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

                                    FORM 10-Q



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


     For the Quarter Ended December 31, 1999 Commission File Number 0-12283


                                ZONIC CORPORATION
             (Exact name of Registrant as specified in its charter)



                                 Ohio 31-0791199
        (State of Incorporation) (I.R.S. Employer Identification Number)

              50 West Technecenter Drive,  Milford,  Ohio 45150-9777 (address of
               principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (513) 248-1911


                                 Not Applicable
       (Former name, address or fiscal year if changed since last report)


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.
                                 Yes X No ______

 The           total number of shares outstanding of the issuer's common shares,
               without par value, as of the date of this report, follow:



                                    3,044,136



<PAGE>



Part I   Financial Information

Item 1.  Financial Statements



<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(unaudited)
<S>                                                         <C>                          <C>
                                                            Three Months Ended           Nine Months Ended
<S>                                                     <C>             <C>             <C>             <C>
                                                        12/31/99        12/31/98        12/31/99        12/31/98
                                                      -----------     -----------     -----------     -----------
<S>                                                   <C>             <C>             <C>             <C>
Products and service revenues ....................    $   517,926     $   624,975     $ 1,510,231     $ 1,691,541

Cost of products and services sold ...............        209,897         217,110         619,877         605,750
Selling and administrative expenses ..............        248,243         261,442         696,391         769,654
Research and development expenses
   and software construction and
   product enhancement amortization ..............         38,564          50,299         100,423         154,130
                                                      -----------     -----------     -----------     -----------

                                                          496,704         528,851       1,416,691       1,529,534

Operating profits ................................         21,222          96,124          93,540         162,007

Interest expense, net ............................         (2,996)         (1,092)         (5,899)         (6,333)
Foreign currency gain (loss) .....................            (12)            875             (12)            875
Gain on sale of assets ...........................           --               500            --               500
                                                      -----------     -----------     -----------     -----------

Income before taxes ..............................         18,214          96,407          87,629         157,049

Provision for income taxes .......................           --              --              --              --
                                                      -----------     -----------     -----------     -----------

Net income .......................................         18,214          96,407          87,629         157,049

Less: Dividend payable on preferred shares .......         (3,644)        (20,600)        (17,527)        (34,128)
                                                      -----------     -----------     -----------     -----------

Net income available to common shareholders ......    $    14,570     $    75,807     $    70,102     $   122,921
                                                      ===========     ===========     ===========     ===========

Weighted average shares outstanding ..............      3,044,136       3,044,136       3,044,136       3,044,136
Dilutive potential common shares:
   Class A convertible preferred stock ...........      1,200,000            --         1,200,000            --
   Stock Options .................................           --              --              --              --
                                                      -----------     -----------     -----------     -----------
                                                      ===========     ===========     ===========     ===========
Adjusted weighted average of common shares .......      4,244,136       3,044,136       4,244,136       3,044,136
                                                      ===========     ===========     ===========     ===========

Basic earnings per share .........................    $      0.00     $      0.02     $      0.02     $      0.04
                                                      ===========     ===========     ===========     ===========
                                                      ===========     ===========     ===========     ===========
Diluted earnings per share .......................    $      0.00     $      0.02     $      0.02     $      0.04
                                                      ===========     ===========     ===========     ===========

</TABLE>



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


<PAGE>


Item 1 - Financial Statements  (continued)
<TABLE>
<CAPTION>

                  BALANCE SHEETS
     As of December 31, 1999 & March 31, 1999

                                                           (unaudited)
<S>                                                       <C>            <C>
                                                              Dec. 31        Mar. 31
ASSETS ................................................          1999           1999
Current Assets
     Cash .............................................   $    19,532    $    32,848
     Receivables
          Trade .......................................       216,820        125,786
          Unbilled ....................................        41,275        115,588
          Related parties .............................        21,152            200
                                                          -----------    -----------
     Total receivables ................................       279,247        241,574
     Inventories
          Finished products ...........................        96,219         96,164
          Work in process .............................        14,555         68,128
          Raw material ................................       106,135         85,049
                                                          -----------    -----------
     Total inventories ................................       216,909        249,341
     Prepaid expenses .................................         4,089          2,702
                                                          -----------    -----------
          Total Current Assets ........................       519,777        526,465

Property and Equipment-at Cost
     Furniture and office equipment ...................       133,284        133,284
     Machinery and plant equipment ....................       269,831        264,164
     Software construction and product enhancement ....     2,267,834      2,203,070
                                                          -----------    -----------
                                                            2,670,949      2,600,518
     Less accumulated depreciation and amortization ...     2,569,360      2,558,156
                                                          -----------    -----------

                                                              101,589         42,362

                                                          -----------    -----------
               Total Assets ...........................   $   621,366    $   568,827
                                                          ===========    ===========


LIABILITIES
Current Liabilities
     Short-term notes payable and current maturities
          of long-term debt ...........................   $    90,046    $    20,788
     Accounts payable - trade .........................       584,990        614,230
     Dividend payable .................................        31,799         35,698
     Deferred income ..................................       288,033        321,819
     Accrued liabilities
          Salaries and wages ..........................       115,060        105,514
          Property and payroll taxes ..................        48,582         41,317
          Commissions .................................        84,666         75,651
          Other .......................................        52,699         59,817
                                                          -----------    -----------
               Total Accrued Liabilities ..............       301,007        282,299

                                                          -----------    -----------
               Total Current Liabilities ..............     1,295,875      1,274,834

Long-Term Obligations, Less Current Maturities ........         6,345         10,160

Deferred rent .........................................          --           34,789

SHAREHOLDERS' DEFICIT
     Preferred shares .................................     2,400,000      2,400,000
     Common shares ....................................        61,674         61,674
     Additional paid-in capital .......................     5,727,881      5,727,881
                                                          -----------    -----------
                                                            8,189,555      8,189,555

     Accumulated deficit ..............................    (8,870,409)    (8,940,511)
                                                          -----------    -----------
          Total Shareholders' Equity ..................      (680,854)      (750,956)
                                                          -----------    -----------

          Total Liabilities and Shareholders' Equity ..   $   621,366    $   568,827
                                                          ===========    ===========

</TABLE>

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


<PAGE>


Item 1 - Financial Statements  (continued)

                       STATEMENT OF SHAREHOLDERS' DEFICIT
                  For the nine months ended December 31, 1999

                                  (unaudited)
<TABLE>

<CAPTION>

                                                                              Additional
                                             Common         Preferred          Paid - In         Accumulated
                                             Shares           Shares            Capital            Deficit            Total

<S>                                          <C>            <C>                <C>               <C>                <C>
Balance, March 31, 1999                      $ 61,674       $ 2,400,000        $ 5,727,881       $ (8,940,511)      $ (750,956)

Net income for the period                                -                    -                 -      87,629           87,629

Dividends payable on preferred shares                    -                    -                 -     (17,527)         (17,527)
                                           -----------     -------------     --------------     --------------     ------------

Balance, December 31, 1999                   $ 61,674       $ 2,400,000        $ 5,727,881       $ (8,870,409)      $ (680,854)
                                           ===========     =============     ==============     ==============     ============

</TABLE>


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

<PAGE>


Item 1 - Financial Statements  (continued)
<TABLE>

<CAPTION>
                      STATEMENTS OF CASH FLOWS
               For the nine months ended December 31,
                             (unaudited)
<S>                                                                    <C>          <C>
                                                                            1999         1998
                                                                       ---------    ---------
Cash provided (used) by operations
    Net income for period ..........................................   $  87,629    $ 157,049
    Adjustments to reconcile net income to cash from operations
        Depreciation ...............................................       8,342       13,637
        Amortization of software construction
               and product enhancements ............................       2,862       29,487
        Provision for obsolete inventory ...........................      18,000       18,000
        Amortization of deferred income and deferred rent ..........    (113,272)    (158,765)
        Gain on sale of assets .....................................        --           (500)
        Foreign currency (gain) loss and other .....................          12         (875)

    Increase (decrease) in cash  due to changes in
        Accounts receivable ........................................     (38,221)      70,813
        Inventories ................................................      14,432       24,627
        Prepaid expenses ...........................................      (1,387)      (7,459)
        Accounts payable ...........................................     (28,704)    (116,581)
        Accrued liabilities ........................................      (2,718)      18,329
        Deferred income ............................................      44,697        4,857
                                                                       ---------    ---------

                    Net cash provided (used) by operations .........      (8,328)      52,619

Cash used in investment activities
        Purchase of equipment ......................................      (5,667)      (6,014)
        Proceeds from the sale of fixed assets .....................        --            500
        Increase in software construction and product enhancements .     (64,764)        --
                                                                       ---------    ---------

                    Net cash used in investment activities .........     (70,431)      (5,514)

Cash provided (used) by financing activities
        Additions to debt obligations ..............................      85,000         --
        Payments on debt obligations ...............................     (19,557)     (31,461)
                                                                       ---------    ---------

                    Net cash provided (used) by financing activities      65,443      (31,461)

Increase (decrease) in cash ........................................     (13,316)      15,644
Cash - beginning of period .........................................      32,848       79,408
                                                                       ---------    ---------

Cash - end of period ...............................................   $  19,532    $  95,052
                                                                       =========    =========

Interest paid during period ........................................   $   5,899    $   3,669
                                                                       =========    =========
</TABLE>



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

<PAGE>


Item 1 - Financial Statements  (continued)

Notes to Financial Statements


1.  Presentation of Information

In the opinion of management,  the accompanying  unaudited financial  statements
reflect  all  adjustments  (consisting  of only  normal  recurring  adjustments)
necessary to present fairly Zonic Corporation's (the Company) financial position
at December 31, 1999 and the results of operations  for the three and nine month
periods  ended  December 31, 1999 and 1998 and its cash flows for the nine month
periods  ended  December 31, 1999 and 1998.  The results of  operations  for the
interim periods are not  necessarily  indicative of results to be expected for a
full year.

The financial  statements are summarized and should be read in conjunction  with
the annual  report to  shareholders  and Form 10-K for the year ended  March 31,
1999.  Certain  reclassifications  have been made to amounts shown for the prior
year to conform to current year classifications.

2.  New Standards

The Financial  Standards Board has proposed an  interpretive  release on several
issues that are not specifically  addressed in APB No.25,  "Accounting for Stock
Issued to Employees." The proposed  guidance for accounting for the repricing of
employee  stock options could result in significant  accounting  changes for the
Company as a result of the repricing of options which occurred in February 1999.
The Company would be required to record an expense (compensation costs) equal to
the difference  between the modified exercise price and any subsequent  increase
in the price of the Company's  common stock.  This  accounting  would be applied
from the date of  issuance  until the  exercise  date of the  option.  The final
Interpretation  would be  effective  upon  issuance,  but will cover events that
occurred  after  December  15,  1998.  The  impact  on the  Company's  financial
statements would depend on the market value of the common stock. At December 31,
1999, the market value of the Company's  common stock was less than the exercise
price of the  repriced  options,  and as  such,  there  would  be no  additional
expense.


3.  Year 2000 Issues

The Company defines Year 2000 compliance as proper functionality, or performance
of a system, process, or equipment that is not adversely affected by dates prior
to,  during,  and  after  the  year  2000.  Due  to  memory  constraints,  early
programmers  represented  years by the last two digits of the century.  Thus the
year 1970 is represented by the number "70" in many older software programs.  At
the turn of the  century,  the year became "00" and the computer or system could
interpret  this as the year  1900  and not the  year  2000.  Many  systems  have
electronic  components  that  utilize a date to control the  function it serves.
Most computer software,  including the Company product  offerings,  utilize date
identification.

The Company  completed a  comprehensive  review and  evaluation  of all relevant
internal and external systems, processes, and third party providers to determine
their  compliance  or  progress  toward Year 2000  compliance.  At this time the
Company has not encountered nor  anticipates  any future  significant  Year 2000
issues.

The Company's product offerings utilize date reference for the identification of
printed and stored data. A date  reference  problem  could result in stored data
being tagged with an incorrect  date,  or printed data  indicating  an incorrect
date.  Certain legacy products were not reviewed for Year 2000  compliance.  All
current products were determined to be Year 2000 compliant. This information has
been provided to the Company's  clients and the  information is available on the
company's WEB site.

 The  Company  has not  incurred  nor  anticipates  any  additional  significant
expenses as a result of its Year 2000 work.

4.  Short-Term Note Payable

On August 29, 1999, the Company signed a revolving line of credit agreement with
its local bank.  The maximum amount is $150,000 and is secured by all the assets
of the  Company.  Interest  is  computed  at the prime rate plus 2% and  payable
monthly.  The  agreement  expires on August 1,  2000.  The  amount  borrowed  at
December 31, 1999 was $85,000.  The previous note payable with the same bank was
paid in full on August 31, 1999.

 .



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


Special Cautionary Notice Regarding Forward-Looking Statements
<PAGE>

         Certain  of the  matters  discussed  under  the  caption  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operation"  may
constitute forward-looking statements for purposes of the Securities Act of 1933
and the  Securities  Exchange Act of 1934,  as amended,  and as such may involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual  results,  performance  or  achievements  of the Company to be materially
different from future results,  performance or achievements expressed or implied
by such  forward-looking  statements.  Important  factors  that could  cause the
actual results,  performance or achievement of the Company to differ  materially
from the Company's expectations include,  without limitation,  the following: 1)
the Company is unable to improve existing products or develop new products which
satisfy  needs in the Company's  markets;  2) the Company is unable to penetrate
new  markets;  3) the  Company is unable to retain  existing  personnel  or hire
additional personnel; 4) the industries the Company serves experience less rapid
growth than anticipated; 5) the Company is unable to obtain supplies on a timely
basis from its limited number of suppliers; 6) new competitors enter the markets
the Company serves or existing  competitors increase their marketing efforts; 7)
the Company is unable to obtain additional debt or equity financing on favorable
terms,  if at all,  to  satisfy  its  cash  requirements.  All  written  or oral
forward-looking  statements  attributable to the Company are expressly qualified
in their entirety by such factors.




Results of Operations

Product and Services  Revenue  decreased by $107,049 or 17% for the three months
ended  December 31,  1999,  when  compared to the prior year period.  A decrease
occurred in the Company's 7000 Series and WCA product  lines,  but was partially
offset by a $69,024 or 20%  increase  in  Medallion  sales.  For the nine months
ended December 31, 1999,  revenue  decreased by $181,310 or 11% when compared to
the same period of the prior year. Medallion sales increased $90,166, or 9% with
a significant  increase in revenue from targeted new markets for special systems
and test  applications  using  Medallion  products.  This increase was offset by
significant  declines in revenue  from 7000 Series and WCA  products.  The prior
year's 7000 Series  revenue was primarily  from an  eight-system  order received
during the fourth quarter of fiscal year 1998.

Order  backlog  amounted to $105,000 at December 31, 1999 compared with $272,000
at December 31, 1998. The decrease was in the backlog for Medallion products and
special systems using Medallion products.  This decrease was partially offset by
an increase in extended warranty service contracts during the current period.

Costs of products  and services  sold was 41% of products and services  revenues
for the three  and nine  months  ended  December  31,  1999  versus  35% and 36%
respectively  for the same  periods  of the prior  year.  The  increase  was due
primarily to higher costs on the sale of certain Medallion based custom designed
systems.

Selling and  administrative  expenses decreased $13,199 or 5% and $73,263 or 10%
during the current three and nine month periods,  respectively,  versus the same
prior year periods.  These decreases were due primarily to less sales commission
expense as a result of more sales made by the Company's employees versus outside
sales representatives  during the current periods and lower professional service
and advertising expenses.  Selling and administrative expenses were 48% and 46%,
respectively,  of product and service  revenues  for the current  three and nine
month  periods  versus 42% and 46%,  respectively,  for the same  periods of the
prior year.  The increased  percentage was due to lower revenues for the current
three and nine month periods.

Research and development  expenses and software  construction  amortization  was
$38,564 and $100,423  respectively,  for the three and nine month  periods ended
December  31,  1999  versus  $50,299 and  $154,130,  respectively,  for the same
periods of the prior year. These decreases were due to less amortization expense
as a result of a decrease  in  capitalized  software  construction  and  product
enhancement  costs  during  the  recent  years  and a  decline  in the  level of
Medallion  research and  development  costs versus the prior year.  See Software
Construction and Product Development under Liquidity and Capital Resources.

Interest expense was $2,996 and $5,899 respectively for the three and nine month
periods ended  December 31, 1999 versus $1,092 and $6,333  respectively  for the
same periods  ended  December 31, 1998.  The increase  during the current  three
month period was due to higher bank  borrowings and discounts given to customers
for early payment of invoices.

Income tax expense was $6,193 and  $29,794  respectively  for the three and nine
months  ended   December  31,  1999  and  was  offset  by  net  operating   loss
carryforwards.  At March 31, 1999, loss carryforwards  totaling $6.7 million and
tax credits of $666,000 were available to offset future income taxes. No benefit
from the Company's deferred tax assets has been provided at this time.

Dividend  payable on class B preferred  shares is equal to 20% of the  Company's
current year-to-date net income.
<PAGE>


Liquidity & Capital Resources

Software Construction and Product Development

The Company's total unamortized  software  construction and product  enhancement
costs at  December  31,  1999 was  $61,900.  There was no  unamortized  software
construction and product development costs at March 31, 1999. The Company's cash
outlay for software  construction and product  enhancement costs during the nine
months ended December 31, 1999 was $64,764. No costs were capitalized during the
prior year.

Working Capital and Cash Flow

The Company's  working capital  decreased from a negative  $748,369 at March 31,
1999 to a negative  $776,098 at December 31, 1999.  The current  ratio  declined
slightly from .41 at March 31, 1999 to .40 at December 31, 1999. The decrease in
working  capital was due primarily to increases in short term  borrowings  which
was  partially  offset by a decline in  accounts  payable,  deferred  income and
accrued liabilities.

The Company's  cash flows from  operations  generated a negative  $8,328 for the
nine months  ended  December  31, 1999.  The Company  borrowed  $85,000 and made
payments on long-term debt totaling $19,557.

The Company has experienced some improvement in its cash flow resulting from its
operating  profit during the current year, but continues to experience cash flow
problems as current  liabilities exceed current assets. The Company continues to
seek additional  working capital through debt or equity financing from public or
private  sources to reduce current  liabilities  and to sustain its  operations.
There can be no  assurance  that the Company  will be able to obtain  additional
financing on favorable terms, if at all, from any source.



PART II - Other Information

None


Item 6:  Exhibits and Reports on Form 8-K

         Exhibit 11 - Computation of earnings per common share - see Statements
                      of Operations

         Reports on Form 8-K  - None


<PAGE>


                                   SIGNATURES
Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.

ZONIC CORPORATION



By: /s/ James B. Webb
    -----------------
    James B. Webb
    President and Chief Executive Officer



By: /s/ John H. Reifschneider
    -------------------------
    John H. Reifschneider
    Controller


Dated:  February 4, 2000