pricing". This statement clarifies that abnormal amounts of  idle
facility  expense, freight, handling costs, and wasted  materials
(spoilage)  should  be recognized as current-period  charges  and
requires  the  allocation of fixed production  overheads  to  the
costs  of  conversion  be  based on the normal  capacity  of  the
production  facilities.  The  provisions  of  SFAS  No.  151  are
effective  for  inventory  costs  incurred  during  fiscal  years
beginning   after  June  15,  2005.   The  Company  is  currently
evaluating  the effects of this statement, which the  Company  is
required  to  adopt  effective April 1, 2006,  on  its  financial
position, results of operations and cash flow.

In  December  2004, the FASB issued SFAS No. 123R,   "Share-Based
Payment," a revision of SFAS No. 123, "Accounting for Stock-Based
Compensation" and superseding APB Opinion No. 25, "Accounting for
Stock Issued to Employees." SFAS No. 123R requires the Company to
expense  grants  made  under  stock  option  and  employee  stock
purchase  plans.   The cost will be recognized over  the  vesting
period  of  the plans. SFAS No. 123R is effective for  the  first
annual  period beginning after December 15, 2005. The Company  is
evaluating the alternatives under the standard, which the Company
is required to adopt in the first quarter of the Company's fiscal
year ending March 31, 2007.

Stock  based compensation - The Company measures employee  stock-
based compensation cost using Accounting Principles Board ("APB")
Opinion  No.  25  as  is  permitted  by  Statement  of  Financial
Accounting  Standards  No. 123 ("SFAS No. 123"),  Accounting  for
Stock-Based  Compensation.  Pro forma information  regarding  net
income (loss) and net loss per share is required by SFAS No. 123,
as  amended by SFAS No. 148, and has been determined  as  if  the
Company  had  accounted for its stock options granted  using  the
fair  value  method.    The  fair value  for  these  options  was
estimated  at  the  date of grant using the Black-Scholes  option
pricing model with the following weighted-average assumptions for
the  three  month periods ended June 30, 2005 and 2004: risk-free
interest  rates  of 3.63-4.17% respectively; no  dividend  yield;
volatility factors of the expected market price of the  Company's
common  stock  of  75%  and expected lives of  the  options  were
estimated  at  approximately 2 years.  The weighted average  fair
value  of stock options granted for the three month periods ended
June 30, 2005 and 2004 were $3.67 and  $3.29 respectively.

Forward-looking statements
--------------------------

Certain statements in this Report, contain words such as "could,"
"expects,"    "may,"   "anticipates,"   "believes,"    "intends,"
"estimates," "plans," "envisions," and other similar language and
are  considered forward-looking statements. These statements  are
based  on  our expectations, estimates, forecasts and projections
about  the operating environment, economies and markets in  which
we  operate. In addition, other written or oral statements  which
are considered forward-looking may be made by us or others on our
behalf.   These  statements  are  subject  to  important   risks,
uncertainties and assumptions, which are difficult to predict and
the  actual  outcome  may be materially different.  Some  of  the
factors  which  could  cause results or  events  to  differ  from
current expectations include, but are not limited to, the factors
described  below. Unless required by applicable securities  laws,
we  do not have any intention or obligation to publicly update or
revise  any forward- looking statements, whether as a  result  of
new information, future events or otherwise.

We  may  be  materially and adversely affected by  reductions  in
spending by certain of our customers.

The  significant slowdown in capital spending by certain  of  our
customers,   coupled  with  existing  economic  and  geopolitical
uncertainties  and the potential impact on customer  demand,  has
created  uncertainty as to market demand. As a  result,  revenues
and operating results for a particular period can be difficult to
predict.  In  addition,  there can be  no  certainty  as  to  the
severity  or  duration of the current industry adjustment.  As  a
result of changes in industry and market conditions, many of  our
customers have significantly reduced their capital spending.  Our
revenues and operating results have been and may continue  to  be
materially  and  adversely  affected  by  reductions  in  capital
spending by our customers.

Our  operating results have historically been subject  to  yearly
and  quarterly  fluctuations  and are  expected  to  continue  to
fluctuate.

Our operating results have historically been and are expected  to
continue to be subject to quarterly and yearly fluctuations as  a
result of a number of factors. These factors include:

-  our  ability to successfully implement programs  to  stimulate
sales  by  anticipating and offering the kinds  of  products  and
services  customers will require in the future  to  increase  the
efficiency and profitability of their products;

-  our  ability  to successfully complete programs  on  a  timely
basis,  to  reduce our cost structure, including fixed costs,  to
streamline our operations and to reduce product costs;

-  our  ability  to focus our business on what we believe  to  be
potentially  higher  growth,  higher  margin  businesses  and  to
dispose of or exit non-core businesses;

- increased price and product competition in our markets;

-  the  inherent uncertainties of using forecasts, estimates  and
assumptions  for asset valuations and in determining the  amounts
of  accrued  liabilities  and other  items  in  our  consolidated
financial statements;

-  our  ability  to  implement our work plan  without  negatively
impacting  our relationships with our customers, the delivery  of
products  based on new and developing technologies, the  delivery
of  high  quality products at competitive prices, the maintenance
of  technological leadership, the effectiveness of  our  internal
processes  and  organizations  and  the  retention  of  qualified
personnel;

- fluctuations in our gross margins;

-  the  development, introduction and market  acceptance  of  new
technologies;

-  variations  in sales channels, product costs and  the  mix  of
products sold;

- the size and timing of customer orders and shipments;

- our ability to maintain appropriate inventory levels;

- the impact of acquired businesses and technologies;

-  the  impact  of  our  product development  schedules,  product
quality variances, manufacturing capacity and lead times required
to produce our products;

- changes in legislation, regulation and/or accounting rules; the
impact  of higher insurance premiums and deductibles and  greater
limitations on insurance coverage; and

-  acts  of  terrorism  or the outbreak of hostilities  or  armed
conflict between countries.

Economic  conditions  in the United States, Europe  and  globally
affecting our markets, as well other trends and factors affecting
our  markets,  are beyond our control and may result  in  reduced
demand and pricing pressure on our products.
There  are  trends  and factors affecting our  markets  that  are
beyond our control and may affect our operations. Such trends and
factors include:

-  adverse  changes  in the public and private  equity  and  debt
markets  and our ability, as well as the ability of our customers
and suppliers, to obtain financing or to fund working capital and
capital expenditures;

-  adverse changes in our current credit condition or the  credit
quality of our customers and suppliers;

- adverse changes in the market conditions in our markets;

- the trend towards the sale of integrated products;

-  visibility  to,  and the actual size and  timing  of,  capital
expenditures by our customers;

-  inventory  practices,  including the  timing  of  product  and
service deployment, of our customers;

-  policies of our customers regarding utilization of  single  or
multiple vendors for the products they purchase;

-   the   overall   trend  toward  industry   consolidation   and
rationalization among our customers, competitors and suppliers;

-   conditions   in   the  broader  market   for   military   and
communications products;

- governmental regulation or intervention affecting our products;
and

-  the  effects of war and acts of terrorism, such as disruptions
in  general  global economic activity, changes in  logistics  and
security  arrangements  and  reduced  customer  demand  for   our
products and services.

Economic  conditions affecting the industry, which affect  market
conditions  in  the  military  and  communication  infrastructure
industry  in the United States, Europe and globally,  affect  our
business.  Reduced  capital  spending  and/or  negative  economic
conditions in these and/or other areas of the world have resulted
in,  and  could  continue to result in,  reduced  demand  for  or
increased pricing pressures on our products.

Our gross margins may be negatively affected, which in turn would
negatively  affect our operating results and could contribute  to
volatility in the market price of our Common Stock.
Our  gross  margins may be negatively affected as a result  of  a
number of factors, including:

- increased price competition;

- excess capacity or excess fixed assets;

- customer and contract settlements;

- higher product, material or labor costs;

-   increased  inventory  provisions  or  contract  and  customer
settlement costs;

- warranty costs;

- obsolescence charges;

-  loss of cost savings on future inventory purchases as a result
of high inventory levels;

-  introductions  of  new  products and  costs  of  entering  new
markets;

- increased levels of customer services;

- Changes in distribution channels; and

- Changes in product and geographic mix.

Lower  than  expected gross margins would negatively  affect  our
operating  results  and could contribute  to  volatility  in  the
market price of our Common Stock.

We may not be able to attract or retain the specialized technical
and  managerial  personnel  necessary  to  achieve  our  business
objectives.

Competition  for certain key positions and specialized  technical
personnel in the high-technology industry remain strong,  despite
current  economic conditions. We believe that our future  success
depends in part on our continued ability to hire, assimilate, and
retain  qualified personnel in a timely manner,  particularly  in
key senior management positions and in our key areas of potential
growth. An important factor in attracting and retaining qualified
employees   is  our  ability  to  provide  employees   with   the
opportunity  to  participate  in  the  potential  growth  of  our
business through programs such as stock option plans. We may also
find  it  more difficult to attract or retain qualified employees
because  of our size. In addition, if we have not properly  sized
our  workforce and retained those employees with the  appropriate
skills,  our  ability  to compete effectively  may  be  adversely
affected.  If  we are not successful in attracting, retaining  or
recruiting  qualified  employees,  including  members  of  senior
management,  in  the  future,  we  may  not  have  the  necessary
personnel   to   effectively  compete  in  the  highly   dynamic,
specialized  and  volatile industry in which  we  operate  or  to
achieve our business objectives.

Future cash flow fluctuations may affect our ability to fund  our
working  capital requirements or achieve our business  objectives
in a timely manner.

Our working capital requirements and cash flows historically have
been,  and  are expected to continue to be, subject to  quarterly
and  yearly fluctuations, depending on such factors as timing and
size  of  capital  expenditures,  levels  of  sales,  timing   of
deliveries  and  collection  of  receivables,  inventory  levels,
customer  payment  terms and supplier terms  and  conditions.  We
believe  our cash on hand will be sufficient to fund our  current
business  model,  manage our investments and  meet  our  customer
commitments for at least the next 12 months. However,  a  greater
than expected slow down in capital spending by our customers  may
require us to adjust our current business model. As a result, our
revenues  and cash flows may be materially lower than  we  expect
and  we  may  be required to reduce our capital expenditures  and
investments  or  take other measures in order to  meet  our  cash
requirements.  We  may  seek  additional  funds  from  liquidity-
generating   transactions  and  other  conventional  sources   of
external  financing  (which  may  include  a  variety  of   debt,
convertible debt and/or equity financings). We cannot provide any
assurance  that our net cash requirements will be as we currently
expect.  Our inability to manage cash flow fluctuations resulting
from  the  above factors could have a material adverse effect  on
our  ability  to  fund  our  working  capital  requirements  from
operating cash flows and other sources of liquidity or to achieve
our business objectives in a timely manner.

Our  business  may  be  materially  and  adversely  affected   by
increased levels of debt.

In  order to finance our business we may incur significant levels
of  debt compared to historical levels, and we may need to secure
additional  sources  of  funding,  which  may  include  debt   or
convertible debt financing, in the future. A high level of  debt,
arduous or restrictive terms and conditions relating to accessing
certain sources of funding, failure to meet the financial  and/or
other  covenants in our credit and/or support facilities and  any
significant  reduction  in, or access to, such  facilities,  poor
business  performance or lower than expected cash  inflows  could
have adverse consequences on our ability to fund our business and
the operation of our business.

Other effects of a high level of debt include the following:

-  we  may  have  difficulty borrowing money  in  the  future  or
accessing sources of funding;

-  we  may  need  to use a large portion of our  cash  flow  from
operations  to  pay  principal and interest on our  indebtedness,
which  would  reduce the amount of cash available to finance  our
operations and other business activities;

- A high debt level, arduous or restrictive terms and conditions,
or  lower  than expected cash flows would make us more vulnerable
to  economic downturns and adverse developments in our  business;
and

-  if  operating  cash  flows  are not  sufficient  to  meet  our
operating   expenses,  capital  expenditures  and  debt   service
requirements as they become due, we may be required, in order  to
meet  our  debt  service obligations, to delay or reduce  capital
expenditures  or  the introduction of new products,  sell  assets
and/or  forego  business  opportunities  including  acquisitions,
research and development projects or product design enhancements.
We have made, and may continue to make, strategic acquisitions in
order  to  enhance  our  business. If we are  not  successful  in
operating   or  integrating  these  acquisitions,  our  business,
results  of  operations and financial condition may be materially
and adversely affected.

In  the  past, we acquired companies to enhance the expansion  of
our   business   and   products.  We   may   consider   selective
opportunistic  acquisitions  of  companies  or  businesses   with
resources  and product or service offerings capable of  providing
us  with additional strengths to help fulfill our vision  of  our
marketplace.   Acquisitions   involve   significant   risks   and
uncertainties.

These risks and uncertainties include:

- the risk that the industry may develop in a different direction
than  anticipated  and that the technologies we  acquire  do  not
prove to be those we need to be successful in the industry;

-  the  risk  that future valuations of acquired  businesses  may
decrease from the market price we paid for these acquisitions;

-  the generation of insufficient revenues by acquired businesses
to  offset  increased  operating expenses associated  with  these
acquisitions;

-  the  potential difficulties in completing in-process  research
and development projects and delivering high quality products  to
our customers;

-   the  potential  difficulties  in  integrating  new  products,
businesses and operations in an efficient and effective manner;

-  the  risk  that  our customers or customers  of  the  acquired
businesses  may  defer purchase decisions as  they  evaluate  the
impact of the acquisitions on our future product strategy;

- the potential loss of key employees of the acquired businesses;

-  the risk that acquired businesses will divert the attention of
our senior management from the operation of our business; and

-  the  risks  of entering new markets in which we  have  limited
experience  and  where  competitors may have  a  stronger  market
presence.

Our  inability  to  successfully  operate  and  integrate  newly-
acquired  businesses appropriately, effectively and in  a  timely
manner  could  have a material adverse effect on our  ability  to
take  advantage of further growth in demand for products  in  our
marketplace,  as  well  as  on our revenues,  gross  margins  and
expenses.

We   operate   in   highly   dynamic  and   volatile   industries
characterized   by   changing  technologies,  evolving   industry
standards,  frequent  new  product introductions  and  relatively
short product life cycles.

The  markets  for  our  products  are  characterized  by  rapidly
changing technologies, evolving industry standards, frequent  new
product  introductions and short product life cycles.  We  expect
our  success  to depend, in substantial part, on the  timely  and
successful  introduction  of  high  quality,  new  products   and
upgrades,  as  well  as cost reductions on  current  products  to
address  the  operational speed, bandwidth, efficiency  and  cost
requirements  of our customers. Our success will also  depend  on
our  ability  to  comply  with emerging  industry  standards,  to
operate  with  products of other suppliers, to  address  emerging
market  trends,  to  provide  our  customers  with  new  revenue-
generating  opportunities and to compete with  technological  and
product  developments carried out by others. The  development  of
new,   technologically  advanced  products,  is  a  complex   and
uncertain process requiring high levels of innovation, as well as
the  accurate  anticipation of technological and  market  trends.
Investments in such development may result in expenses growing at
a  faster  rate  than revenues, particularly  since  the  initial
investment to bring a product to market may be high. We  may  not
be   successful   in  targeting  new  market  opportunities,   in
developing and commercializing new products in a timely manner or
in achieving market acceptance for our new products.

The  success of new or enhanced products, depends on a number  of
other   factors,  including  the  timely  introduction  of   such
products,  market  acceptance of new  technologies  and  industry
standards,  the  quality  and  robustness  of  new  or   enhanced
products,  competing product offerings, the pricing and marketing
of  such  products  and  the availability  of  funding  for  such
networks.  Products and technologies developed by our competitors
may  render  our products obsolete. If we fail to  respond  in  a
timely  and effective manner to unanticipated changes in  one  or
more of the technologies affecting telecommunications or our  new
products   or   product  enhancements  fail  to  achieve   market
acceptance,  our ability to compete effectively in our  industry,
and  our sales, market share and customer relationships could  be
materially and adversely affected.

We  face  significant competition and may not be able to increase
or  maintain  our  market share and may suffer  from  competitive
pricing practices.

We  operate  in  an  industry that is characterized  by  industry
rationalization  and  consolidation,  vigorous  competition   for
market share and rapid technological development. Competition  is
heightened  in  periods  of  slow overall  market  growth.  These
factors  could result in aggressive pricing practices and growing
competition  from  niche companies, established  competitors,  as
well as well-capitalized companies, which, in turn, could have  a
material adverse effect on our gross margins.

We  expect that we will face additional competition from existing
competitors and from a number of companies that have  entered  or
may  enter  our existing and future markets. Some of our  current
and  potential competitors have greater marketing, technical  and
financial  resources, including access to capital markets  and/or
the  ability to provide customer financing in connection with the
sale  of  products. Many of our current and potential competitors
have   also   established,  or  may  in  the  future   establish,
relationships  with  our current and potential  customers.  Other
competitive   factors  include  the  ability   to   provide   new
technologies and products, end-to-end solutions, and new  product
features, as well as conformance to industry standards. Increased
competition   could   result  in  price  reductions,   negatively
affecting  our  operating results, reducing  profit  margins  and
potentially leading to a loss of market share.

Declines  in the market price of our Common Stock may  negatively
impact  our ability to make future strategic acquisitions,  raise
capital, issue debt or retain employees.

The  stock  markets  have experienced extreme price  fluctuations
that  have affected the market price and trading volumes of  many
technology  and telecommunications companies in particular,  with
potential  consequential  negative  effects  on  the  trading  of
securities  of  such companies. A major decline  in  the  capital
markets  generally,  or  an adjustment in  the  market  price  or
trading  volumes  of our Common Stock may negatively  impact  our
ability  to raise capital, issue debt, retain employees  or  make
future  strategic acquisitions. These factors, as well as general
economic and political conditions, and continued negative  events
within the technology sector, may in turn have a material adverse
effect on the market price of our Common Stock.


Results of Operations
---------------------

The  Consolidated Statement of Income for the period  ended  June
30, 2005 includes Stealth income from the date of acquisition.

Operating  Revenue  for  Q1 FY06 was $3,941,132  as  compared  to
$3,379,331 for Q1 FY05, an increase of $561,801, or 16.6%.  Sixty-
seven  percent  of  the  revenue  increase  was  attributable  to
Stealth's  revenue of $373,973. Commercial and  Defense  revenues
were  51%  and  49%,  respectively, as a  percent  of  the  total
revenues for the current period. This compared to Commercial  and
Defense  percentages  of 66% and 34% respectively  for  the  same
period last year.

Gross  profit margin was 40.4% for Q1 FY06 as compared  to  45.6%
for  the  same  period  last  year.  Most  of  the  decrease  was
attributed  to low margins on the commercial DBS programs.  Gross
profit margin for Stealth was 52%.

Research  and Development ("R&D") expenses decreased to  2.8%  of
revenues  compared  to  6.9%  in Q1  FY05.  Total  R&D  decreased
$123,527 or 52.8% as compared to Q1 FY05. The overall decrease in
dollars was evenly spread between commercial digital broadcasting
systems  and  defense  radar  programs  that  had  migrated  from
engineering development efforts to production.

Selling,  general  and  administrative  ("SG&A")  expenses  as  a
percent of revenues increased slightly to 24% from 23.3% the same
period  last year. Expenses increased $158,428 or 20.1% from  the
same  period  of  the previous year. Stealth SG&A  accounted  for
$117,248  or 74% of the increase. Approximately half of Stealth's
SG&A  was due to amortization expense relating to the fair market
valuation on Stealth's assets.

Net income for Q1 FY06 was $319,699 or $0.07 per share, basic and
diluted,  as compared to $349,947 or $0.08 per share,  basic  and
diluted,  in Q1 FY05.  This is a decrease of $30,248 or 8.64%  as
compared to the same period last year. Most of this decrease  was
due  to  the  amortization expense on the intangible assets  from
Stealth. Stealth contributed approximately $.01 per share,  basic
and diluted.

Liquidity and Capital Resources
-------------------------------

The Company's working capital at June 30, 2005 was $9,596,718  as
compared to $8,189,504 at March 31, 2005.  The Company's  current
ratio was approximately 3.9 to 1 at June 30, 2005 as compared  to
5.3 to 1 at March 31, 2005.

Net  cash of $337,097 was provided by operating activities during
the three months ended June 30, 2005 as compared to $268,351 that
was  provided  by  operating activities during the  year  earlier
period.   Increases in inventory and receivables were  offset  by
reductions  in  prepaid and accrued expenses. Net  cash  used  in
investing activities during the three months ended June 30,  2005
was  $6,232,616 as compared to $216,196 used in the year  earlier
period.   The  increase was primarily due to the  acquisition  of
Stealth.   Net cash provided by financing activities  during  the
three  months ended June 30, 2005 was $5,911,117 as  compared  to
cash  provided of $326,687 during the year earlier period.   This
was  largely  due  to  proceeds  from  the  acquisition  loan  of
$6,000,000  during  the current period.  As  a  result  of  these
activities, the Company's cash position increased $15,597  during
the  current three months as compared to an increase of  $378,842
in the year ago period.

In  accordance  with  loans from TD Bank North,  the  Company  is
required  to maintain a minimum net worth of at least $5,000,000,
a  ratio  of total debt to net worth not exceeding 1.5:1,  and  a
debt  coverage  ratio of not less than 1.25:1.  At  present,  the
Company  does not anticipate failing to comply with any of  these
financial  ratios.  As  of August 13, 2005,  there  was  $250,000
outstanding against this line of credit.

We  believe  that cash and cash equivalents on hand,  anticipated
future cash receipts, and borrowings available under our line  of
credit  will be sufficient to meet our obligations as they become
due for the next twelve months.  However, a decrease in our sales
or  demand  for  our products would likely adversely  affect  our
working  capital amounts.  As part of our business  strategy,  we
occasionally  evaluate  potential  acquisitions  of   businesses,
products  and  technologies.   Accordingly,  a  portion  of   our
available  cash  may be used at any time for the  acquisition  of
complementary     products   or   businesses.   These   potential
transactions may require substantial capital resources, which, in
turn, may require us to seek additional debt or equity financing.
There are no assurances that we will be able to consummate any of
these    transactions.    There are no  present  plans  to  raise
additional debt or equity capital, nor is there a projected  need
to raise any such capital.

Off-balance Sheet Arrangements
------------------------------

The Company does not have any off-balance sheet arrangements that
have  or are reasonably likely to have a current or future effect
on  its  financial  conditions, changes in  financial  condition,
revenues  or  expenses results of operation,  liquidity,  capital
expenditure or capital resources that is material to investors.


Safe Harbor Statement
---------------------

Statements  which are not historical facts, including  statements
about   the   Company's  confidence  and   strategies   and   its
expectations  about new and existing products,  technologies  and
opportunities,  market and industry segment  growth,  demand  and
acceptance  of  new  and existing products  are  forward  looking
statements that involve risks and uncertainties.  These  include,
but  are  not  limited to, product demand and  market  acceptance
risks;  the  impact  of  competitive products  and  pricing;  the
results  of  financing  efforts;  the  loss  of  any  significant
customers of any business; the effect of the Company's accounting
policies;  the  effects of economic conditions and trade,  legal,
social, and economic risks, such as import, licensing, and  trade
restrictions; the results of the Company's business plan and  the
impact on the Company of its relationship with its lender.   This
report  should  be read in conjunction with the Company's  Annual
Report on Form 10-KSB for its fiscal year ended March 31, 2005.


Item 3.   Controls and Procedures.
------    -----------------------

Evaluation of disclosure controls and procedures - As of June 30,
2005,   the   Company  carried  out  an  evaluation,  under   the
supervision  and  with  the Company's management,  including  the
Company's  Chief  Executive Officer and the  Company's  Principal
Financial  Officer,  of  the  effectiveness  of  the  design  and
operation of the Company's disclosure controls and procedures (as
defined  in  Rules  13a-15(e)  and 15d-15(e)  of  the  Securities
Exchange  Act  of  1934). Based upon that evaluation,  the  Chief
Executive  Officer  and  Principal Financial  Officer  concluded,
except as noted below, that the Company's disclosure controls and
procedures  are  effective in timely alerting  them  to  material
information  relating to the Company (including its  consolidated
subsidiaries)  required to be included in the Company's  periodic
filings  with the Securities and Exchange Commission. We  believe
that the deficiencies set forth below did not affect the accuracy
of our financial statements in this report.

The  Company's independent registered accounting firm has advised
management  and the audit committee that the following identified
internal control deficiencies constitute a significant deficiency
in the Company's internal control.

A  lack of persuasive evidence of management oversight and review
as  compensatory  control  to address inadequate  segregation  of
incompatible  duties in certain areas of revenue and  expenditure
transaction cycles.

Management  is aware that there is a perceived lack of persuasive
evidence  of  management  oversight and  review  in  some  areas.
Measures  are being taken to include documentation of  management
oversight  and  review  as  part of  the  appropriate  functional
procedures.

Other  than as discussed above, such evaluation did not  identify
any  change  in  the Company's internal controls  over  financial
reporting  that occurred during the quarter ended June  30,  2005
that  has  materially  affected,  or  is  reasonably  likely   to
materially affect, the Company's internal control over  financial
reporting.


                   PART II.  OTHER INFORMATION
                   -------   -----------------


     Item 1.   Legal Proceedings.

           The Company is not a party to any material pending
     legal proceedings.



     Item  2.    Unregistered Sales of Equity Securities  and
                 Use of Proceeds.


     Recent Sales of Unregistered Securities
     ---------------------------------------

          On  October  16, 2002, the Company entered  into  a
     Financial Advisory and Investment Banking Agreement (the
     "Agreement") with an entity. Pursuant to the  Agreement,
     the  Company  granted a three year warrant  to  purchase
     50,000 shares of its Common Stock to this entity (or its
     designees)   exercisable  at  $3.00   per   share   (the
     "Warrant").  The  Agreement  subsequently   became   the
     subject of a dispute.  In settlement of this dispute, in
     June  2004,  the Company allowed the entity to  exercise
     the  warrant  as  to  20,000 shares  and  cancelled  the
     balance of the warrant. No underwriters were involved in
     the  transaction. The securities were not  sold  to  the
     entity  for  cash. The securities were  issued  to  this
     entity  as  part  of the consideration for  this  entity
     entering  into the Agreement and providing the  services
     there  under.   The  issuance of  the  Warrant  and  the
     issuance  of  shares upon exercise of the  Warrant  were
     pursuant  to the exemption from registration  provisions
     contained in Section 4(2) of the Securities Act of 1933.
     The Company did not engage in any public advertising  or
     general    solicitation   in   connection   with    this
     transaction.   The  Company provided  this  entity  with
     disclosure  of  all  aspects of the Company's  business,
     including providing this entity and its management  with
     the  Company's  reports filed with  the  Securities  and
     Exchange   Commission,  the  Company's  press  releases,
     access  to  the Company's auditors, and other financial,
     business,  and  corporate  information.  Based  on   our
     investigation,  we believe that the management  and  the
     board   of   directors  of  this  entity  obtained   all
     information   regarding  the  Company  they   requested,
     received  answers  to  all  questions  they  posed,  and
     otherwise   understood  the  risks  of   accepting   our
     securities as partial consideration for their services.

     Small Business Issuer Purchases of Equity Securities

     None.


     Item 3.   Defaults upon Senior Securities

     None.


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

     None.


     Item 5.   Other Information

     None.


Item 6.   Exhibits
------    --------

          (a)  Exhibits.


     10.1      Employment Agreement between Stealth Microwave
               and Stephen Barthelmes, Jr. dated June 10, 2005.

     10.2      Employment Agreement between Stealth Microwave
               and Brian Eggleston dated June 10, 2005.

     10.3      Change in Terms Agreement dated August 15, 2005
               between Micronetics, as borrower and TD Banknorth,
	       N.A., as Lender.

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

     31.2      Certification pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002.

     32.1      Certification  pursuant  to  18  U.S.C.
               Section  1350, as adopted pursuant to Section  906
               of the Sarbanes-Oxley Act of 2002.

     32.2      Certification  pursuant  to  18  U.S.C.
               Section  1350, as adopted pursuant to Section  906
               of the Sarbanes-Oxley Act of 2002.



                           SIGNATURE
                           ---------


      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.



                                   MICRONETICS, INC.
                                   (Registrant)



Dated:  August 15, 2005            By:/s/David Robbins
                                      --------------------------
                                      David Robbins,
                                      President (Principal
                                      Executive Officer)