##### Table of Contents



UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-QSB
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2007
 o
    
    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 000-25555
 Veridien Corporation
  Delaware
    
    59-3020382(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (IRS Employer Identification No.)7600 Bryan Dairy Road, Suite F, Largo, Florida
    
    33777-1433(Address of principal executive offices)
    
    (Zip Code)
 
   þ o
  o þ
   o þ




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##### 



TABLE OF CONTENTS
  PagesPART I FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Notes to Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis
    
    
    11Item 3.
    
    Controls and Procedures
    
    
    19PART II OTHER INFORMATIONItem 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 5.
    
    Other Information
    
    
    20Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    21EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  2




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Veridien Corporation
and Subsidiaries
 
 Assets
    
    September 30, 2007
    
    
    December 31, 2006Current assets:Cash
    
    $
    174,847
    
    
    $
    185,656Marketable securities
    
    
    24,230
    
    
    
    37,476Accounts receivable, net of allowance of $25,868 and $86,077
    
    
    173,427
    
    
    
    620,145Inventory
    
    
    586,072
    
    
    
    499,700Prepaid expenses and other current assets
    
    
    49,792
    
    
    
    77,420Total current assets:
    
    
    1,008,368
    
    
    
    1,420,397Property and equipment, net of accumulated
depreciation of $432,670 and $425,286
    
    
    33,305
    
    
    
    35,970Other assets:Patents, net of accumulated amortization of
$520,131 and $516,298
    
    
    507,545
    
    
    
    410,136Goodwill
    
    
    1,142,285
    
    
    
    905,516Security deposits
    
    
    5,695
    
    
    
    8,283Total Assets:
    
    $
    2,697,198
    
    
    $
    2,780,302
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##### Table of Contents

\

Veridien Corporation
And Subsidiaries
 
 September
    
    
    DecemberLiabilities and Shareholders Equity
    

30, 2007
    
    
    31, 2006Current liabilities:Notes payable
    
    $
    57,119
    
    
    $
    92,325Notes
payable  related party
    
    
    -0-
    
    
    
    145,000Current portion of convertible debentures, net of debt discount
of $4,419 and $7,071 at September 30, 2007 and December 31, 2006
    
    
    204,581
    
    
    
    201,929Current
portion of convertible debentures  related party
    
    
    275,000
    
    
    
    150,000Accounts payable
    
    
    349,035
    
    
    
    632,161Accounts
payable  related party
    
    
    414,031
    
    
    
    93,406Accrued liabilities
    
    
    162,812
    
    
    
    195,975Accrued liabilities  related party
    
    
    128,350
    
    
    
    125,183Total current liabilities:
    
    
    1,590,928
    
    
    
    1,635,979Long-term liabilities:Convertible debentures
    
    
    50,000
    
    
    
    50,000Total liabilities:
    
    
    1,640,928
    
    
    
    1,685,979Minority interest
    
    
    111,298
    
    
    
    100,790Shareholders equity:Series 2006-A preferred stock, $.001 par value, 300,000
authorized, and 200,607
issued and outstanding at
September 30, 2007 and
December 31, 2006
    
    
    201
    
    
    
    201Series 2006-B preferred stock,
$.001 par value,
1,200,000 authorized, and
993,722 and 943,746
issued and outstanding at
September 30, 2007
and December 31, 2006
    
    
    994
    
    
    
    944Series 2006-C preferred stock, $.001 par value,
0 authorized, and 0
issued and outstanding at
September 30 ,2007 and
December 31, 2006
    
    
    -0-
    
    
    
    -0-Common Stock  $.001 par value; 800,000,000 shares authorized,
262,222,448 and
253,840,560 issued and
outstanding at September
30, 2007 and December 31, 2006
    
    
    262,222
    
    
    
    253,841Cumulative foreign exchange adjustment
    
    
    -0-
    
    
    
    (25,757
    )Additional paid-in capital
    
    
    42,813,402
    
    
    
    41,335,741Accumulated deficit
    
    
    (40,571,437
    )
    
    
    (37,756,791
    )Current period profit (loss)
    
    
    (1,560,410
    )
    
    
    (2,814,646
    )Total shareholders equity:
    
    
    944,972
    
    
    
    993,533Total Liabilities and Shareholders Equity:
    
    $
    2,697,198
    
    
    $
    2,780,302
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Veridien Corporation
and Subsidiaries
 
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    341,560
    
    
    $
    461,517
    
    
    $
    1,609,191
    
    
    $
    881,694Operating costs and expenses:Cost of revenue
    
    
    159,052
    
    
    
    355,204
    
    
    
    1,028,778
    
    
    
    598,808General, selling, and
administrative
    
    
    404,909
    
    
    
    264,254
    
    
    
    1,717,882
    
    
    
    717,403Research and development
    
    
    161,747
    
    
    
    110,726
    
    
    
    506,163
    
    
    
    360,527725,708
    
    
    
    730,184
    
    
    
    3,252,823
    
    
    
    1,676,738Other income (expense):Interest expense
    
    
    (18,615
    )
    
    
    (181,445
    )
    
    
    (63,046
    )
    
    
    (504,672
    )Unrealized gain (loss)
on investments
    
    
    (1,820
    )
    
    
    (54,890
    )
    
    
    (13,247
    )
    
    
    (213,169
    )Interest income
    
    
    2,457
    
    
    
    2,534
    
    
    
    8,254
    
    
    
    5,095Dividend income
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    125,914(17,978
    )
    
    
    (233,801
    )
    
    
    (68,039
    )
    
    
    (586,832
    )Net income (loss) before minority interest
    
    
    (402,126
    )
    
    
    (502,468
    )
    
    
    (1,711,671
    )
    
    
    (1,381,876
    )Minority interest in Mycosol loss
    
    
    39,726
    
    
    
    38,914
    
    
    
    151,261
    
    
    
    148,222Net income (loss)
    
    $
    (362,400
    )
    
    $
    (463,554
    )
    
    $
    (1,560,410
    )
    
    $
    (1,233,654
    )Deemed dividend on preferred stock
    
    
    -0-
    
    
    
    -0-
    
    
    
    (96,625
    )
    
    
    -0-Net (loss) attributable to common
shareholders
    
    $
    (362,400
    )
    
    $
    (463,554
    )
    
    $
    (1,657,035
    )
    
    $
    (1,233,654
    )Weighted average common shares
outstanding  basic and diluted
    
    
    262,128,659
    
    
    
    239,748,419
    
    
    
    260,176,821
    
    
    
    232,315,664Net loss attributable to common
shareholders per share 
basic and diluted
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    (.01
    )
    
    $
    (.01
    )
  5




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Veridien Corporation
and Subsidiaries
 
 2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    (1,560,410
    )
    
    $
    (1,233,654
    )Adjustments to reconcile net income (loss) to net cash
(used) by operating activities:Depreciation and amortization
    
    
    11,217
    
    
    
    10,666Non-cash expense fair market value of warrants issued
    
    
    639,594
    
    
    
    -0-Amortization of debt discount associated with BCF
    
    
    2,652
    
    
    
    4,318Non-cash dividends
    
    
    6,883
    
    
    
    (125,914
    )Unrealized (gain) loss on marketable securities
    
    
    13,247
    
    
    
    213,169Stock issued for services
    
    
    19,615
    
    
    
    25,320Minority
interest in Mycosol
    
    
    (151,261
    )
    
    
    (148,222
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    446,718
    
    
    
    (53,858
    )Inventory
    
    
    (86,372
    )
    
    
    (191,622
    )Prepaid expenses and other current assets
    
    
    27,628
    
    
    
    (37,275
    )Customer deposits
    
    
    -0-
    
    
    
    (15,966
    )Accounts payable  third party
    
    
    (283,126
    )
    
    
    28,841Accounts payable  related party
    
    
    320,625
    
    
    
    99,181Accrued expenses  third party
    
    
    (31,993
    )
    
    
    180,639Accrued expenses  related party
    
    
    3,167
    
    
    
    318,153Net cash provided (used) by operating activities:
    
    
    (621,816
    )
    
    
    (926,224
    )Cash flow from investing activities:Purchase of property and equipment
    
    
    (4,719
    )
    
    
    (319
    )Purchase of additional interest in Mycosol
    
    
    (25,000
    )
    
    
    -0-Increase in patents
    
    
    (101,242
    )
    
    
    (63,375
    )Decrease in security deposits
    
    
    2,588
    
    
    
    (3,789
    )Net cash used by investing activities:
    
    
    (128,373
    )
    
    
    (67,483
    )Cash flow from financing activities:Proceeds from convertible debentures
    
    
    -0-
    
    
    
    780,000Proceeds from preferred stock issuances
    
    
    750,000
    
    
    
    -0-Proceeds on notes payable  third party
    
    
    29,130
    
    
    
    24,944Proceeds on notes payable  related party
    
    
    100,000
    
    
    
    458,000Payments on notes payable  third party
    
    
    (65,507
    )
    
    
    (47,567
    )Payments on notes payable  related party
    
    
    (100,000
    )
    
    
    (72,000
    )Net cash provided by financing activities:
    
    
    713,623
    
    
    
    1,143,377Net effect
of exchange rates on cash
    
    
    25,757
    
    
    
    (25,757
    )Net increase/(decrease) in cash
    
    
    (10,809
    )
    
    
    123,913Cash at beginning of year
    
    
    185,656
    
    
    
    115,493Cash at end of quarter
    
    $
    174,847
    
    
    $
    239,406Non-cash investing and financing activities:Conversion of debt to convertible debentures
    
    $
    125,000
    
    
    $
    1,127,032Conversion of convertible debentures to common stock
    
    
    -0-
    
    
    
    50,000Conversion of preferred stock to common stock
    
    
    277,123
    
    
    
    -0-Conversion of debt to preferred stock
    
    
    20,000
    
    
    
    -0-Issuance of common shares for additional Mycosol interest
    
    
    50,000
    
    
    
    -0-Purchase of Mycosol interest with 9,803,992 in 2006
    
    
    -0-
    
    
    
    392,160
  6




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Veridien Corporation
and
Subsidiaries
 
 Notes to the Unaudited Interim Consolidated Financial Statements at September 30, 2007
  Note A  Stock-Based Compensation
   each
 7




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Note A  Stock-Based Compensation  Continued
    Note B  Consolidation of Variable Interest Entities
 Mycosol, Inc.
       Santius Lifesciences, Inc.
   8




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Note
B  Consolidation of Variable Interest Entities  Continued
  a)
    
    an initial purchase price of 25 million common share
warrants valued at $461,047 (see below). These warrants vest
immediately and have a term of 5 years. The exercise price for 14.2 million of the
warrants is $0.06 per share and the exercise price for 10.8 million of the warrants is
$0.10 per share;b)
    
    additional purchase price of $ 1.071 million, which Lexxec shall use towards the
exercise price of its Veridien warrants and which purchase price shall only be payable at
the time when Santius has entered into initial product transaction(s) with a NPV of not
less than U.S. $6 million (as determined by an independent appraiser); andc)
    
    additional purchase price of $ 1.214 million, which Lexxec shall use towards the
exercise price of its Veridien warrants and which purchase price shall only be payable at
the time when Santius has entered into additional product transaction(s) with a NPV of not
less than U.S.$13 million (as determined by an independent appraiser).
    o
    
    If the Veridien stock price has met or exceeded $0.50 per share for a period of 30
consecutive days, the consideration shall be 40 million Veridien common shares; otherwiseo
    
    the consideration will be $20 million; to be satisfied at Lexxecs unilateral option by
the payment of (i) $20 million cash, or (ii) Veridien common shares with a then current
market value of $20 million
 th
  Note C  Marketable Securities
  9




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Note C  Marketable Securities  Continued
   Note D  Convertible Debentures
     Note E  Preferred Stock
    Note F  Deemed Dividend
  10




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Item 2. Managements Discussion and Analysis
 Third Quarter  September 30, 2007 Compared with September 30, 2006
  Overview
   Ò
 Ò Ò
   11




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Results of Operations
 Third Quarter ended September 30, 2007 vs. Third Quarter ended September 30, 2006
 Third Quarter
    
    
    Percentage ofSeptember 30,
    
    
    Net Revenue2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    341,560
    
    
    $
    461,517
    
    
    
    100
    %
    
    
    100
    %Cost of Revenue
    
    
    159,052
    
    
    
    355,204
    
    
    
    47
    %
    
    
    77
    %Gross Profit
    
    
    182,508
    
    
    
    106,313
    
    
    
    53
    %
    
    
    23
    %Operating Expenses:General, Selling & Administrative
    
    
    404,909
    
    
    
    264,254
    
    
    
    119
    %
    
    
    57
    %Research & Development
    
    
    161,747
    
    
    
    110,726
    
    
    
    47
    %
    
    
    24
    %Loss from Operations
    
    
    (384,148
    )
    
    
    (268,667
    )
    
    
    (112
    )%
    
    
    (58
    )%Other Expense Net
    
    
    (17,978
    )
    
    
    (233,801
    )
    
    
    (5
    )%
    
    
    (51
    )%Net Loss Before Minority Interest
    
    
    (402,126
    )
    
    
    (502,468
    )
    
    
    (118
    )%
    
    
    (109
    )%Minority Interest
    
    
    39,726
    
    
    
    38,914
    
    
    
    12
    %
    
    
    8
    %Net Loss
    
    
    (362,400
    )
    
    
    (463,554
    )
    
    
    (106
    )%
    
    
    (100
    )%Deemed Dividend on Preferred Stock
    
    
    -0-
    
    
    
    -0-
    
    
    
    0
    %
    
    
    0
    %Net Loss
Attributable to Common Shareholders
    
    $
    (362,400
    )
    
    $
    (463,554
    )
    
    
    (106
    )%
    
    
    (100
    )%
 Third Quarter  September 30, 2007 Compared with September 30, 2006
  
    
    Gross revenue from product sales decreased for third quarter
2007 by $119,957, or 26%,
to $341,560 compared with $461,517 in third quarter 2006. We continue active promotion of
our product line through trade-show presentations and direct calls on both existing and
potential customers. Our goal is to continue to expand our product lines and we anticipate
new products, which are scheduled with various releases this year, will generate new
revenue in this and future years. In addition, we continue to pursue strategic alliances
with other corporations that have existing distribution networks. Our goal for these
alliances is to create immediate distribution and fulfillment avenues for our products,
while focusing on our capital resources.
    
    Interest income for third quarter 2007 decreased by $77, or 3% to $2,457 compared with
$2,534 in third quarter 2006.
 12




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
    
    The cost of goods sold from product sales for third quarter
2007 decreased by $196,152
or 55% to $159,052 compared with $355,204 in third quarter 2006. The cost of goods ratio
as a percentage
of product sales was 47% in third quarter 2007 compared to 77% in third quarter 2006. The
decrease in ratio of the cost of goods from product sales as a percentage of sales resulted
primarily from decreased sales of a product mix with improved margins. Profit margins for
product sales were at 53% and 23%, respectively.
    
    General, selling, and administrative expenses for third quarter 2007 increased by
$140,655 or 53% to $404,909 compared with $264,254 during the third quarter 2006.Items within the General, Sales and Administrative Costs category that had increases third
quarter 2007 compared to third quarter 2006 included:
 o
    
    Administrative wages which increased 29% to $49,802 compared with
$38,710. This increase is attributable to the increase in permanent staff versus
contracting staff from outside agencies.o
    
    Selling expenses which increased by 11% to $94,516 compared with
$84,897.o
    
    Professional management compensation expenses which increased by 100%
to $87,500 compared with $-0- . This increase is attributable to compensation
packages for Sheldon Fenton and Kenneth Cancellara.o
    
    Equity based compensation expenses increased by 100% to $33,104
compared with $-0-. These expenses are non-cash and are the fair market value of
the warrants issued as calculated using the Black-Scholes model. They are
attributable (i) $14,336 for options issued to third party
consultants; and (ii)
$18,768 for options issued under the new compensation packages for Sheldon Fenton
and Kenneth Cancellara. (see Note A & B to the consolidated
financial statements).
 Decreases that affected general and administrative expenses were associated with
professional legal, consulting and accounting fees for third quarter 2007 that decreased by
8% to $53,628 compared with $58,255 in third quarter 2006. This decrease is primarily
attributable to the combination of decreased costs in legal fees by 73% and an increase in
consulting fees of 25%.
    
    Research and development expenses for third quarter 2007 increased by $51,021, or 46% to
$161,747 compared with $110,726 in third quarter 2006. This represents $31,623 for the
Company, $14,878 for Santius Lifesciences Inc. and $115,246 for
Mycosol, Inc. for the third quarter 2007 as compared to $25,444 for the Company and $85,282
for Mycosol, Inc. for the same period of 2006. Mycosol,
Inc. currently has one issued patent and seven patents pending. The Company continues to
research and focus on broadening the range of claims they can assert on existing products
and on testing new products for commercialization.
    
    Interest expense for third quarter 2007 decreased by $162,830, or 90% to $18,615
compared with $181,445 in third quarter 2006. The decrease in interest expense was due
primarily to a decrease in debt from the capital reorganization in fourth quarter 2006.
Also the Company expensed $884 in convertible debenture discount per Black Scholes
calculations in third quarter 2007 compared to $1,717 in third quarter 2006.
    
    During third quarter 2007 the Company recorded an unrealized loss in the amount of
$1,820 which reflects a decline in the FMV of 370,495 Healthnostics, Inc. (HNSO) shares
(note the symbol was changed from HNST to HNSO on March 15, 2007) from June 30, 2007 at
$.015 to $.013 at September 30, 2007; and a decline in the FMV of 431,404 Standard Global
Holding
 13




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##### Table of Contents



Group (SNDH) shares of $.048 at June 30, 2007 to $.045 at September 30, 2007.
During third quarter 2006 the Company recorded an unrealized loss in the amount of $54,890
which reflects the decline in the FMV of 719,507 H-Quotient, Inc (HQNT) shares from June
30, 2006 at $.05 to $.01 at September 30, 2006; a decline in the FMV of 431,404 Standard
Global Holding Group (SNDH) shares from June 30, 2006 at $.16 to $.10 at September 30,
2006; and a decline in the
FMV of 10,741 shares of Healthnostics, Inc. (HNST) shares from June 30, 2006 at $.04 to
$.019 at September 30, 2006.
    
    Net (loss) decreased to a net loss before Minority
interest in Mycosol to ($402,126) for
third quarter 2007 from a net loss of ($502,468) in third quarter 2006. Net (loss)
decreased to a net loss after Minority interest in Mycosol to
($362,400) for third quarter
2007 from a net loss of ($463,554) in third quarter 2006. Net (loss) attributable to
common shareholders as of third quarter 2007 was ($362,400) and ($463,554) in third quarter
2006. There were no deemed dividends in third quarter 2007 and the same period 2006.
 Nine Months ended September 30, 2007 vs. Nine Months ended September 30, 2006
 Nine Months ended
    
    
    Percentage ofSeptember 30,
    
    
    Net Revenue2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    1,609,191
    
    
    $
    881,694
    
    
    
    100
    %
    
    
    100
    %Cost of Revenue
    
    
    1,028,778
    
    
    
    598,808
    
    
    
    64
    %
    
    
    68
    %Gross Profit
    
    
    580,413
    
    
    
    282,886
    
    
    
    36
    %
    
    
    32
    %Operating Expenses:General, Selling & Administrative
    
    
    1,717,882
    
    
    
    717,403
    
    
    
    107
    %
    
    
    81
    %Research & Development
    
    
    506,163
    
    
    
    360,527
    
    
    
    31
    %
    
    
    41
    %Loss from Operations
    
    
    (1,643,632
    )
    
    
    (795,044
    )
    
    
    (102
    )%
    
    
    (90
    )%Other Expense Net
    
    
    (68,039
    )
    
    
    (586,832
    )
    
    
    (4
    )%
    
    
    (67
    )%Net Loss Before Minority Interest
    
    
    (1,711,671
    )
    
    
    (1,381,876
    )
    
    
    (106
    )%
    
    
    (157
    )%Minority Interest
    
    
    151,261
    
    
    
    148,222
    
    
    
    9
    %
    
    
    17
    %Net Loss
    
    
    (1,560,410
    )
    
    $
    (1,233,654
    )
    
    
    (97
    )%
    
    
    (140
    )%Deemed Dividend on Preferred Stock
    
    
    (96,625
    )
    
    
    -0-
    
    
    
    (6
    )%
    
    
    0
    %Net Loss
Attributable to Common Shareholders
    
    $
    (1,657,035
    )
    
    $
    (1,233,654
    )
    
    
    (103
    )%
    
    
    (140
    )%
 Nine-months ended September 30, 2007 Compared with Nine Months Prior Year ended Nine 30, 2006
  
    
    Gross revenue from product sales increased for the first nine months of 2007 by
$727,497, or 83%, to $1,609,191 compared with $881,694 in 2006. We continue active
promotion of our product line through trade-show presentations and direct calls on both
existing and potential customers. Our goal is to continue to expand our product lines and
we anticipate new products, which are scheduled with various releases this year, will
generate new revenue in this and future years. In addition, we continue to pursue
strategic alliances with other corporations that have
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existing distribution networks. Our
goal for these alliances is to create immediate distribution and fulfillment avenues for
our products, while focusing on our capital resources.
    
    Interest income for the first nine months of 2007 increased by $3,159 or 62% to $8,254
compared with $5,095 during the same period of 2006. The increase in interest income is
attributed to a higher balance earning interest at higher rates at the bank over the same
period in the prior year.
    
    Dividend income for the first nine months of 2007 decreased by $125,914, or 100% to $-0-
compared with $125,914 in the same period of 2006. The Company received 359,753 common
shares of Standard Global Holdings Group (SNDH) as a dividend during the first nine months
of 2006.
  
    
    The cost of goods sold from product sales for the nine months ended September 30, 2007
increased by $429,970 or 72% to $1,028,778 compared with $598,808 during the same period of
2006. The cost of goods ratio as a percentage of product sales was 64% during the nine
months ended September 30, 2007 compared to 68% in the same period 2006. The decrease in
ratio of the cost of goods from product sales as a percentage of sales resulted primarily
from increased sales and sale of a product mix with improved margins. Profit margins for
product sales were at 36% and 32%, respectively.
    
    General, selling, and administrative expenses for nine months ended September 30, 2007
increased by $1,000,479 or 139% to $1,717,882 compared with $717,403 during the same period
of 2006.Items within the General, Sales and Administrative Costs category that had increases for the
nine months ended September 30, 2007 compared to the nine months ended September 30, 2006
included:
 o
    
    Administrative wages which increased by 5% to $125,953 compared with
$120,378. This increase is attributable to the increase in permanent staff versus
contracting staff from outside agencies for the nine months.o
    
    Public company expenses which increased by 29% to $23,673 compared with
$18,306. This increase is mainly attributable to an increase in the amount of fees
for outside services year to date.o
    
    Selling expenses which increased by 65% to $377,362 compared with
$229,380. This increase is primarily attributable to the increase in sales
consulting services by 99%.o
    
    Professional management compensation expenses which increased by 100%
to $175,000 compared with $-0-. This increase is attributable to compensation
packages for Sheldon Fenton and Kenneth Cancellara.o
    
    Equity based compensation expenses which increased by 100% to $639,594
compared with $-0-. These expenses are non-cash and are the fair market value of
the warrants issued as calculated using the Black-Scholes model. They are
attributable (i) $43,489 for options issued to third party consultants; (ii)
$135,058 for options issued under the new compensation packages for Sheldon Fenton
and Kenneth Cancellara; and (iii) $461,047 for the issuance of warrants for the
purchase of 49.9% of Santius Lifesciences, Inc.(see Note A & B
to the consolidated financial statements).
 Decreases that affected general and administrative expenses were associated with
professional legal, consulting and accounting fees for nine months ended September 30, 2007
that decreased by 2% to $158,041 compared with $161,928 in the same period 2006. This
decrease is primarily
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attributable to the combination of decreased costs in legal fees by
59% and an increase in consulting fees of 24%.
    
    Research and development expenses for the first nine months of 2007 increased by
$145,636, or 40% to $506,163 compared with $360,527 during the same period of 2006. This
represents $90,587 for the Company, $19,286 for Santius Lifesciences Inc. and $396,290
for Mycosol, Inc. for the first nine months of 2007 and $84,758
for the Company and $275,769 for Mycosol, Inc for the
same period of 2006. Mycosol, Inc. currently has one issued patent and seven patents
pending. The Company continues to research and focus on broadening the range of claims
they can assert on existing products and on testing new products for commercialization.
    
    During the first nine months of 2007 the Company recorded an unrealized loss in the
amount of $13,247 which reflects an increase in the FMV of 370,495 HNS0 shares (note the
symbol was changed from HNST to HNSO on March 15, 2007) from December 31, 2006 at $.008 to
$.013 at September 30, 2007, offset by a decline in the FMV of 431,404 SNDH shares from December
31, 2006 at $.08 to $.045 at September 30, 2007. During the first nine months 2006 the
Company recorded a net unrealized loss in the amount of $213,169 which reflects the decline
in the FMV of 719,507 H-Quotient, Inc (HQNT) shares from December 31, 2005 at $.17 to $.01
at September 30, 2006, a decrease in the FMV of 431,404 Standard Global Holding Group
(SNDH) shares of $.24 at December 31, 2005 to $.10 at September 30, 2006, and a decline in
the FMV of 10,741 Healthnostics, Inc. (HNST) shares from December 31, 2005 at $.125 to
$.019 at September 30, 2006.
    
    Interest expense for the first nine months of 2007 decreased by $441,626, or 88% to
$63,046 compared with $504,672 during the same period of 2006. The decrease in interest
expense was due primarily to a decrease in debt from the capital reorganization in fourth
quarter 2006. Also the Company expensed $2,652 in convertible debenture discount per Black
Scholes calculations in the first nine months of 2007 compared to $4,318 in the first nine
months of 2006.
    
    Net (loss) increased to a net loss before Minority interest in Mycosol to ($1,711,671)
for the first nine months of 2007 from a net loss of ($1,381,876) in the same period of
2006. Net (loss) increased to a net loss after Minority interest in Mycosol to
($1,560,410) for the first nine months of 2007 from a net loss of ($1,233,654) in the same
period of 2006. Net (loss) attributable to common shareholders as of the first nine months
of 2007 was ($1,657,035) due to deemed dividends of $96,625 on preferred shares issued and
preferred shares converted in 2007. There were no deemed dividends in 2006 during this
same period.
 Liquidity and Working Capital
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
    
    During the nine months ended September 30, 2007 300,000 common shares were earned by the
Chairman of the Board under the terms of his consulting agreement with the company. The
effective price per share was $0.036.
    
    During the three months ended September 30, 2007 an employee, under the terms of their
employment contract, earned 40,684 common shares. The average effective price per share was
$0.037.
    
    During the second quarter we issued 50,000 Preferred Shares series 2006-B for cash proceeds
of $500,000.
    
    During the first quarter we issued 27,000 Preferred Shares series 2006-B for (i) cash
proceeds of $250,000; and (ii) extinguishment of Notes Payable  related Party (cash proceeds
already received by the company) of $20,000.
    
    During the second quarter the holders of 12,079 Preferred Shares of series 2006-B elected
to convert their Preferred Shares and accrued and unpaid dividends thereon of $3,945.81 into
3,118,395 common shares. As per the terms of the Preferred Shares, the effective price per
share was $0.04.
    
    During the first quarter the holders of 14,945 Preferred Shares of series 2006-B elected to
convert their Preferred Shares and accrued and unpaid dividends thereon of $2,937.53, into
3,809,688 common shares. As per the terms of the Preferred Shares, the effective price per
share was $0.04.
    
    During the second quarter 925,926 common shares were issued to two minority shareholders of
Mycosol, Inc. in exchange for their 50,000 Mycosol common shares and 18,750 Mycosol common
share warrants.
    
    During the second quarter, 89,377 common shares were issued to two employees as part of
their compensation package. The average effective price per share was $0.036.
    
    During the second quarter the following warrants for the purchase of Common Stock were
issued to a consultant providing management services to the company, all with an expiry date
of December 31, 2011: [a] 1,000,000 warrants with an exercise price of $0.06 and vesting (i)
333,333 immediate, (ii) 333,333 on December 31, 2007, and (iii) 333,334 on December 31, 2008;
[b] 1,000,000 warrants with an exercise price of $0.10 and vesting (i) 333,333 on December 31,
2007, and (ii) 666,667 on December 31, 2008.
    
    During the second quarter the following warrants for the purchase of Common Stock were
issued to each of Sheldon Fenton (President & CEO) and Kenneth Cancellara (Executive
Chairman) as part of a compensation package for providing management services to the company,
all with an expiry date of April 1, 2012: [a] 2,500,000 warrants with an exercise price of
$0.06 and immediate vesting; [b] 2,500,000 with an exercise price of $0.10, vesting on
December 31, 2008; and [c] 2,500,000 warrants with an exercise price of $0.10, vesting on
December 31, 2009.
    
    During the second quarter the 25,000,000 Common Stock warrants were issued in exchange for
a 49.9% interest in Santius LifeSciences Inc. The warrants vest immediately and expire on May
12, 2012. The exercise price for 14,200,000 of the warrants is $0.06 and for 10,800,000 of
the warrants is $0.10.
    
    During the first quarter, 65,000 common shares were issued under the companys S8
Registration Statement to two employees in recognition of past performance. The average
effective price per share was $0.041.
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
    
    During the three months ended March 31, 2007, 32,818 common shares were issued under the
companys S8 Registration Statement an employee under the terms of their employment contract.
The average effective price per share was $0.046.
    
    During the first quarter we issued a convertible debenture for extinguishment of Notes
Payable-related Party (cash proceeds already received by the company) of $125,000. This
debenture carries an interest rate of 8%, has a 1-year term and has a conversion rate of
$0.04.
    
    During the nine months ended September 30, 2007, accounts receivable decreased by $446,718
to $173,427 from $620,145 at December 31, 2006. This decrease can be attributed to an
increase in collection on large customer accounts in January 2007.
    
    During the nine months ended September 30, 2007, inventory increased by $86,372 to $586,072
compared with $499,700 at December 31, 2006. This increase can be attributable to large
production schedules in last quarter of 2007.
    
    We plan to utilize our current debt financing arrangements and pursue additional equity and
debt financing while managing cash flow in an effort to provide funds to increase revenues to
support operation, research and development activities. We believe that our long-term success
depends on revenues from operations from product sales and ongoing royalties from
technologies. If such sources of funds are not adequate, we may seek to obtain financing to
meet operating and research expenses from other sources including, but not limited to, future
equity or debt financings.
    
    As of November 1, 2007, we have cash of approximately $211,550 and during November and
December, we expect cash flow of $300,000 from operating activities, private placements and
possible sale of marketable securities. This level of liquidity should be sufficient to
operate the Company for more than 180 days. The Company anticipates increasing sales, reduced
operating expenses, and additional private placement funding will contribute to continuous
operations of the Company.
    
    We anticipate utilizing a portion of our funds to support the working capital requirements
of our anticipated increase in sales and to cover new product development costs for Veridien.
We also anticipate increasing our investment/ownership in Mycosol, Inc.
    
    If disruptions occur in third party vendors that supply raw materials to our contract fill
manufacturers, we may experience the inability to have product inventory for sale to our
customers. Such events could have material adverse effect on Veridien to compete effectively
in the marketplace. We continue to utilize the services of a number of contract fill
manufacturers. These contract fill manufacturers have been successful in locating sources of
our commonly available raw materials and converting these into finished products and we
believe that use of these contract fill manufacturers will assure us of the timely production
of products.
 Critical Accounting Estimates
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Item 3. Controls and Procedures
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PART
II OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    The following issuances of equity securities (including debt securities immediately
convertible into equity) without registration under the Securities Act of 1933 occurred
during the Quarter ended September 30, 2007:Common StockAt September 30, 2007, the Chairman of the Board was entitled to the issuance of 100,000
common shares under the terms of his consulting agreement with the company. These shares
were accounted for in the third quarter but not issued until October 3, 2007. This issuance
is considered exempt from registration by reason of Section 4(2) of the Securities Act.At September 30, 2007, one employee was entitled to the issuance of 40,684 common shares as
part of his compensation package. These shares were accounted for in the third quarter but
not issued until October 3, 2007. This issuance is considered exempt from registration by
reason of Section 4(2) of the Securities Act.(b)
    
    Not applicable.(c)
    
    Not applicable.(d)
    
    During the quarter ended September 30, 2007 the Company did not repurchase any of its
equity securities.
 
 Item 5. Other Information
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Item 6. Exhibits and Report on Form 8-K
 A.
    
    Exhibits
 (a)
    
    Exhibit 31.1  Rule 13a-14(a)/15d-14(a) Certification,
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(b)
    
    Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Certification,
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(c)
    
    Exhibit 32.1  Certification Pursuant to 18 U.S.C. Section
1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(d)
    
    Exhibit 32.2  Certification Pursuant 18 U.S.C. Section 1350,
as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 B.
    
    Report on Form 8-KDuring the third quarter of 2007 there were no reports on Form 8-K issued by the
Company.
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SIGNATURES
  Veridien Corporation(Registrant)Date: November 14, 2007
    
    By
    
    /s/ Sheldon C. FentonSheldon C. FentonChief Executive OfficerDate: November 14, 2007
    
    By
    
    /s/ Russell Van ZandtRussell Van ZandtChief Financial Officer & Chairman
 22