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  September 30, 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

STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>

                                                            Three Months Ended             Six Months Ended

                                                          9/30/99        9/30/98        9/30/99        9/30/98
<S>                                                   <C>           <C>             <C>            <C>

Products and service revenues .....................   $   518,659   $    623,983    $   992,305    $ 1,066,566

Cost of products and services sold ................       214,044        215,994        409,980        388,641
Selling and administrative expenses ...............       227,217        256,824        448,147        508,211
Research and development expenses
   and software construction and
   product enhancement amortization ...............        35,414         49,842         61,859        103,831
                                                      -----------    -----------    -----------    -----------

                                                          476,675        522,660        919,986      1,000,683

Operating profits .................................        41,984        101,323         72,319         65,883

Interest expense, net .............................        (1,185)        (2,856)        (2,902)        (5,240)
                                                       -----------    -----------    -----------    -----------

Income before taxes ...............................        40,799         98,467         69,417         60,643

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

Net income ........................................        40,799         98,467         69,417         60,643

Less: Dividend payable on preferred shares ........        (8,160)       (13,528)       (13,883)       (13,528)
                                                      -----------    -----------    -----------    -----------

Net income available to common shareholders .......   $    32,639    $    84,939    $    55,534    $    47,115
                                                      ===========    ===========    ===========    ===========

Weighted average of common 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 ...........................        31,077           --             --             --
                                                      -----------    -----------    -----------    -----------
Adjusted weighted average of common shares
outstanding .......................................     4,275,213      3,044,136      4,244,136      3,044,136
                                                      ===========    ===========    ===========    ===========

Basic earnings per share ..........................   $      0.01    $      0.03    $      0.02    $      0.02
                                                       ===========   ===========    ===========    ===========

Diluted earnings per share ........................    $     0.01    $      0.03    $      0.01    $      0.02
                                                       ===========   ===========    ===========    ===========
</TABLE>

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


<PAGE>
Item 1 - Financial Statements  (continued)

BALANCE SHEETS
As of September 30, 1999 & March 31, 1999
<TABLE>
<CAPTION>
                                                            (Unaudited)
                                                           Sept. 30       March 31
                                                               1999           1999
<S>                                                     <C>            <C>
ASSETS ..............................................
Current Assets
     Cash ...........................................   $     7,084    $    32,848
     Receivables
          Trade .....................................       248,029        125,786
          Unbilled ..................................        33,400        115,588
          Related parties ...........................        15,200            200
                                                        -----------    -----------
     Total receivables ..............................       296,629        241,574
     Inventories
          Finished products .........................        51,786         96,164
          Work in process ...........................        87,047         68,128
          Raw material ..............................        96,023         85,049
                                                        -----------    -----------
     Total inventories ..............................       234,856        249,341

     Prepaid expenses ...............................         7,635          2,702
                                                        -----------    -----------

          Total Current Assets ......................       546,204        526,465

Property and Equipment-at Cost
     Furniture and office equipment .................       133,284        133,284
     Machinery and plant equipment ..................       264,164        264,164
     Software construction and product enhancement ..     2,247,887      2,203,070
                                                        -----------    -----------
                                                          2,645,335      2,600,518
     Less accumulated depreciation and amortization .     2,564,715      2,558,156
                                                        -----------    -----------
                                                             80,620         42,362
                                                        -----------    -----------
               Total Assets .........................   $   626,824    $   568,827
                                                        ===========    ===========

LIABILITIES
Current Liabilities
     Short-term notes payable and current maturities
          of long-term debt .........................   $    39,960    $    20,788
     Accounts payable - trade .......................       647,129        614,230
     Accounts payable - related parties .............           535           --
     Dividend payable ...............................        38,155         35,698
     Deferred income ................................       291,260        321,819
     Accrued liabilities
          Salaries and wages ........................       110,094        105,514
          Property and payroll taxes ................        41,157         41,317
          Commissions ...............................        99,147         75,651
          Other .....................................        47,172         59,817
                                                        -----------    -----------
               Total Accrued Liabilities ............       297,570        282,299
                                                        -----------    -----------
               Total Current Liabilities ............     1,314,609      1,274,834

Long-Term Obligations, Less Current Maturities ......         7,637         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 ............................    (8,884,977)    (8,940,511)
                                                        -----------    -----------
          Total Shareholders' Deficit ...............      (695,422)      (750,956)
                                                        -----------    -----------

          Total Liabilities and Shareholders' Deficit   $   626,824    $   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 six months ended September 30, 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 ..................          --             --           --          69,417        69,417

Dividends payable on preferred shares ......          --             --           --         (13,883)      (13,883)
                                               -----------   -----------   -----------   ------------   ----------

Balance, September 30, 1999 ................   $    61,674   $ 2,400,000   $ 5,727,881   $(8,884,977)   $  (695,422)
                                               ===========   ===========   ===========   ============   ===========

</TABLE>


































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

<PAGE>


Item 1 - Financial Statements  (continued)

STATEMENTS OF CASH FLOWS
For the six months ended September 30,
(unaudited)
<TABLE>
<CAPTION>

                                                                            1999         1998
                                                                       ---------    ---------
<S>                                                                    <C>          <C>
Cash provided by operations:
    Net income for period ..........................................   $  69,417    $  60,643
    Adjustments to reconcile net income to cash from operations:
        Depreciation and amortization ..............................       5,676       10,388
        Amortization of software construction
               and product enhancements ............................         883       19,659
        Provision for obsolete inventory ...........................      12,000       12,000
        Amortization of deferred income and deferred rent ..........     (84,945)    (110,920)

    Increase (decrease) in cash  due to changes in
        Accounts receivable ........................................     (55,055)      99,845
        Inventories ................................................       2,485      (43,137)
        Prepaid expenses ...........................................      (4,933)     (22,943)
        Accounts payable ...........................................      33,434       16,732
        Accrued liabilities ........................................       3,845       (9,982)
        Deferred income ............................................      19,597       (4,310)
                                                                          ------       ------
                    Net cash provided by operations ................       2,404       27,975

Cash used in investment activities:
        Purchase of equipment ......................................        --         (6,014)
        Increase in software construction and product enhancements .     (44,817)         --
                                                                       ---------    ---------
                    Net cash used in investment activities .........     (44,817)      (6,014)

Cash provided (used) by financing activities:
        Additions to debt obligations ..............................      35,000          --
        Payments on debt obligations ...............................     (18,351)     (20,951)
                                                                         -------      -------
                    Net cash provided (used) by financing activities      16,649      (20,951)

Increase (decrease) in cash ........................................     (25,764)       1,010
Cash - beginning of period .........................................      32,848       79,408
                                                                       ---------    ---------
Cash - end of period ...............................................   $   7,084    $  80,418
                                                                       =========    =========

Interest paid during period ........................................   $   3,074      $ 5,637
                                                                       =========    =========
</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 September 30, 1999 and the results of operations  for the three and six month
periods  ended  September 30, 1999 and 1998 and its cash flows for the six month
periods  ended  September 30, 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 September
30,  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 will become "00" and the  computer or system
will  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,  utilizes date
identification.

The Company has initiated 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.  If a system,  process
or third party  provider is deemed  significant to the operations of the Company
and Year 2000 compliance is in question,  the Company will develop a contingency
plan to address  the issue.  At this time the Company  has not  encountered  nor
anticipates any significant Year 2000 issues requiring a contingency plan.

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

The review  process is complete and the Company has  discovered no material
Year 2000  compliance  issues.  The Company has not incurred nor anticipates any
additional significant expenses as a result of its Year 2000 work.



<PAGE>
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,  payable monthly,  is computed at the prime rate plus
2%. The agreement  expires on August 1, 2000. 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

         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 $105,324,  or 17% for the three months
ended September 30, 1999,  when compared to the prior year period.  The decrease
occurred primarily in the Company's 7000 Series product line. Medallion revenues
for the period were  approximately  the same as last year although  sales to end
user customers  increased 89% or $161,000.  Last year included sales of $163,000
to a company  under an OEM  distribution  agreement.  For the six  months  ended
September 30, 1999, revenue decreased by $74,261 or 7% when compared to the same
period of the prior year.  Sales  increased  significantly  in the  targeted new
markets  for special  systems and test  applications  using  Medallion  products
during the period, but were 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.
Medallion  product  revenue was about the same for the current six month  period
when compared to the prior year.

Order backlog  amounted to $257,000 at September 30, 1999 compared with $300,000
at September 30, 1998. The decrease was  attributable  to four  remaining  units
from the eight system Series 7000 order  received  during the fourth  quarter of
fiscal 1998 which were included in the prior year amount.  The decline in Series
7000 orders was substantially  offset by increases in the backlog for Medallion,
new market products and extended service contracts during the current year.

Costs of products and services  sold were 41% of products and services  revenues
for the three  and six  months  ended  September  30,  1999  versus  35% and 36%
respectively  for the same  periods  of the prior  year.  The  increase  was due
primarily  to higher than normal costs on several 7000 Series sales and the sale
of a custom designed product.

Selling and administrative  expenses decreased $29,607 and $60,064 or 12% during
the current three and six month periods ended September 30, 1999 versus the same
prior year periods.  The decrease  during the current three month period was due
mainly to less sales  promotion  expenses  versus an unusually  high amount last
year and lower professional services and communications  expenses. A significant
decrease  in sales  commission  expense  during  the  current  six month  period
resulting   from  fewer  sales  upon  which   commissions   were  due  to  sales
representatives  was  partially  offset by higher costs during the current three
month period as commissionable  transactions to sales representatives increased.
Selling and  administrative  expenses were 44% and 45%  respectively of products
and service  revenues for the current three and six month periods versus 41% and
48%  respectively  for the same periods of the prior year.  The increase for the
current three month period was due to the decline in revenue.

Research and development  expenses and software  construction  amortization  was
$35,414 and $61,859,  respectively,  for the three and six month  periods  ended
September  30, 1999  versus  $49,842 and  $103,831,  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  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 $1,185 and  $2,902,  respectively,  for the three and six
month periods ended  September 30, 1999 versus $2,856 and $5,240,  respectively,
for the same periods  ended  September  30, 1998.  This decrease was due to less
borrowings during the current year.

Income tax expense was $13,872 and $23,602,  respectively, for the three and six
months  ended   September  30,  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.


Liquidity & Capital Resources

Software Construction and Product Development

The  Company's  cash outlay for software  construction  and product  enhancement
costs for the six months ended September 30, 1999 was $44,817. There was no cash
outlay for software  construction and product  enhancement costs during the same
period of the prior year.  There were no unamortized  software  construction and
product costs at March 31, 1999.

Working Capital and Cash Flow

The Company's  working capital  decreased from a negative  $748,369 at March 31,
1998 to a negative  $768,405 at September 30, 1999. The current ratio was .41 at
March 31, 1999 and  September  30, 1999.  The change in working  capital was due
primarily to an increase in accounts payable, accrued liabilities and short-term
borrowings that were substantially offset by an increase in accounts receivable.

The Company's cash flows from  operations  amounted to $2,404 for the six months
ended September 30, 1999. The Company  borrowed $35,000 during  September,  1999
and made payments on other existing long-term debt totaling $18,351.  Investment
in software  construction and product enhancement  activities was $44,817 during
the current six month period.

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:  November 5, 1999