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

                                    FORM 10-Q/A

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

                 For the quarterly period ended October 31, 2004

                                       or

[    ]  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 0-21695

                          Manchester Technologies, Inc.
             (Exact name of registrant as specified in its charter)

         New York                                              11-2312854
(State or other jurisdiction of                             (I.R.S. Employer
Incorporation or organization)                            Identification Number)

                                 160 Oser Avenue
                            Hauppauge, New York 11788
              (Address of registrant's principal executive offices)

                                 (631) 951-8100
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.

                                 [X] Yes [ ] No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                 [ ] Yes [X] No


As of December 2, 2004 there were 8,296,334 outstanding shares of the
registrant's Common Stock.
<PAGE>


                                Explanatory Note

     Manchester Technologies,  Inc. (the "Company") is filing this Amendment No.
1 to its Form 10-Q for the quarter ended October 31, 2004 to amend the Quarterly
Report on Form 10-Q for the quarter ended October 31, 2004  previously  filed by
the Company (the "Original October 31, 2004 Form 10-Q"), in order to reflect the
Company's  decision to exclude  separate  disclosure of cash flows pertaining to
discontinued  operations  in the three months  ended  October 31, 2004 cash flow
statement, presented in our Condensed Consolidated Statements of Cash Flows. The
reclassification  of the three months ended October 31, 2004 cash flow statement
will have no impact on the  statements of operations or the balance sheet of the
Company in any period presented.

     Because of the changes to our  Condensed  Consolidated  Statements  of Cash
Flows, we are amending the Original October 31, 2004 Form 10-Q to:

o   Revise Part I Item 1, Financial Statements.  The revisions appear in:
     -    The Company's Condensed Consolidated  Statements of Cash Flows for the
          three months ended October 31, 2004.
     -    Note 2 to  Condensed  Consolidated  Financial  Statements  in the last
          paragraph of "Discontinued Operations."

o Revise Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations. We have revised the first paragraph in "Cash Flows" under
the heading "Liquidity and Capital Resources."

     As  part  of  this  Amendment  No.  1,  the  Company  is  also  filing  new
certifications  from our Chief  Executive  Officer and Chief  Financial  Officer
(Exhibits 31.1, 31.2, and 32.1).

     No attempt  has been made in this Form 10-Q/A to update  other  disclosures
presented in the original Form 10-Q, except as described above. This Form 10-Q/A
does not reflect events  occurring after the filing of the original Form 10-Q or
modify or update those disclosures, except as described above. Accordingly, this
Form  10-Q/A  should  be read in  conjunction  with our  filings  made  with the
Securities and Exchange Commission subsequent to the filing of the original Form
10-Q, including any amendments to those filings.

                                       2


<page>

                 MANCHESTER TECHNOLOGIES, INC. AND SUBSIDIARIES



                                Table of Contents

PART I.            FINANCIAL INFORMATION                                   Page
-------            ---------------------                                   ----


Item 1.            Condensed Consolidated Balance Sheets as of
                          October 31, 2004 (unaudited) and July 31, 2004     4

                   Condensed Consolidated Statements of Income for the
                          Three Months Ended October 31, 2004 and
                          2003 (unaudited)                                   5

                   Condensed Consolidated Statements of Cash Flows for the
                          Three Months Ended October 31, 2004 and
                          2003 (unaudited)                                   6


                   Notes to Unaudited Condensed Consolidated
                          Financial Statements                               7

Item 2.            Management's Discussion and Analysis of Financial
                          Condition and Results of Operations               11

Item 3.            Quantitative and Qualitative Disclosures About
                          Market Risk                                       20

Item 4.            Controls and Procedures                                  20


PART II.           OTHER INFORMATION


Item 6.            Exhibits and Reports                                     21

                                       3

<PAGE>


                         PART I - FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS

                 Manchester Technologies, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                                              October 31, 2004     July 31, 2004
                                                                                 (Unaudited)       -------------
                                Assets                                           -----------

<S>                                                                              <C>                   <C>

Current assets:
     Cash and cash equivalents                                                   $20,933               $16,881
     Accounts receivable, net of allowance for doubtful accounts
        of $1,772 and $2,848, respectively                                        22,207                15,530
     Inventory                                                                    12,922                20,301
     Deferred income taxes                                                         1,212                 1,212
     Prepaid taxes                                                                   630                   916
     Prepaid expenses and other current assets                                     1,196                 1,266
                                                                                   -----                 -----
                      Total current assets                                        59,100                56,106

Property and equipment, net                                                        9,699                 9,890
Goodwill, net                                                                      3,735                 3,735
Deferred income taxes                                                              1,728                 1,728
Other assets                                                                          97                   183
                                                                                 -------               -------

                      Total assets                                               $74,359               $71,642
                                                                                  ======                ======


                          Liabilities and Shareholders' Equity

Current liabilities:
     Accounts payable and accrued expenses                                       $21,439               $21,492
     Current portion of capital lease obligations                                    255                   246
                                                                                --------              --------

                      Total  current liabilities                                  21,694                21,738


Deferred compensation payable                                                         98                    98
Capital lease obligations, net of current portion                                  7,615                 7,683
                                                                                   -----                 -----

                                Total liabilities                                 29,407                29,519
                                                                                  ------                ------

Commitments and contingencies

Shareholders' equity:
     Preferred stock, $.01 par value; 5,000 shares
        authorized, none issued                                                        -                     -
     Common stock, $.01 par value; 25,000 shares
        authorized, 8,290 and 8,163 shares issued
        and outstanding                                                               83                    82
     Additional paid-in capital                                                   20,077                19,597
     Retained earnings                                                            24,792                22,444
                                                                                  ------                ------

                      Total shareholders' equity                                  44,952                42,123
                                                                                  ------                ------

                      Total liabilities and shareholders' equity                 $74,359               $71,642
                                                                                  ======                ======
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       4

<PAGE>
                 Manchester Technologies, Inc. and Subsidiaries
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                         Three months ended
                                                                     October 31,        October 31,
                                                                         2004              2003
                                                                         ----              ----
<S>                                                                    <C>                 <C>
Revenue                                                                $46,881             $45,378

Cost of revenue                                                         40,849              40,644
                                                                        ------              ------

     Gross profit                                                        6,032               4,734

Selling, general and administrative expenses                             3,129               3,340
                                                                         -----            --------

     Income from operations                                              2,903               1,394

Interest and other income (expense), net                                    15                 (20)
                                                                         -----           ----------

     Income from continuing operations
       before income taxes                                               2,918               1,374

Income tax provision                                                     1,167                 530
                                                                         -----             -------

     Income from continuing operations                                   1,751                 844
                                                                         -----                 ---

Discontinued operations
Income (loss) from operations of discontinued component                    995                (855)
Income tax (provision) benefit                                            (398)                322
                                                                          -----                ---

Income (loss) from discontinued operations                                 597                (533)
                                                                           ---                ----

Net income                                                              $2,348                $311
                                                                         =====                 ===

Income per share from continuing operations
    Basic                                                               $0.21               $0.11
                                                                        =====               =====
    Diluted                                                             $0.21               $0.10
                                                                        =====               =====


Loss per share from discontinued operations
     Basic                                                              $0.07              $(0.07)
                                                                         ====              ======
     Diluted                                                            $0.07              $(0.07)
                                                                         ====              ======

Net income per share
     Basic                                                              $0.29               $0.04
                                                                        =====               =====
     Diluted                                                            $0.28               $0.04
                                                                        =====               =====

Weighted average shares outstanding
     Basic                                                               8,226               7,990
                                                                         =====               =====
     Diluted                                                             8,434               8,251
                                                                         =====               =====
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       5

<PAGE>


                 Manchester Technologies, Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                            Three months ended
                                                                        October 31,    October 31,
                                                                         2004             2003
                                                                         ----             ----

<S>                                                                   <C>                 <C>

Cash flows from operating activities:
   Net income                                                         $   2,348           $   311

   Adjustments to reconcile net income to net cash from
    operating activities:
      Depreciation and amortization                                         263               609
      Provision for doubtful accounts                                        51               283
      Equity based compensation expense                                      15                 -
      Tax benefits from exercise of stock options                            29                 -
      Change in assets and liabilities:
        Accounts receivable                                               6,728             1,163
        Inventory                                                         7,379               689
        Prepaid  taxes                                                      286               300
        Prepaid expenses and other current assets                            70               280
        Other assets                                                         86                51
        Accounts payable and accrued expenses                               (53)           (1,142)
        Deferred service contract revenue                                     -               136
                                                                       --------           -------
             Net cash provided by operating activities                    3,746             2,680
                                                                          -----            ------

Cash flows from investing activities:
      Capital expenditures                                                  (72)             (515)
                                                                            ----           -------
           Net cash used in investing activities                            (72)             (515)
                                                                            ----           -------

Cash flows from financing activities:
      Payments on capital lease obligations                                 (59)              (51)
      Proceeds from exercise of stock options                               437                 -
                                                                            ---            ------

           Net cash provided by (used in) financing activities              378               (51)
                                                                            ---            -------
Net increase in cash and cash equivalents                                 4,052             2,114
Cash and cash equivalents at beginning of period                         16,881             8,553
                                                                         ------            ------
Cash and cash equivalents at end of period                              $20,933           $10,667
                                                                         ======           =======
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       6

<PAGE>
                 Manchester Technologies, Inc. and Subsidiaries
         Notes to Unaudited Condensed Consolidated Financial Statements
                 (in thousands, except share and per share data)
                                   (Unaudited)

 1.    Business and Basis of Presentation

     Manchester  Technologies,  Inc. and its  subsidiaries  ("the Company") is a
distributor  of display  technology  solutions and plasma  display  monitors and
computer  hardware  primarily  to dealers and system  integrators.  As discussed
further in Note 2, on May 28, 2004,  the Company  sold its end-user  information
technology  fulfillment and professional  services business (the "IT Business").
Prior to such sale, Manchester specialized in hardware and software procurement,
display  technology,   custom  networking,   security,   IP  telephony,   remote
management,  application  development/e-commerce,  storage,  and  enterprise and
Internet solutions, offering its customers single-source solutions customized to
their  information  systems  needs  by  integrating  its  analysis,  design  and
implementation  services  with  hardware,  software,   networking  products  and
peripherals from leading vendors. Subsequent to such sale, the Company continued
distributing  display  technology  solutions  and plasma  display  monitors  and
computer hardware and no longer provides any professional  services. The Company
operates in a single segment.

     The  Company  has  entered  into  agreements  with  certain  suppliers  and
manufacturers   that  may  provide  the  Company  favorable  pricing  and  price
protection in the event the vendor reduces its prices.

     The accompanying  financial  information should be read in conjunction with
the financial  statements,  including the notes  thereto,  for the annual period
ended July 31, 2004.  The financial  information  included  herein is unaudited;
however, such information reflects all adjustments  (consisting solely of normal
recurring  adjustments) that are, in the opinion of management,  necessary for a
fair statement of results for the interim periods. In the opinion of management,
the accompanying unaudited condensed consolidated financial statements have been
prepared  in  accordance  with U.S.  generally  accepted  accounting  principles
("GAAP") for interim  financial  information  and with the  instructions to Rule
10-01 of Regulation  S-X. The results of  operations  for the three month period
ended  October  31,  2004 are not  necessarily  indicative  of the results to be
expected for future interim periods or the entire year.

     Management  of the Company has made a number of estimates  and  assumptions
relating  to the  reporting  of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported  amounts of revenues and expenses  during the  reporting  period to
prepare these  financial  statements in conformity  with  accounting  principles
generally accepted in the United States of America.  Actual results could differ
from those estimates.

2.      Discontinued Operations

     On May 28, 2004, the Company sold its IT Business to ePlus, inc., a leading
provider  of  Enterprise  Cost  Management,  in an  all  cash  transaction.  The
transaction  included the sale to ePlus of the customer list of the business and
certain  related  equipment,  the  assumption by ePlus of certain  contracts and
liabilities  pertaining to the business, and the hiring by ePlus of the majority
of  Manchester  employees  involved in the  business.  The  transaction  did not
include, and Manchester  retained,  the inventory and accounts receivable of the
IT Business.

     In the  fourth  quarter  of fiscal  2004,  the  Company  accrued  $1,016 of
employee  severance and other employee costs associated with the discontinued IT
Business.  As of October 31, 2004  approximately  $150 of the employee severance
and other employee costs and $328 of amounts payable to ePlus,  inc. for assumed
service  contracts were included in accounts  payable and accrued expenses which
will be paid in fiscal 2005, ending July 31, 2005.

                                       7

<PAGE>

         In accordance with SFAS 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", the results of operations from the end-user information
technology fulfillment and professional services business have been recorded as
discontinued operations in the accompanying consolidated statements of income.
The revenue from discontinued operations was $0 and $29,322 for the three months
ended October 31, 2004 and 2003, respectively. The pre-tax income (loss) from
operations of the discontinued component was $995 and $(855), for the three
months ended October 31, 2004 and 2003, respectively. The 2004 pre-tax income
resulted from recoveries of previously written off accounts receivable related
to the discontinued IT Business.


         The presentation of the statement of operations for the three months
ended October 31, 2003 has been reclassified to reflect discontinued operations.


3.        Net Income Per Share

         Basic net income per share has been computed by dividing net income by
the weighted average number of common shares outstanding. Diluted net income per
share has been computed by dividing net income by the weighted average number of
common shares outstanding, plus the assumed exercise of dilutive stock options,
less the number of treasury shares assumed to be purchased from the proceeds of
such exercises using the average market price of the Company's common stock
during each respective period. Stock options representing approximately 50,000
and 542,500 shares for the three months ended October 31, 2004 and 2003,
respectively, have been excluded from the calculation of diluted net income per
share as they are antidilutive. The following table reconciles the denominators
of the basic and diluted per share computations. For each period, the numerator
is the net income from continuing operations and the per share amounts below
represent income per share from continuing operations.
<TABLE>
<CAPTION>

                                                        Three months ended
                                              October 31, 2004         October 31, 2003
                                              ----------------         ----------------
                                                      Per share                  Per share
                                         Shares       amount        Shares        amount
<S>                                      <C>            <C>         <C>             <C>
      Basic                              8,226,000      $0.29       7,990,000       $0.11
                                                         ====                        ====
      Effect of dilutive options           208,000                    261,000
                                           -------                 ----------

      Diluted                            8,434,000      $0.28       8,251,000       $0.10
                                         =========       ====       =========       =====
</TABLE>

4.       Accounting for Stock-Based Compensation

     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"), and related interpretations for stock
options  and other  stock-based  awards and  records  compensation  expense  for
employee  stock  options  if the market  price of the  underlying  common  stock
exceeds  the  exercise  price on the date of the grant.  On August 1, 1996,  the
Company adopted SFAS No. 123,  "Accounting for Stock-Based  Compensation" ("SFAS
123").  The Company has elected not to implement the fair value based accounting
method for employee stock options, but has elected to disclose the pro forma net
income (loss) and net income  (loss) per share for employee  stock option grants
as if such method had been used to account for stock-based  compensation cost as
described in SFAS No. 123.

     The Company  applies the intrinsic  value method as outlined in APB 25, and
related  interpretations  in  accounting  for stock options  granted.  Under the
intrinsic value method,  no  compensation  expense is recognized if the exercise
price of the Company's employee stock options equals or exceeds the market price
of the underlying  stock on the date of grant.  Since the Company has issued all
stock option grants at market value, no compensation cost has been recognized at
the time of the grant.  SFAS 123  requires  that the  Company  provide pro forma
information  regarding  net income  (loss) and net income (loss) per share as if
compensation cost for the Company's stock option programs had been determined in
accordance with the fair value method  prescribed  therein.  The following table
illustrates the effect on net income and income per share as if the Company had

                                       8

<PAGE>

measured the compensation cost for the Company's stock option programs under the
fair value method in each period presented.
<TABLE>
<CAPTION>
                                                                               Three Months Ended
                                                                     October 31, 2004   October 31, 2003
                                                                     ----------------   ----------------

<S>                                                                     <C>                 <C>
      Net income, as reported                                           $2,348              $   311
      Add:  Stock  based compensation expense
          included in net income, net of related tax effects                 9                    -
      Deduct:  Total stock-based  employee compensation
        expense determined under fair value  method for all
        awards, net of  related tax effects                               (125)                (166)
                                                                          -----              -------

      Net income - pro forma                                            $2,232              $   145
                                                                         =====               ======


      Net income per share:
       Basic - as reported                                               $0.29              $ 0.04
                                                                          ====               =====

       Basic - pro forma                                                 $0.27              $ 0.02
                                                                          ====               =====

       Diluted - as reported                                             $0.28              $ 0.04
                                                                          ====                ====

       Diluted - pro forma                                               $0.26              $ 0.02
                                                                          ====                ====
</TABLE>

5.       Goodwill and Other Intangible Assets

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 142 requires that
goodwill  and  intangible  assets  with  indefinite  useful  lives no  longer be
amortized,  but  instead  be  tested  for  impairment  at least  annually.  This
pronouncement  also requires that intangible  assets with estimable useful lives
be  amortized  over their  respective  estimated  useful  lives and reviewed for
impairment in accordance  with SFAS No. 144,  "Accounting  for the Impairment or
Disposal of Long-Lived Assets."

     SFAS No. 142 requires,  on an annual basis,  that the Company test goodwill
and other intangible assets for impairment. To determine the fair value of these
intangible  assets,  there are many assumptions and estimates used that directly
impact the results of the testing.  In making these  assumptions  and estimates,
the Company uses set criteria  that are reviewed and approved by various  levels
of management, and the Company estimates the fair value of its reporting unit by
using discounted cash flow analyses.

     Accumulated  amortization was  approximately  $647 at both October 31, 2004
and July 31, 2004.  In  accordance  with SFAS No. 142, no goodwill  amortization
expense was recorded for the quarters ended October 31, 2004 and 2003.

     As of October 31, 2004 and July 31, 2004, there were no intangible  assets,
other than goodwill.

                                       9

<PAGE>
6.       Line of Credit

     The Company has available a line of credit with a financial  institution in
the  aggregate  amount  of  $15,000.  At  October  31,  2004,  no  amounts  were
outstanding  under this line,  which  expires on January 31,  2005.  The line of
credit facility  requires the Company to maintain  certain  financial ratios and
covenants.  At October 31, 2004, the Company was not in compliance  with all the
financial  ratios and  covenants  that it is required to  maintain.  The Company
received  a waiver of its  requirements  from its banks as of and for the period
ended October 31, 2004.

7.         Subleases

     As part of the sale to ePlus,  inc. of the Company's  end-user  information
technology  fulfillment and professional  services  business in May 2004, ePlus,
inc. entered into sublease and lease assignment  agreements with the Company for
up to a one year term with respect to certain of the  Company's  facilities.  In
addition,  in August 2004 the Company entered into a sublease  agreement with an
unrelated third party for its office and warehouse space at 40 Marcus Boulevard.
The terms of the sublease extend through  February 2018 and cover  substantially
all of the Company's required payments under its lease.

8.     Major Vendors

     The Company's top three vendors accounted for  approximately  16%, 15%, and
15% of total product  purchases from continuing  operations for the three months
ended  October  31,  2004.  The  Company's  top  three  vendors   accounted  for
approximately  25%,  14%, and 14% of total  product  purchases  from  continuing
operations for the three months ended October 31, 2003.


                                       10


<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations  ("MD&A") should be read in conjunction with the condensed
consolidated  financial statements and notes thereto appearing elsewhere in this
report and with the Company's Annual Report on Form 10-K for the year ended July
31, 2004.

General

     We are a distributor  of display  technology  solutions and plasma  display
monitors and computer hardware,  primarily to dealers and system integrators. To
date,  most of our revenues  have been derived  from  product  sales.  We do not
develop or sell software products.

     On May 28, 2004, we sold our end-user  information  technology  fulfillment
and professional  services business ("IT Business") to ePlus, inc.  ("ePlus") in
an all  cash  transaction.  The  transaction  included  the sale to ePlus of the
customer list of the business and certain related  equipment,  the assumption by
ePlus of certain  contracts and  liabilities  pertaining to the business and the
hiring  by  ePlus  of the  majority  of  Manchester  employees  involved  in the
business.  The transaction did not include,  and we retained,  the inventory and
accounts receivable of the business.

     Prior to this sale, we  specialized  in hardware and software  procurement,
display  technology,   custom  networking,   security,   IP  telephony,   remote
management,  application  development/e-commerce,  storage,  and  enterprise and
Internet  solutions.  Subsequent  to the sale,  we have  continued  distributing
display technology  solutions and plasma display monitors and computer hardware,
but no longer provide professional services.

E-Commerce

     We utilize a website incorporating an electronic  communication system. The
site, located at www.electrograph.com allows both existing customers,  corporate
shoppers and others to find product  specifications,  compare products and check
prices  quickly and easily 24 hours a day seven days a week.  We have made,  and
expect to continue to make,  significant  investments  and  improvements  in our
e-commerce capabilities. There can be no assurance that we will be successful in
enhancing and increasing our business through our expanded Internet presence.

Discontinued Operations

     On May 28, 2004, the Company sold its IT Business to ePlus, inc., a leading
provider of Enterprise Cost Management, in an all cash transaction. The proceeds
from the sale of the IT  Business  were  $3,555,000  net of related  expenses of
$1,445,000.  The Company  recorded a gain,  included in loss from  operations of
discontinued  component  in the fiscal 2004,  ended July 31, 2004,  statement of
operations,  of  approximately  $876,000 as a result of the  transaction,  which
represented  the excess of the net  proceeds  over a payable to ePlus,  inc.  of
$469,000 for service contracts they assumed and the $2,210,000 carrying value of
the net  assets  sold,  consisting  of  goodwill  of  $2,704,000,  property  and
equipment,  net of $195,000 and deferred revenue of $689,000.  The loss from the
operations of the  discontinued IT Business was $8,492,000 in fiscal 2004, which
included the following  charges in the fourth quarter of fiscal 2004  associated
with the discontinued IT Business:


          Employee severance and other employee costs          $1,016,000
          Provision for doubtful accounts receivable            1,250,000
          Fixed asset impairments                               2,639,000
          Other                                                    50,000
                                                               ----------

          Total                                                $4,955,000
                                                               ==========

                                       11


<PAGE>

     As of October 31, 2004 approximately $150,000 of the employee severance and
other employee costs and $328,000 of amounts payable to ePlus,  inc. for assumed
service  contracts were included in accounts payable and accrued expenses in the
accompanying  balance sheet located elsewhere in this report, which will be paid
in fiscal 2005, ending July 31, 2005.


Risk  Factors  and  Cautionary  Statement  for  Purposes  of the  "Safe  Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995

     This report contains certain forward-looking  statements within the meaning
of the Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended, which statements are made pursuant to the safe
harbor  provisions  of The  Private  Securities  Litigation  Reform Act of 1995.
Forward-looking  statements are generally  identifiable  by the use of the words
"believes,"   "intends,"   "expects,"   "plans,"   "anticipates,"   or   similar
expressions.  Where any  forward-looking  statement  includes a statement of the
assumptions or bases underlying the forward-looking  statement, we caution that,
while we believe these  assumptions or bases to be reasonable and in good faith,
assumed  facts  or  bases  almost  always  vary  from the  actual  results,  and
differences  between  assumed facts or bases and actual results can be material,
depending upon the circumstances.  Where, in any forward-looking  statement,  we
express an  expectation  or belief as to future  results,  that  expectation  or
belief is expressed in good faith and is believed to have a reasonable basis. We
cannot assure you,  however,  that the statement of  expectation  or belief will
result or be achieved or  accomplished,  and readers are  cautioned not to place
undue  reliance on any  forward-looking  statements,  which reflect our opinions
only as of the date hereof. All of our forward-looking  statements are expressly
qualified by these  cautionary  statements and any other  cautionary  statements
that may accompany such forward-looking  statements.  We undertake no obligation
to revise or publicly release the results of any revision to any forward-looking
statements.

Our Industry is Subject to Numerous Potentially Adverse Business Conditions

     The technology industry is characterized by a number of potentially adverse
business conditions, including pricing pressures, evolving distribution channels
and  market   consolidation.   Heightened   price   competition   among  various
manufacturers  may result in reduced per unit revenue and declining gross profit
margins.  As a result of the intense price competition  within our industry,  we
have experienced  increasing  pressure on our gross profit and operating margins
with respect to our sale of products.  Our inability to compete  successfully on
the  pricing of  products  sold,  or a  continuing  decline in gross  margins on
products  sold due to adverse  industry  conditions or  competition,  may have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

Our Success is Dependent, in Part, on Maintaining a Highly Skilled Sales Force

     Our  success  depends in large part upon our  ability to attract and retain
highly skilled sales  representatives  in a very competitive  labor market.  The
loss  of  a  significant  number  of  our  existing  sales  representatives,  or
difficulty in hiring or retaining additional sales  representatives,  may have a
material  adverse  effect on our business,  results of operations  and financial
condition.

Our  Industry  is Highly  Competitive,  with Other  Competitors  Having  Greater
Resources

     The  technology  industry  is  characterized  by  intense  competition.  We
directly compete with local,  regional and national distributors as well as with
certain technology  manufacturers that market through direct sales forces and/or
the Internet. The technology industry has recently experienced, and may continue
to  experience,  a  significant  amount of  consolidation  through  mergers  and
acquisitions.  In the future,  we may face further  competition  from new market
entrants and  possible  alliances  between  existing  competitors.  In addition,
certain  suppliers and  manufacturers  have been, and  additional  suppliers and
manufacturers  may choose,  to market  products  directly to end users through a
direct  sales force  and/or the  Internet  rather than or in addition to channel
distribution.  Some of our  competitors  have or may  have,  greater  financial,
marketing and other resources, and

                                       12


<PAGE>

may offer a broader range of products than us. As a result,  they may be able to
respond  more  quickly to new or  emerging  technologies  or changes in customer
requirements,  benefit from greater purchasing economies,  offer more aggressive
hardware pricing or devote greater resources to the promotion of their products.
We may not be able to compete  successfully  in the  future  with these or other
current or potential competitors.

We Rely on Maintaining Good Relationships with Our Vendors, and Certain Products
We Sell May Be in Short Supply

     Our business is dependent upon our relationships  with major  manufacturers
and  distributors in the technology  industry.  Many aspects of our business are
affected  by our  relationships  with  major  manufacturers,  including  product
availability,  pricing  and related  terms.  The  increasing  demand for display
technology solutions and ancillary equipment has resulted in significant product
shortages from time to time,  because  manufacturers have been unable to produce
sufficient  quantities  of certain  products to meet demand.  In addition,  many
manufacturers  have adopted  "just in time"  manufacturing  principles  that can
reduce the immediate  availability  of a wide range of products at any one time.
We cannot predict that  manufacturers  will maintain an adequate supply of these
products to satisfy all the orders of our customers or that,  during  periods of
increased demand,  manufacturers will provide products to us, even if available,
or at discounts previously offered to us. In addition, we cannot assure you that
the pricing and related terms offered by major  manufacturers will not adversely
change in the future. Our failure to obtain an adequate supply of products,  the
loss of a major manufacturer, the deterioration of our relationship with a major
manufacturer  or our inability in the future to develop new  relationships  with
other  manufacturers  may  have a  material  adverse  effect  on  our  business,
financial condition and results of operations.

     Certain  manufacturers offer cooperative  advertising and other promotional
programs to systems integrators, distributors and computer resellers. We rely on
these  funds  for  many  of  our  advertising  and  promotional  campaigns.   If
manufacturers  reduce their level of support for these programs,  or discontinue
them  altogether,  we would  have to  increase  our  advertising  and  promotion
spending,  which may have a material  adverse effect on our business,  financial
condition and results of operations.

         Our profitability has been affected by our ability to obtain volume
discounts from certain manufacturers, which has been dependent, in part, upon
our ability to sell large quantities of products to computer resellers,
including value added resellers. Our inability to sell products to computer
resellers and thereby obtain the desired volume discounts from manufacturers may
have a material adverse effect on our business, financial condition and results
of operations.

We Must  Rapidly  Respond to New  Product  Offerings  and  Manage Our  Inventory
Carefully

     The  markets  for  our  products  are  characterized  by  rapidly  changing
technology  and  frequent  introduction  of new  products.  This may render many
existing  products  noncompetitive,  less profitable or obsolete.  Our continued
success  will  depend  on our  ability  to  keep  pace  with  the  technological
developments of new products and to address increasingly  sophisticated customer
requirements.  Our success  will also depend upon our  abilities to obtain these
new products  from  present or future  manufacturers  and vendors at  reasonable
costs,  to educate and train our employees as well as our customers with respect
to these new products and to integrate  effectively  and  efficiently  these new
products into our internal  systems.  We may not be  successful in  identifying,
developing and marketing  product  developments  or  enhancements in response to
these  technological  changes.  Our  failure  to  respond  effectively  to these
technological  changes  may have a  material  adverse  effect  on our  business,
financial condition and results of operations.

     Rapid  product  improvement  and  technological   change  characterize  the
technology  industry.  This results in relatively  short product life cycles and
rapid product obsolescence,  which can place inventory at considerable valuation
risk. Certain of our suppliers and manufacturers provide price protection to us,
which is  intended  to reduce  the risk of  inventory  devaluation  due to price
reductions  on current  products.  Certain of our  suppliers  also provide stock
balancing  to us pursuant to which we are able to return  unsold  inventory to a
supplier or


                                       13


<PAGE>

manufacturer  as a partial  credit against  payment for new products.  There are
often  restrictions  on the dollar amount of inventory that we can return at any
one time. Price protection and stock balancing may not be available to us in the
future,  and,  even  if  available,  these  measures  may not  provide  complete
protection  against  the  risk  of  excess  or  obsolete  inventories.   Certain
manufacturers  have reduced the period for which they provide  price  protection
and stock balancing  rights.  Although we maintain a  sophisticated  proprietary
inventory  management  system,  we cannot  assure you that we will  continue  to
successfully   manage  our  existing  and  future  inventory.   Our  failure  to
successfully  manage our current or future inventory may have a material adverse
effect on our business, financial condition and results of operations.

     As a  result  of the  rapid  changes  that  are  taking  place  in  display
technologies,  product life cycles are short. Accordingly, our product offerings
change constantly.  Prices of products change frequently,  with generally higher
prices  early in the life cycle of the product and lower  prices near the end of
the product's life cycle. The technology industry has experienced rapid declines
in average selling prices of display technology and computer  hardware.  In some
instances,  we have been able to offset these price  declines with  increases in
units shipped.  There can be no assurance  that average  selling prices will not
continue  to  decline  or that we will be able to  offset  declines  in  average
selling prices with increases in units shipped.

We Are Highly Dependent on a Select Group of Senior Management

     We are highly  dependent  upon the  services  of the  members of our senior
management team. The loss of any member of the senior management team may have a
material adverse effect on our business.

We May,  From Time to Time,  Take Actions to Enhance  Shareholder  Value,  Which
Actions May Not be Successful

     The Company periodically  considers methods of enhancing shareholder value,
including,   without   limitation,    acquisitions,    divestitures,    business
combinations,  and strategic partnering.  There can be no assurance that we will
consummate any such  transactions,  be able to identify suitable  candidates for
any such transactions or to negotiate  successfully such transactions at a price
or on terms and conditions  favorable to us and our  shareholders.  Acquisitions
may be of  significant  size  and  may  include  assets  that  are  outside  our
geographic  territories  or are  ancillary  to our core  business  strategy.  In
addition,  there can be no assurance that the  divestiture of our IT Business or
any other  action  taken with the  intent of  enhancing  shareholder  value will
result  in an  increase  in our  revenues  or  earnings  or  otherwise  increase
shareholder value.

Our Revenues and Operating Results Fluctuate From Quarter to Quarter

     Our quarterly  revenue and operating  results have varied  significantly in
the past and are expected to continue to do so in the future.  Quarterly revenue
and  operating  results  generally  fluctuate  as a result of the demand for our
products,  the introduction of new hardware with improved  features,  changes in
the  level  of our  operating  expenses,  competitive  conditions  and  economic
conditions.  As a result,  we believe that  period-to-period  comparisons of our
operating  results  should  not  be  relied  upon  as an  indication  of  future
performance.   In  addition,  the  results  of  any  quarterly  period  are  not
necessarily indicative of results to be expected for a full fiscal year.

We  Rely on the  Continued  Proper  Functioning  of our  Information  Technology
Systems

     Our success is dependent in part on the accuracy,  proper  utilization  and
continuing  development of our  information  technology  systems,  including our
business application systems, Internet servers and telephony system. The quality
and our utilization of the information  generated by our information  technology
systems  affects,  among other things,  our ability to conduct business with our
customers,  manage our inventory and accounts receivable,  purchase,  sell, ship
and  invoice  our  products  efficiently  and on a  timely  basis  and  maintain
cost-efficient operations.  While we have taken steps to protect our information
technology  systems from a variety of threats,  including  computer  viruses and
malicious  hackers,  we cannot  guarantee that such steps will be effective.  If
there  is a  disruption  to or an  infiltration  of our  information  technology
systems, it could significantly harm our business and results of operations.


                                       14


<PAGE>

     This discussion of uncertainties is by no means exhaustive, but is designed
to  highlight  important  factors  that may impact  the  Company's  outlook  and
results.

Critical Accounting Policies

     The  Company's  discussion  and  analysis of its  financial  condition  and
results of operations is based on its consolidated  financial statements,  which
have been prepared in accordance with accounting  principles  generally accepted
in the United  States.  The  preparation  of  financial  statements  and related
disclosures in conformity with accounting  principles  generally accepted in the
United States of America requires management to make judgments,  assumptions and
estimates  that  affect  the  amounts  reported  in the  consolidated  financial
statements  and  accompanying  notes.  Note  1  to  the  consolidated  financial
statements  in the Annual Report on Form 10-K for the fiscal year ended July 31,
2004  describes  the  significant  accounting  policies  and methods used in the
preparation of the consolidated  financial  statements.  The following  critical
accounting  policies are impacted  significantly  by judgments,  assumptions and
estimates used in the preparation of the consolidated financial statements.

     Revenue  Recognition.  Revenue from product sales is recognized  when title
and risk of loss are passed to the customer, which is at the time of shipment to
the customer.  The Company does not develop or sell software products.  However,
certain  computer  hardware  products  sold  by  the  Company  are  loaded  with
prepackaged  software  products.  The  net  impact  on the  Company's  financial
statements  of product  returns,  primarily  for  defective  products,  has been
insignificant.

     Allowance for Doubtful  Accounts.  The  allowance for doubtful  accounts is
based on our assessment of the  collectibility of specific customer accounts and
the aging of the accounts  receivable.  If there is a  deterioration  of a major
customer's  credit  worthiness or actual defaults are higher than our historical
experience,  our  estimates  of the  recoverability  of amounts  due us could be
adversely affected.

     Inventory. Inventory purchases and commitments are based upon future demand
forecasts.  If there is a sudden  and  significant  decrease  in demand  for our
products or there is a higher risk of inventory  obsolescence because of rapidly
changing  technology and customer  requirements,  we may be required to increase
our inventory allowances and our gross margin could be adversely affected.

     Goodwill.  We  perform  goodwill  impairment  tests on an annual  basis and
between annual tests in certain  circumstances.  In assessing the recoverability
of the Company's goodwill,  the Company must make various assumptions  regarding
estimated  future cash flows and other factors in determining the fair values of
the respective assets. If these estimates or their related assumptions change in
the future,  the Company may be required to record impairment  charges for these
assets  in  future  periods.  Any such  resulting  impairment  charges  could be
material to the Company's results of operations.


                                       15


<PAGE>
Results of Operations

      The following table sets forth, for the periods indicated, information
derived from the Company's condensed consolidated statements of income expressed
as a percentage of revenue.
<TABLE>
<CAPTION>

                                                              Percentage of Revenue for the
                                                                   Three Months Ended
                                                                        October 31,

                                                                  2004              2003
                                                                  ----              ----
<S>                                                                 <C>              <C>
           Revenue                                                  100.0%           100.0%

           Cost of revenue                                           87.1             89.6
                                                                     ----             ----

                Gross profit                                         12.9             10.4
           Selling, general and administrative expenses               6.7              7.4
                                                                      ---              ---

                Income from operations                                6.2              3.1

           Interest and other income (expense), net                   0.0              0.0
                                                                      ---              ---

                Income from continuing operations
                   before income taxes                                6.2              3.0

           Income tax provision                                       2.5              1.2
                                                                      ---              ---

                Income from continuing operations                     3.7              1.9
                                                                      ---              ---

           Discontinued operations
                Income (loss) from operations of discontinued
                  component                                             2.1           (1.9)
                Income tax (provision) benefit                         (0.8)           0.7
                                                                      ------           ---

                Income (loss) on discontinued operations                1.3           (1.2)
                                                                        ---           -----

           Net income                                                 5.0%             0.7%
                                                                      ====             ====
</TABLE>

Three Months Ended October 31, 2004 Compared with Three Months Ended October 31,
2003

     Revenue.  Revenue  increased by $1.5 million or 3% to $46.9 million for the
three  months  ended  October 31, 2004 from $45.4  million for the three  months
ended  October  31,  2003.  The  increase  in revenue is  primarily  a result of
increased sales of display technology solutions of approximately 12% as a result
of an increase in unit sales  partially  offset by a decrease in average selling
prices of large  screen  flat panel  displays.  In  addition,  sales of computer
hardware to dealers and  systems  integrators  decreased  by  approximately  41%
compared to last year as a result of the Company's inability to procure products
for this line of its business.

     Gross  Profit.  Cost of revenue  includes the direct costs of products sold
and freight.  All other  operating  costs are  included in selling,  general and
administrative  expenses.  Gross profit  increased by $1.3 million or 27%,  from
$4.7 million for the three months ended October 31, 2003 to $6.0 million for the
three months ended October 31, 2004 and as a percentage of revenue, gross profit
increased from 10.4% for the three months ended October


                                       16


<PAGE>

31, 2003 to 12.9% for the three months ended  October 31, 2004.  The increase in
gross profit  percentage is primarily  attributable to special product offerings
received  from  manufacturers  with higher  margins due to volume  discounts and
other favorable pricing.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses decreased by $211,000,  or 6% from $3.3 million for the
three months  ended  October 31, 2003 to $3.1 million for the three months ended
October 31, 2004. The decrease is principally  due to decreased bad debt expense
of approximately $400,000 as compared to the three months ended October 31, 2003
which  period  included an expense of $370,000  due to one  customer,  partially
offset by an increase in salaries  and other  personnel  costs of  approximately
$196,000,  reflecting the increase in employee  headcount and  associated  costs
with respect to the continuing growth of the display technology  business.  As a
percentage of revenue,  selling,  general and administrative  expenses decreased
from 7.4% for the three  months  ended  October  31,  2003 to 6.7% for the three
months ended October 31, 2004.

     Interest  and Other  Income  (Expense),  net.  Interest  and  other  income
(expense),   net,  increased  by  approximately   $35,000  from  an  expense  of
approximately  $20,000 for the three months ended  October 31, 2003 to income of
approximately  $15,000 for the three months ended  October 31, 2004.  The amount
for the three months ended  October 31, 2003 included  approximately  $88,000 of
interest  expense related to the interest  portion of the capital leases entered
into by the  Company in March 2003 offset by  interest  income of  approximately
$68,000  earned on the  Company's  cash  investments.  The  amount for the three
months ended October 31, 2004 included  $151,000 of interest  expense related to
the interest  portion of the capital leases and interest income of approximately
$166,000  earned on the  Company's  cash  investments  which had higher  average
balances than during the prior year period.

     Income Tax Provision. Our effective tax rate was 40.0% for the three months
ended October 31, 2004 and 38.6% for the three months ended October 31, 2003.

     Discontinued  Operations.  In accordance with SFAS 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets",  the results of operations for the
end-user information  technology  fulfillment and professional services business
have been recorded as discontinued  operations in the accompanying  consolidated
statements of income.  The net income (loss) from  discontinued  operations  was
$597,000 and  $(533,000)  for the three months ended  October 31, 2004 and 2003,
respectively. The income in the 2004 period resulted from a recovery of accounts
receivable  related to the IT  Business.  The  statement of  operations  for the
period  ended  October 31, 2003 has been  reclassified  to present  discontinued
operations.

Liquidity and Capital Resources

Working Capital

     Our  primary  source  of cash and  cash  equivalents  has  been  internally
generated  working capital from  profitable  operations.  The Company's  working
capital at October 31, 2004 and July 31, 2004 was  approximately  $37.4  million
and $34.4 million, respectively.

Cash Flows

     Operating  activities for the three months ended October 31, 2004 and 2003,
provided cash of approximately $3.7 million and $2.7 million,  respectively. Our
accounts  receivable  and accounts  payable  balances,  as well as our inventory
balances,  can  fluctuate  significantly  from one period to the next due to the
receipt  of  large  customer   orders  or  payments  or  variations  in  product
availability  and vendor shipping  patterns at any particular date. The increase
in accounts  receivable during the 2004 period of approximately $6.7 million and
the  decrease in  inventory of  approximately  $7.4 million in the period,  is a
result  of the  increase  in  sales  in the  period,  as well  as no  additional
inventory   purchases  related  to  special  product  offerings   received  from
manufacturers  during the period  which had  occurred  and  increased  inventory
balances during fiscal 2004. During the three months ended October 31, 2004, the
Company  collected $1.6 million of receivables  related to the Sold IT Business.

                                       17

<PAGE>

     Investing  activities  for the three months ended October 31, 2004 and 2003
used cash of  approximately  $72,000 and $515,000,  respectively.  These amounts
consisted solely of additions to property and equipment.

     Financing  activities  for the three months ended October 31, 2004 and 2003
provided (used) cash of approximately $378,000 and $(51,000),  respectively. For
the three months ended October 31, 2004, this amount  consisted of proceeds from
the exercise of stock  options of  approximately  $437,000  partially  offset by
$59,000 of payments on capitalized lease obligations. For the three months ended
October 31, 2003 this amount consisted  solely of payments on capitalized  lease
obligations.

Line of Credit

     We have  available  a line of credit with a  financial  institution  in the
aggregate  amount of $15.0  million.  At  October  31,  2004,  no  amounts  were
outstanding  under this line which  expires on  January  31,  2005.  The line of
credit facility  requires the Company to maintain  certain  financial ratios and
covenants.  At October 31, 2004, the Company was not in compliance  with all the
financial  ratios and  covenants  that it is required to maintain in  connection
with its line of credit.  The Company received a waiver waiving its requirements
from its bank for the period ended October 31, 2004.

Financial Commitments

     We believe that our current balances in cash and cash equivalents, expected
cash flows from  operations  and available  borrowings  under the line of credit
will be adequate to support current operating levels for the foreseeable future,
specifically  through  at least the end of fiscal  2005  which  ends on July 31,
2005. We currently have no material commitments for capital expenditures,  other
than  operating  and capital  leases,  that the Company has committed to for its
facilities and certain  tangible  property.  Future capital  requirements of the
Company  include those for the growth of working  capital items such as accounts
receivable and inventory, the purchase of equipment, expansion of facilities, as
well as the possible opening of new offices and potential acquisitions.

     As part of the sale to ePlus,  inc. of the Company's  end-user  information
technology  fulfillment and professional  services  business in May 2004, ePlus,
inc. entered into sublease and lease assignment  agreements with the Company for
up to a one year term with respect to certain of the  Company's  facilities.  In
addition,  in August 2004 the Company entered into a sublease  agreement with an
unrelated third party for its office and warehouse space at 40 Marcus Boulevard.
The terms of the sublease extend through  February 2018 and cover  substantially
all of the  Company's  required  payments  under its  lease.  There are no other
transactions,  arrangements and other relationships with unconsolidated entities
or  other  persons  that  are  reasonably  likely  to  affect  liquidity  or the
availability of, or requirements for, capital resources.

     The following table  represents the Company's  financial  commitments as of
October 31, 2004 without taking into account any sublease rental income:
<TABLE>
<CAPTION>

                                               Less than        1 - 3              4 - 5         After
                                 Total         1 Year           Years              Years           5 Years
                                 -------------------------------------------------------------------------
                                                                                                 (in thousands)
<S>                                <C>             <C>           <C>              <C>             <C>
       Capital leases              $7,870          $255          $1,003           $905            $5,707
       Operating leases             1,644           417           1,227              -                 -
                                    -----         -----           -----            ---          --------

       Total                       $9,514          $672          $2,230           $905            $5,707
                                    =====           ===           =====            ===             =====
</TABLE>

     The Company regularly examines  opportunities for strategic acquisitions of
other  companies  or lines of business  and  anticipates  that it may issue debt
and/or equity securities either as direct consideration for such acquisitions or
to  raise  additional  funds to be used (in  whole  or in part) in  payment  for
acquired securities or assets. The issuance of such securities could be expected
to have a dilutive impact on the Company's


                                       18


<PAGE>

shareholders,  and there can be no
assurance as to whether or when any acquired business would contribute  positive
operating results commensurate with the associated investment.

Impact of Recently Issued Accounting Standards

     The FASB recently issued a proposed  accounting standard that would require
stock-based  employee  compensation  to be  recorded  as a  charge  to  earnings
effective with the first annual or interim period beginning after June 15, 2004.
The  Company  will  continue to monitor  the  progress  of the  issuance of this
standard as well as evaluate the impact on the Company.


Inflation

     We do  not  believe  that  inflation  has  had a  material  effect  on  our
operations.


                                       19


<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company  is not  exposed  to  significant  market  risk.  The  Company
primarily  invests its cash in mutual funds  consisting of U.S.  Government  and
Government  Agency  Securities,  Municipal  Bonds  and  Corporate  Fixed  Income
securities.  Neither  a 100 basis  point  increase  nor  decrease  from  current
interest rates would have a material effect on the Company's financial position,
results of operations or cash flows.


ITEM 4.  CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

     As of the  end  of  the  period  covered  by  this  report,  the  Company's
management  conducted  an  evaluation,   under  the  supervision  and  with  the
participation  of  the  principal  executive  officer  and  principal  financial
officer,  of the Company's  disclosure  controls and  procedures  (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation,
the principal  executive officer and principal financial officer concluded that,
as of the end of the period  covered by this report,  the  Company's  disclosure
controls and procedures are effective.  Notwithstanding the foregoing, a control
system,  no matter how well designed and operated,  can provide only reasonable,
not  absolute,  assurance  that it will  detect or uncover  failures  within the
Company to disclose material  information  otherwise required to be set forth in
the Company's periodic reports.

(b) Changes in Internal Controls

     There  was no change  in the  Company's  internal  control  over  financial
reporting (as such term is defined in Rules  13a-15(f)  and 15d-15(f)  under the
Exchange Act) during the Company's most recently  completed  fiscal quarter that
has  materially  affected,  or is reasonably  likely to materially  affect,  the
Company's internal control over financial reporting.



                                       20


<PAGE>


                           PART II - OTHER INFORMATION

  ITEM 6.     EXHIBITS AND REPORTS

(a)  Exhibits

     31.1 -  Certification  by  Barry R.  Steinberg,  Chief  Executive  Officer,
          Pursuant to 18 U.S. C. Section  1350,  as Adopted  Pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

     31.2 - Certification by Elan Yaish, Chief Financial Officer, Pursuant to 18
          U.S.  C.  Section  1350,  as Adopted  Pursuant  to Section  302 of the
          Sarbanes-Oxley Act of 2002.

     32.1 -  Certification  by Barry R. Steinberg,  Chief Executive  Officer and
          Elan Yaish,  Chief Financial  Officer,  Pursuant to 18 U.S. C. Section
          1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of
          2002.

(b) Reports on Form 8-K

1.        Form 8-K/A filed August 11, 2004 disclosing pro forma financial
          information omitted from the Current Report on Form 8-K filed on June
          10, 2004 regarding the sale of the Company's IT Business to ePlus,
          inc.
2.        Form 8-K filed October 29, 2004 disclosing Press Release dated October
          28, 2004 reporting earnings for the fourth quarter and fiscal year
          ended July 31, 2004.


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<PAGE>


                          MANCHESTER TECHNOLOGIES, INC.

                                   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.



                                        MANCHESTER TECHNOLOGIES., INC.
                                        -----------------------------
                                        (Registrant)



DATE:   July 5, 2005                    /S/ Barry R. Steinberg
                                        ----------------------------------------
                                        Barry R. Steinberg
                                        Chief Executive Officer



DATE:   July 5, 2004                    /S/ Elan Yaish
                                        ----------------------------------------

                                        Elan Yaish
                                        Vice President Finance
                                        and Chief Financial Officer

                                       22