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UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-QSB/A
 (Amendment No.1)
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2005
 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.)
 2875 MCI Drive, Suite B, Pinellas Park, Florida
    
    33782-6105(Address of principal executive offices)
    
    (Zip Code)
  
   þ o
   o þ




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March 31, 2005
    
    
    March 31, 2005
    
    
    Dec 31, 2005
    
    
    Dec 31, 2004Previously
    
    
    Restated
    
    
    Previously
    
    
    Restatedreported
    
    
    
    
    
    reportedBALANCE SHEETCurrent Assets
    
    
    1,187,454
    
    
    
    1,375,954
    
    
    
    873,219
    
    
    
    1,111,577Non-current Portion of Marketable Securities
    
    
    110,000
    
    
    
    0
    
    
    
    108,793
    
    
    
    0Total Assets
    
    
    1,932,353
    
    
    
    2,010,853
    
    
    
    1,306,965
    
    
    
    1,436,530Current Liabilities
    
    
    2,236,583
    
    
    
    2,075,729
    
    
    
    2,202,347
    
    
    
    2,041,492Additional Paid-In Capital
    
    
    31,631,626
    
    
    
    31,800,983
    
    
    
    31,225,088
    
    
    
    31,394,443Current Period (Loss)
    
    
    (419,607
    )
    
    
    (470,675
    )
    
    
    (757,793
    )
    
    
    (636,723
    )Total
Liabilities & Shareholders Deficit
    
    
    1,932,353
    
    
    
    2,010,853
    
    
    
    1,306,965
    
    
    
    1,436,530INCOME STATEMENTGeneral,
Sales & Admin Expenses
    
    
    261,962
    
    
    
    263,171Unrealized (Loss) on Investments
    
    
    (30,741)
    
    
    
    (80,600
    )Net (Loss) before Minority Interest
    
    
    (571,906
    )
    
    
    (622,974
    )Net Income (Loss)
    
    
    (419,607
    )
    
    
    (470,675
    )
  TABLE OF CONTENTS
 PagesPART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Notes to Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis
    
    
    8Item 3. Controls and Procedures
    
    
    16PART II OTHER INFORMATIONItem 6. Exhibits and Report on Form 8-KEx-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32.1 Section 906 CertificationEx-32.2 Section 906 Certification
  (a)
    
    Exhibit 31.1  Rule 13a-14(a)/15d-14(a) Certification, Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    17(b)
    
    Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Certification, Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    17(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
    
    
    17(d)
    
    Exhibit 32.2  Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
    
    
    17
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##### Table of Contents



PART 1
 FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Veridien Corporation
and Subsidiaries
   (Unaudited)
    
    
    (Audited)March 31, 2005
    
    
    December 31, 2004Current assets:Cash
    
    $
    546,359
    
    
    $
    126,027Marketable securities
    
    
    316,483
    
    
    
    397,083Accounts receivable, net of allowance
of $21,640 and $12,640
    
    
    102,345
    
    
    
    180,678Inventory
    
    
    358,265
    
    
    
    331,702Prepaid expenses and other current assets
    
    
    52,502
    
    
    
    76,087Total current assets
    
    
    1,375,954
    
    
    
    1,111,577Property and equipment, net of
accumulated depreciation of $408,908 and $397,250
    
    
    25,794
    
    
    
    27,648Other assets:Patents, net of accumulated amortization
of $507,355 and 506,077,
respectively
    
    
    191,105
    
    
    
    176,305Goodwill
    
    
    410,000
    
    
    
    110,000Security deposits
    
    
    8,000
    
    
    
    11,000Total Assets:
    
    $
    2,010,853
    
    
    $
    1,436,530
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##### Table of Contents



Veridien Corporation
and Subsidiaries
   (Unaudited)
    
    
    (Audited)March 31, 2005
    
    
    December 31, 2004Liabilities and Deficit in Shareholders EquityCurrent liabilities:Note payable
    
    
    190,187
    
    
    
    289,347Current portion of convertible debentures
    
    
    628,291
    
    
    
    449,000Accounts payable
    
    
    397,509
    
    
    
    275,504Accrued liabilities
    
    
    859,742
    
    
    
    1,027,641Total current liabilities:
    
    
    2,075,729
    
    
    
    2,041,492Long term liabilities:Convertible debentures
    
    
    3,527,682
    
    
    
    3,506,973Total liabilities:
    
    
    5,603,411
    
    
    
    5,548,465Minority interest
    
    
    570,061
    
    
    
    -0-Shareholders deficit:Undesignated preferred stock, $.001 par value, 25,000,000
shares authorizedConvertible redeemable preferred stock,
$10 par value, 100,000 authorized; 6,000 and 6,000
issued and outstanding at March 31, 2005 and
December 31, 2004
    
    
    60,000
    
    
    
    60,000Series B preferred stock,
$.001 par value, 245,344 authorized, 174,219
issued and outstanding at March 31, 2005 and December 31, 2004
    
    
    175
    
    
    
    175Common stock  $.001 par value; 300,000,000 shares
authorized, 227,820,898 and 214,369,622 issued
and outstanding at March 31, 2005 and December 31, 2004
    
    
    227,821
    
    
    
    214,370Additional paid-in capital
    
    
    31,800,983
    
    
    
    31,394,443Accumulated deficit
    
    
    (35,780,923
    )
    
    
    (35,144,195
    )Current period profit/(loss)
    
    
    (470,675
    )
    
    
    (636,728
    )Total shareholders deficit:
    
    
    (4,162,619
    )
    
    
    (4,111,935
    )Total Liabilities and Shareholders Deficit:
    
    $
    2,010,853
    
    
    $
    1,436,530
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Veridien Corporation
and Subsidiaries
 
 
 March 31, 2005
    
    
    March 31, 2004Revenue
    
    $
    317,378
    
    
    $
    577,069Operating costs and expenses:Cost of revenue
    
    
    226,104
    
    
    
    84,465General, selling, and administrative
    
    
    263,171
    
    
    
    249,365Research and development
    
    
    249,587
    
    
    
    41,881738,862
    
    
    
    375,711Other income (expense):Interest expense
    
    
    (121,334
    )
    
    
    (98,824
    )Realized gain (loss) on investments
    
    
    -0-
    
    
    
    (8,445
    )Unrealized gain (loss) on investments
    
    
    (80,600
    )
    
    
    295,402Interest income
    
    
    444
    
    
    
    269(201,490
    )
    
    
    188,402Net income (loss) before minority interest
    
    
    (622,974
    )
    
    
    389,760Minority interest in Mycosol loss
    
    
    152,299
    
    
    
    -0-Net income (loss)
    
    $
    (470,675
    )
    
    $
    389,760Net income (loss) per common share
    
    ($
    0.002
    )
    
    $
    0.002Weighted average share outstanding
    
    
    225,734,619
    
    
    
    207,275,534
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Veridien Corporation
and Subsidiaries
 2005
    
    
    2004Cash flows from operating activities:Net income (loss)
    
    $
    (470,675
    )
    
    $
    389,760Adjustments to reconcile net income (loss) to net cash
(used) by operating activities:Depreciation and amortization
    
    
    11,658
    
    
    
    4,699Stock issuances for services
    
    
    6,600
    
    
    
    99,481Revenue  non-cash (stock)
    
    
    
    
    
    
    (456,000
    )Realized (gains) losses on marketable securities
    
    
    
    
    
    
    8,445Unrealized (gains) losses on marketable securities
    
    
    80,600
    
    
    
    (295,402
    )Proceeds from sale of marketable securities
    
    
    
    
    
    
    244,214Minority interest
    
    
    (152,299
    )
    
    
    Changes inMarketable securities
    
    
    
    
    
    
    Accounts receivable
    
    
    78,333
    
    
    
    (2,162
    )Inventory
    
    
    (26,563
    )
    
    
    13,560Other current assets
    
    
    23,585
    
    
    
    19,105Accounts payable
    
    
    122,005
    
    
    
    (134,933
    )Accrued expenses
    
    
    88,364
    
    
    
    86,306Due to stockholders
    
    
    
    
    
    
    516Net cash (used) by operating activities:
    
    
    (238,392
    )
    
    
    (22,411
    )Cash flow from investing activities:Purchase of property and equipment
    
    
    (9,805
    )
    
    
    Increase in patents
    
    
    (14,800
    )
    
    
    Decrease in deposits
    
    
    3,000
    
    
    
    Investment in unconsolidated subsidiary (Mycosol)
    
    
    
    
    
    
    (75,000
    )Net cash (used) by investing activities:
    
    
    (21,605
    )
    
    
    (75,000
    )Cash flow from financing activities:Proceeds from Mineola advance
    
    
    500,000
    
    
    
    Proceeds from convertible debentures
    
    
    200,000
    
    
    
    330,000Payments on notes payable
    
    
    (19,671
    )
    
    
    (66,036
    )Net cash provided by financing activities:
    
    
    680,329
    
    
    
    263,964Net increase/(decrease) in cash
    
    
    420,332
    
    
    
    166,553Cash at beginning of quarter
    
    
    126,027
    
    
    
    101,506Cash at end of quarter
    
    $
    546,359
    
    
    $
    268,059Non-cash investing and financing activities:Conversion of convertible debentures to common stock
    
    $
    113,489
    
    
    $
    25,000Payment of accrued interest with Mycosol warrants
    
    
    222,360Purchase of Mycosol interest with 6,000,000 shares
of Veridien common stock
    
    
    300,000
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Veridien Corporation
and
Subsidiaries
 
 Notes to the Unaudited Interim Consolidated Financial Statements at March 31, 2005
  Note A  Consolidation of Variable Interest Entity  Mycosol Investment
   Note B  Convertible Debentures
  7




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Item 2. Managements Discussion and Analysis
 First Quarter  March 31, 2005 Compared with March 31, 2004
  Overview
   Ò
 Ò Ò
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and and
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Result of Operations
 First Quarter ended March 31, 2005 vs. First Quarter ended March 31, 2004
 First Quarter
    
    Percentage ofMarch 31
    
    Gross Revenue2005
    
    2004
    
    2004
    
    2003Revenue
    
    $
    317,378
    
    
    $
    577,069
    
    
    
    100
    %
    
    
    100
    %Cost of Revenue
    
    
    226,104
    
    
    
    84,465
    
    
    
    71
    %
    
    
    15
    %Gross Profit
    
    
    91,274
    
    
    
    492,604
    
    
    
    29
    %
    
    
    85
    %Operating Expenses:General, Selling &
Administrative
    
    
    263,171
    
    
    
    249,365
    
    
    
    83
    %
    
    
    43
    %Research & Development
    
    
    249,587
    
    
    
    41,881
    
    
    
    79
    %
    
    
    7
    %Other Income (Expense) Net
    
    
    (201,490
    )
    
    
    188,402
    
    
    
    (63
    )%
    
    
    33
    %Net Income (Loss) Before
Minority Interest
    
    
    (622,974
    )
    
    
    389,760
    
    
    
    (196
    )%
    
    
    68
    %Minority Interest
    
    
    152,299
    
    
    
    -0-
    
    
    
    48
    %
    
    
    0
    %Net Income
(Loss) Before Taxes
    
    $
    (470,675
    )
    
    $
    389,760
    
    
    
    (148
    )%
    
    
    68
    %Income Taxes
    
    
    -0-
    
    
    
    -0-
    
    
    
    0
    %
    
    
    0
    %Net Income (Loss)
    
    $
    (470,675
    )
    
    $
    389,760
    
    
    
    (148
    )%
    
    
    68
    %
  
    
    Gross revenue from product sales increased for first quarter 2005
by $196,309 or 162% to $317,378 compared with $121,069 in first
quarter 2004. This increase can be attributed to the fulfillment
of an order to Dupont. Gross revenue from licensing and service
fees decreased for first quarter 2005 by $456,000 or 100% to $-0-
compared with $456,000 in first quarter 2004. During first
quarter 2004 the Company signed an agreement with H-Quotient, Inc.
(HQNT) which involves the sale of product, licensing and service
fees. 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. We have recently begun
expanding our revenue base to include not only sale of our
proprietary products but also the sale of licensing rights
relating to our existing and/or new technology, as well as service
fees. We intend to continue to broaden this initiative from new
technology created by Mycosol including their seven patents
pending.
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
    
    During the first quarter 2004, the Company recorded an unrealized
gain in the amount of $295,402 which reflects the increase in the
FMV of 301,431 HQNT shares from $.72 to $1.70 at March 31, 2004.
    
    Interest income for first quarter 2005 increased by $175 or 65% to
$444 compared with $269 in first quarter 2004.
  
    
    The cost of revenue for the first quarter increased as a percentage of total revenue to
71% in 2005 from 15% in 2004. The cost of goods sold from products sales for first
quarter 2005 increased by $152,042 or 205% to $226,104 compared with $74,062 in first
quarter 2004. This can be attributed to an increase in product sales of 162% for the same
period. The cost of goods ratio as a percentage of product sales was 71% in first quarter
2005 compared to 61% in first quarter 2004. The increase in ratio of the cost of goods
from product sales as a percentage of sales resulted primarily from sale of a product mix
with decreased margins due to increases in raw material costs passed on by our suppliers.
The cost of revenue from licensing and service fees for first quarter 2005 decreased by
$10,403 or 100% to $-0- compared with $10,403 in first quarter 2004. The cost of revenue
as a percentage of licensing and revenue fees was 2% for first quarter 2004. The Company
continues to work to improve margins with the introduction of new products, and to provide
licensing and service fees for Veridiens patented and unique products.
    
    General, selling, and administrative expenses for first quarter 2005 increased by
$13,806 or 6% to $263,171 compared with $249,365 in first quarter 2004. Increases that
affected general and administrative expenses were associated with professional public
company, legal, consulting and accounting fees for first quarter 2005 that increased by 31%
to $68,194 compared with $52,179 in first quarter 2004. Increases in general and
administrative costs were associated with insurance fees for first quarter 2005 that
increased by 13% to $22,161 compared with $19,538 in first quarter 2004. Increases that
affected general and administrative costs were associated with rent expense for first
quarter 2005 that increased by 8% to $6,347 compared with $5,864 in first quarter 2004.
Decreases in general and administrative costs were associated with sales and marketing
expenses for first quarter 2005 that decreased by 3% to $100,391 compared with $103,236 in
first quarter 2004.
    
    Research and development expenses for first quarter 2005 increased by $207,706 or 496%
to $249,587 compared with $41,881 in first quarter 2004. This represents $27,868 for the
Company and $221,719 from consolidation of expenses for the VIE  Mycosol, Inc. with
respect to their development of their 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 first quarter 2004, the Company sold 358,869 HQNT shares and realized a loss of
$8,445 due to the decline in the FMV of the stock from December 31, 2003 at $.72.
    
    During first quarter 2005, the Company recorded an unrealized loss in the amount of
$80,600 which reflects the decline in the fair market value of 701,506 HQNT common
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shares from $.55 to $.45 and a decline in the fair market value of 10,741 Healthnostics,
Inc. (HNST) common shares from $.13 to $.075 at March 31, 2005.
    
    Interest expense for first quarter 2005 increased by $22,510 or 23% to $121,334 compared
with $98,824 in first quarter 2004. The increase in interest expense was due primarily to
the increase in Convertible Debentures and continuing current debt financing arrangements.
    
    Net income (losses) increased to a net loss before Minority interest in Mycosol to
$622,974 for first quarter 2005 from a net income of $389,760 for first quarter 2004 Net
income (losses) increased to a net loss after Minority interest in Mycosol to $470,675 for
first quarter 2005 from a net income of $389,760 for first quarter 2004 .
 Liquidity and Working Capital
  
    
    During the first quarter of 2005 we issued 2 convertible debentures for cash proceeds of
$200,000. These debentures carry interest rates of 8%, have terms of 3 years and have
conversion rates of $0.051.
    
    During the three months ended March 31, 2005, 29,419 common shares were issued under the
companys S8 Registration Statement to an employee under the terms of their employment
contract. The average effective price per share was $0.05.
    
    During the first quarter of 2005 100,000 common shares were issued to the Chairman of
the Board under the terms of his consulting agreement with the company. The effective
price per share was $5,100.
    
    During the first quarter $110,000 and 6,000,000 shares of common stock were issued to
the three Founding Shareholders of Mycosol in exchange for 687,500 shares of Mycosol Common
Stock.
    
    During the first quarter 2005 $113,489 of the Loan and Security Agreement principal was
converted by the holders to 0- shares of Series B Preferred Stock and 7,321,857 shares of
Common Stock.
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
    
    During the first quarter 2005 we sold 458,333 common shares of Mycosol, Inc. to an
unrelated third party for cash proceeds of $500,000.
    
    During the first quarter 2005 we invested $325,000 in preferred A Stock of Mycosol,
Inc..
    
    During the three months ended March 31, 2005, accounts receivable decreased by $78,333
to $102,345 from $180,678 at December 31, 2004.
    
    During the three months ended March 31, 2005, inventory increased by $26,563 to $358,265
compared with $331,702 at December 31, 2004. This includes Mycosol inventory at $57,485 in
first quarter 2005.
    
    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 May 12, 2005, we have cash of approximately $71,973 and during May and June, 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.
    
    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.
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Item 3. Controls and Procedures
     
    
    At the direction of Management, financial staff attended training provided by the SEC
Institute in June 2005. Attendance at this seminar was designed to ensure staff are
current on changes in SEC policy and requirements. It is the intention of management that
this type of professional development be supported and continued by the Company.
    
    On June 27, 2005 Mr. Russell Van Zandt, Chairman of the Veridien Board of Directors, at
the request of the Audit Committee agreed to take on the additional operational
responsibility of Chief Financial Officer of the Company. Mr. Van Zandt will manage and
oversee the accounting functions of the Company.
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
    
    Management has adopted a policy and procedure whereby financial management, when
dealing with the reporting of transactions that involve complex and unusual accounting
matters, will formally research relevant accounting literature relating to the issues and,
if necessary, retain the services of a qualified certified public accountant, other than
our independent auditor, to assist up with respect to accounting for the transaction(s).
  
 PART II
 OTHER INFORMATION
 
 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-K
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SIGNATURES
  Veridien Corporation(Registrant) Date November 2, 2005
    By
    /s/ Sheldon C. FentonSheldon C. FentonChief Executive Officer Date November 2, 2005
    By

/s/
Russell D. Van ZandtRussell D. Van ZandtChief
Financial Officer      and Chairman 18