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  June 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
<TABLE>

  Statement of Operations
  For The Three Month Periods Ended June 30,
   (unaudited)
<CAPTION>
                                                                       1999           1998
<S>                                                             <C>            <C>

  Product and service revenues ..............................   $   473,645    $   442,583

  Cost of products and services sold ........................       195,936        172,647
  Selling and administrative expenses .......................       220,930        251,388
  Research and development expenses and software construction
       and product enhancement amortization .................        26,445         53,989
                                                                -----------    -----------

  Total Operating Expenses ..................................       443,311        478,024

  Operating income (loss) ...................................        30,334        (35,441)

  Interest expense, net .....................................        (1,717)        (2,384)

                                                                -----------    -----------
  Income (loss) before taxes ................................        28,617        (37,825)

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

  Net income (loss) .........................................        28,617        (37,825)

  Less: Dividend payable on Class B preferred shares ........        (5,723)          --
                                                                -----------    -----------

  Net income (loss) available to common shareholders ........   $    22,894    $   (37,825)
                                                                ===========    ===========

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

  Basic earnings (loss) per share ...........................   $      0.01    $     (0.01)
  Diluted earnings (loss) per share .........................   $      0.01    $     (0.01)
</TABLE>


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



Item 1 - Financial Statements (continued)
<TABLE>

Balance Sheets
As of June 30, 1999  & March 31, 1999
<CAPTION>

                                                         (unaudited)

<S>                                                    <C>             <C>
                                                            30-Jun          31-Mar
  ASSETS ...........................................          1999           1999

  Current Assets
     Cash ..........................................   $    29,479    $    32,848
     Receivables
        Trade ......................................       125,866        125,786
        Unbilled ...................................        65,286        115,588
        Related parties ............................         8,700            200
                                                       -----------    -----------
      Total receivables ............................       199,852        241,574

      Inventories
         Finished products .........................       115,360         96,164
         Work in process ...........................        43,527         68,128
         Raw material ..............................        88,277         85,049
                                                       -----------    -----------
      Total inventories ............................       247,164        249,341

      Prepaid expenses .............................         7,163          2,702
                                                       -----------    -----------

         Total Current Assets ......................       483,658        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      2,235,573      2,203,070
                                                       -----------    -----------
                                                         2,633,021      2,600,518
      Less accumulated depreciation and amortization    (2,562,236)    (2,558,156)
                                                       -----------    -----------
                                                            70,785         42,362

            Total Assets ...........................   $   554,443    $   568,827
                                                       ===========    ===========


  LIABILITIES

  Current Liabilities
     Short term notes payable and current
        maturities of long-term debt ...............   $    11,413    $    20,788
     Accounts payable - trade ......................       643,869        614,230
     Deferred Income ...............................       281,297        321,819
     Dividend payable ..............................        34,995         35,698
     Accrued liabilities
        Salaries and wages .........................       107,075        105,514
        Property and payroll taxes .................        53,994         41,317
        Other ......................................       126,985        135,468
                                                       -----------    -----------
     Total Accrued Liabilities .....................       288,054        282,299
                                                       -----------    -----------

           Total Current Liabilities ...............     1,259,628      1,274,834

  Long-Term Obligations, Less Current Maturities ...         8,962         10,160

  Deferred Rent ....................................        13,915         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 ...........................    (8,917,617)    (8,940,511)
                                                       -----------    -----------
  Total Shareholders' Deficit ......................      (728,062)      (750,956)
                                                       -----------    -----------

           Total Liabilities & Shareholders' Deficit   $   554,443    $   568,827
                                                       ===========    ===========
</TABLE>


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



<PAGE>


Part I - Financial Statements (continued)

<TABLE>

Statement of Shareholders Deficit
For The Three Months Ended June 30, 1999
(unaudited)
<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 (loss) for period                         -                -                -               28,617          28,617

Dividend payable on preferred shares                 -                -                -               (5,723)         (5,723)
                                                ----------    -------------    -------------    ----------------    ------------

Balance, June 30, 1999                           $ 61,674      $ 2,400,000      $ 5,727,881      $ (8,917,617)     $ (728,062)
                                                ==========    =============    =============    ==============    ============

</TABLE>

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







<PAGE>


Part I - Financial Statements (continued)
<TABLE>

Statements of Cash Flows
  For The Three Month Periods Ended June 30,
   (unaudited)
<CAPTION>

<S>                                                         <C>          <C>
                                                            1999         1998
  Cash used in operations:
     Net income (loss) for period .......................   $  28,617    $ (37,825)
     Adjustments to reconcile net income (loss)
           to cash from operations:
        Depreciation and amortization ...................       3,680        6,416
        Amortization of software construction
            and product enhancements ....................         400        9,828
        Provision for obsolete inventory ................       6,000        6,000
        Amortization of deferred income and deferred rent     (42,860)     (50,391)
     Increase (decrease) in cash due to changes in
        Accounts receivable .............................      41,722      154,849
        Inventories .....................................      (3,823)    (103,507)
        Prepaid expenses ................................      (4,461)      (5,858)
        Accounts payable ................................      29,639      (37,056)
        Accrued liabilities .............................        (671)     (17,591)
        Deferred income .................................     (18,536)      27,004
                                                              -------    ---------

           Net cash provided by (used in) operations ....      39,707      (48,131)

  Cash used in investment activities:
        Purchase of fixed assets ........................           -       (2,707)
        Increase in software construction
           and product enhancements .....................     (32,503)        --
                                                              -------     ---------

           Net cash used in investment activities .......     (32,503)      (2,707)

  Cash used in financing activities:
        Payments on long-term obligations ...............     (10,573)     (10,466)
                                                              -------    ---------

  Decrease in cash ......................................      (3,369)     (61,304)
  Cash - beginning of period ............................      32,848       79,408
                                                            ---------    ---------

  Cash - end of period ..................................   $  29,479    $  18,104
                                                            =========

  Interest paid during period ...........................   $   1,717    $   2,781
                                                            =========    =========

</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 June 30,  1999 and the  results  of  operations  and cash flows for the three
month  periods ended June 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 Accounting 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 (probably
in September),  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 June 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.

This  review  process  is 95%  complete  at June 30,  1999 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 on-going
Year 2000 work.



<PAGE>



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  increased by $31,062,  or 7% for the three months
ended June 30, 1999,  when  compared to the prior year period.  Sales  increased
significantly  in  the  targeted  new  markets  for  special  systems  and  test
applications using Medallion products. This increase was substantially offset by
a decreases in the 7000 Series and WCA product lines. Service revenues increased
$3,104 or 8% for the current  three month period when compared to the prior year
period.

Order  backlog  amounted to $133,000 at June 30, 1999  compared with $597,000 at
June 30, 1998. There were significant decreases in the 7000 series and Medallion
product lines.  Prior year 7000 series backlog  included 7 systems from an order
received during the fourth quarter of fiscal 1998 which were shipped  throughout
the remainder of fiscal year 1999. The decrease in Medallion  backlog was due to
a decline in new orders and the Company's  ability to process and ship Medallion
orders on a more timely basis.

Costs of products and services  sold were 41% of products and services  revenues
for the three  months  ended June 30, 1999  versus 39% for the prior  year.  The
increase in costs was due to higher than normal  costs on a 7000 series  related
sale.

Selling and administrative  expenses decreased $30,458 or 12% during the current
period  versus  the same  prior  year  period.  This  decrease  was due to lower
administrative salaries and lower commission expense as sales from outside sales
representatives  declined. These decreases were partially offset by higher sales
commission  paid to the Company's  employees and an increase in advertising  and
sales promotion costs.  Selling and administrative  expenses were 47% versus 57%
of total revenue for the current and prior year periods, respectively.

Research and development  expenses and software  construction  amortization  was
$26,445  for the  current  period  versus  $53,989  for the prior  period.  This
decrease  was due to less  amortization  expense  as a result of no  capitalized
software  construction and product  enhancement costs during the past year and a
decline  in  Medallion   research  and   development   expenses.   See  Software
Construction and Product Development under Liquidity and Capital Resources.

Interest  expense for the three  months  ended June 30,  1999 was $1,717  versus
$2,384 for the same period  ended June 30, 1998.  This  decrease was due to less
borrowings during the current year.

Income  tax  expense  was $9,730  for the  current  period 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 at June 30,  1999 was  $32,503.  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  $748,371 at March 31,
1999 to a negative  $775,970  at June 30,  1999  resulting  in a decrease in the
current  ratio from .41 to .38.  The decline  was due mainly to a  reduction  in
accounts receivable.

The  Company's  cash flows from  operations  amounted  to  $39,707.  Payments on
long-term debt totaled $10,573 for the three months ended June 30, 1999.

Although  the Company had an  operating  profit  during the current  three month
period,  the Company continues to experience cash flow problems.  The Company is
seeking  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

Item 5:   Other Information

On June 29, 1999,  the Company  extended its current  facilities  lease  through
August 31, 2001. The monthly rent increased from the current amount of $4,604 to
$4,685 effective  September 1, 1999. All other terms and conditions remained the
same.


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:  August 6, 1999