<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

[X]      Quarterly Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

         For the quarterly period ended June 30, 2001
                                        -------------

[ ]      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
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

                   Delaware                                 59-3020382
--------------------------------------------------------------------------------
      (State or Other Jurisdiction of          (IRS Employer Identification No.)
       Incorporation or Organization)

2875 MCI Drive, Suite B, Pinellas Park, Florida               33782
--------------------------------------------------------------------------------
   (Address of principal executive offices)                 (Zip Code)

                                 (727) 576-1600
--------------------------------------------------------------------------------
                (Issuer's telephone number, including Area Code)

         Indicate by check mark whether the issuer: (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 issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]



<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                     Pages
                                                                     -----
<S>                                                                  <C>
PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements ......................................    3-6
         Notes to Financial Statements .............................    7-9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations .................................  10-17



PART II  OTHER INFORMATION

Item 1.  Legal Proceedings .........................................  17-18

Item 3.  Defaults Upon Senior Securities ...........................     18

Item 5.  Other Information .........................................     18
</TABLE>








                                       2
<PAGE>   3

PART I FINANCIAL INFORMATION

ITEM 1.
                              FINANCIAL STATEMENTS
                              VERIDIEN CORPORATION
                                AND SUBSIDIARIES

                           Consolidated Balance Sheets
                                   (Unaudited)
                       June 30, 2001 and December 31, 2000

<TABLE>
<CAPTION>
                                                             June 30,      December 31,
                                                               2001            2000
                                                           ------------    ------------
<S>                                                        <C>             <C>
                       Assets

Current Assets:
       Cash                                                $     31,172    $     20,960
       Accounts receivable - trade
       Less allowance for doubtful account of
             $35,540 and $48,000 respectively                   326,538         111,679
       Licensing fees receivable                                    -0-          49,997
       Inventory                                                682,435         191,353
       Note receivable                                           15,000          15,000
       Prepaid expenses and other current assets                 81,736          37,196
                                                           ------------    ------------
             Total current assets                             1,136,881         426,185

Property and equipment:
       Furniture and fixtures                                   391,280         416,655
       Leasehold improvements                                       -0-          85,303
                                                           ------------    ------------
                                                                391,280         501,958
Less accumulated depreciation                                   370,499         456,189
                                                           ------------    ------------
                                                                 20,781          45,769
Other Assets:
       Investment in common stock, cost basis                   400,000         400,000
       Investment in common stock restricted, cost basis        253,500         376,686
       Patents less accumulated amortization
             of $491,403 and $489,594 respectively               22,979          24,788
       Loan costs, less accumulated amortization
             of $77,793 and $77,793 respectively                    -0-             -0-
       Security deposits and other assets                        35,038          33,503
                                                           ------------    ------------
                                                                711,517         834,977
                                                           ------------    ------------
             Total assets                                  $  1,869,179    $  1,306,931
                                                           ============    ============
</TABLE>







               See accompanying notes to the financial statements.




                                       3
<PAGE>   4

                              VERIDIEN CORPORATION
                                AND SUBSIDIARIES

                     Consolidated Balance Sheets - Continued
                                   (Unaudited)
                       June 30, 2001 and December 31, 2000

<TABLE>
<CAPTION>
                                                             June 30,      December 31,
                                                               2001            2000
                                                           ------------    ------------
<S>                                                        <C>             <C>
Liabilities and Deficit in Stockholders' Equity

Current liabilities:
     Current capital lease obligations                     $      7,066    $      7,238
     Note payable                                               554,052         621,840
     Convertible debentures due                                 262,893         372,893
     Accounts payable                                         1,793,436         701,796
     Accrued compensation                                        11,556           3,080
     Accrued interest                                           571,316         490,841
     Other accrued liabilities                                   10,511           9,820
     Customer deposits                                           27,345          25,139
     Due to stockholders                                        169,366         168,850
                                                           ------------    ------------
       Total current liabilities                              3,407,541       2,401,497

Long-term liabilities:
     Capital lease obligations less current                      13,938          17,261
     Convertible debentures                                   1,476,215       1,803,215
                                                           ------------    ------------
        Total long-term liabilities                           1,490,153       1,820,476
                                                           ------------    ------------

        Total liabilities:                                    4,897,694       4,221,973
Deficit in Stockholders' Equity:
    Undesignated preferred stock, $.001 par
        value, 25,000,000 shares authorized Convertible
        redeemable preferred stock, $10 par value,
        100,000 authorized; 6,000 and 6,000 issued
        and outstanding at June 30, 2001 and
        December 31, 2000                                        60,000          60,000
    Series B Preferred Stock, $.001 par value, 245,344
        authorized, 162,841 and 154,163 issued and
        outstanding at June 30, 2001 and
        December 31, 2000                                           163             154
    Common Stock - $.001 par value; 200,000,000 shares
        authorized, 154,224,295 and 140,410,349 shares
        issued and outstanding at June 30, 2001 and
        December 31, 2000                                       154,224         140,411
    Additional paid-in capital                               28,917,946      28,205,587
    Common stock warrants                                        26,399          26,399
    Accumulated deficit                                     (31,342,593)    (29,686,895)
    Current period profit/(loss)                               (839,654)     (1,655,698)
                                                           ------------    ------------
                                                             (3,023,515)     (2,910,042)
    Stock subscriptions receivable                               (5,000)         (5,000)
                                                           ------------    ------------
        Total stockholders' deficit                          (3,028,515)     (2,915,042)
                                                           ------------    ------------
                                                           $  1,869,179    $  1,306,931
                                                           ============    ============
</TABLE>


                 See accompanying notes to financial statements.



                                       4
<PAGE>   5

                              VERIDIEN CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        Three Months Ended                 Six Months Ended
                                                             June 30,                           June 30,
                                                       2001             2000             2001             2000
                                                  -------------    -------------    -------------    -------------
<S>                                               <C>              <C>              <C>              <C>
Sales                                             $     463,673    $     840,879    $     585,890    $     922,346

Operating costs and expenses:
       Cost of sales                                    307,324          712,802          389,043          778,760
       General, selling, and
            administrative                              408,719          373,049          810,477          761,993
       Research and Development                          11,799           45,759           37,146          101,234
                                                  -------------    -------------    -------------    -------------
                                                        727,842        1,131,610        1,236,666        1,641,987
                                                  -------------    -------------    -------------    -------------
Loss from Operations                                   (264,169)        (290,731)        (650,776)        (719,641)

Other income (expense):
       Interest expense                                 (66,424)         (80,400)        (135,006)        (149,744)
       Rental income                                      1,846           26,005            5,351           52,010
       Interest income                                      456            6,377              797           10,222
       Sale of labs and equipment                        85,000              -0-           85,000              -0-
       Sale of cash credits                             129,000              -0-          129,000              -0-
       Loss on disposal of assets                       (21,834)             -0-          (21,834)             -0-
       Write-down in investment in
              common stock, restricted                 (252,186)             -0-         (252,186)             -0-
                                                  -------------    -------------    -------------    -------------
                                                       (124,142)         (48,018)        (188,878)         (87,512)
Loss before elimination of
       minority interest                               (388,311)        (338,749)        (839,654)        (807,153)

Elimination of minority interest                            -0-           (9,166)             -0-           (9,166)
                                                  -------------    -------------    -------------    -------------
Net loss                                          $    (388,311)   $    (347,915)   $    (839,654)   $    (816,319)
                                                  =============    =============    =============    =============
Net loss per common share                         $       (.003)   $      (0.003)   $       (.006)   $      (0.006)

Weight average share outstanding                    148,820,706      125,655,255      147,244,809      125,655,255
</TABLE>







                 See accompanying notes to financial statements.




                                       5
<PAGE>   6

                              VERIDIEN CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

                            For the six months ended
                         June 30, 2001 and June 30, 2000

<TABLE>
<CAPTION>
                                                            June 30,       June 30,
                                                              2001           2000
                                                          -----------    -----------
<S>                                                       <C>            <C>
Cash flows from operating activities:
   Net (loss)                                             $  (839,654)   $  (816,319)
   Adjustments to reconcile net (loss) to net cash
   (used) by operating activities:
     Depreciation and amortization                              8,500         11,388
     Minority Interest                                            -0-          9,166
   (Increase) decrease in:
     Accounts receivable                                     (214,859)      (199,278)
     Note receivable                                              -0-          2,500
     Licensing fees receivable                                 49,997
     Prepaid and other current assets                         (44,540)        (6,353)
     Inventories                                             (491,082)      (196,377)
     Other assets                                             121,651        (52,000)
   Increase (decrease) in:
     Accounts payable and accrued expenses                  1,109,999         47,730
     Due to Stockholders                                          516          1,032
     Customer Deposits                                          2,206         (8,232)
                                                          -----------    -----------
Net cash (used) by operating activities:                     (297,266)    (1,206,743)

Cash flow from investing activities:
   Investment in subsidiaries                                     -0-        (68,502)
   Net purchases and disposal of property and equipment        18,297         (1,694)
                                                          -----------    -----------
Net cash (used) by investing activities                        18,297        (70,196)

Cash flow from financing activities:
   Proceeds from convertible debentures                        85,000      1,332,000
   Net proceeds from borrowings                              (522,000)      (646,218)
   Proceeds from issuance of preferred and common stock       726,181        919,127
                                                          -----------    -----------
Net cash provided by financing activities                     289,181      1,604,909

Net increase/(decrease) in cash                                10,212        327,970

Cash at beginning of year                                      20,960          6,734

Cash at end of quarter                                    $    31,172    $   334,704
                                                          ===========    ===========
</TABLE>




                 See accompanying notes to financial statements.




                                       6
<PAGE>   7

                              VERIDIEN CORPORATION
                                       AND
                                  SUBSIDIARIES

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT JUNE 30,
2001:

These unaudited interim consolidated financial statements and notes to unaudited
interim consolidated financial statements should be read in conjunction with the
financial statements and related footnotes included in the Company's Form 10Ksb
filed with the SEC in March 2001.

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the Company's significant accounting policies consistently applied
in the preparation of the accompanying unaudited interim consolidated financial
statements follows.

1.  PRINCIPLES OF CONSOLIDATION

The accompanying financial statements include the accounts of the company and
its subsidiaries, each of which is wholly-owned. All intercompany balances and
transactions have been eliminated in consolidation.

2.  INVENTORIES

Inventories, consisting primarily of raw materials and finished goods, are
stated at the lower of cost or market. Cost is determined by the first-in,
first-out method. At June 30, 2001, raw materials and finished goods amounted to
approximately $682,435.

3.  RECLASSIFICATION

Certain reclassifications have been made to the December 31, 2000 audited
consolidated financial statements to be in conformity with the June 30, 2001
unaudited interim financial statements.

4.  NET LOSS PER SHARE

Net loss per common share is calculated by dividing the net loss by the weighted
average number of common shares outstanding during the period. Weighted average
number of common shares outstanding is calculated as the sum of the month-end
balances of shares outstanding, divided by the number of months. The weighted
average shares outstanding were 148,820,706 and 125,655,255 for the quarter
ending June 30, 2001 and 2000, respectively. Common stock equivalents (stock
options, warrants, convertible debentures and convertible redeemable preferred
stock) are not included in the weighted average number of common shares because
the effects would be anti-dilutive.



                                       7
<PAGE>   8

NOTE B - REALIZATION OF ASSETS

The accompanying unaudited interim consolidated financial statements of the
Company as of June 30, 2001 and for the three months and six months ended June
30, 2001 and 2000, included herein have been prepared in accordance with the
instructions for Form 10-Qsb under the Securities Exchange Act of 1934, as
amended, and Article 10 of Regulation S-X under the Securities Act of 1933, as
amended. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and regulations
relating to interim financial statements.

In the opinion of management, the accompanying unaudited interim consolidated
financial statements of the Company reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of June 30, 2001, and the results of its operations and its
cash flows for the three months and six months ended June 30, 2001 and June 30,
2000, respectively. The results for the three months and six months ended June
30, 2001 are not necessarily indicative of the expected results for the full
fiscal year or any future period.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Since inception, the Company has incurred losses of approximately $32 million,
resulting primarily from research and development, sales and marketing, and
administrative expenses being substantially in excess of sales revenue.

The Company has a deficit in stockholders' equity of $3 million, a deficit in
working capital of $2.3 million and is experiencing a continuing cash flow
deficiency. Those conditions raise substantial doubt about the Company's ability
to continue as a going concern.

The company plans to utilize its 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 operations, research and
development activities.

In view of the matters described in the preceding paragraphs, recoverability of
a major portion of the recorded asset amounts shown in the accompanying
consolidated balance sheet is dependent upon the continued operations of the
Company and that such operations will be profitable and provide adequate cash
flows. Further, the ability of the Company to continue its operations and
successfully defend itself against potential claims or assessments is dependent
on the ability to obtain additional debt and equity financing, employ cash
management techniques and aggressively market its products.



                                       8
<PAGE>   9

NOTE B - REALIZATION OF ASSETS - CONTINUED

The unaudited interim consolidated financial statements do not contain any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue in existence.

NOTE C - INVESTMENT IN EQUITY AND SALE OF CASH CREDITS

On May 4, 2001 the Company exchanged cash credits with a stated value of
$129,000 for 430,000 shares of restricted common shares of H-Quotient Inc. The
Company recognized $129,000 of other income from this transaction which
represents the fair market value of the assets. The investment in the common
shares was recorded at the cost of $129,000 and has not been recognized as a
marketable security due to the restrictions that exist on its disposition.
Therefore no unrealized gain or loss will be recognized until the restrictions
have expired or the shares are sold.



                                       9
<PAGE>   10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

SECOND QUARTER - JUNE 30, 2001 COMPARED WITH JUNE 30, 2000, AND SIX-MONTHS ENDED
JUNE 30, 2001 COMPARED WITH JUNE 30, 2000

The following discussion and analysis should be read in conjunction with the
financial statements in Part I, Item 1 contained elsewhere in this document.

OVERVIEW

We are a Health Care Company incorporated in Delaware focusing on infection
control and have developed UNIQUE PATENTED PRODUCTS including DISINFECTANTS,
ANTISEPTIC HAND GELS, SKIN CLEANSERS, LENS CARE, FRUIT & VEGGIE WASH and SUN
PROTECTION PRODUCTS.

The flagship product, Virahol(R) Hospital Disinfectant/Cleaner & Instrument
Presoak, is now being marketed as VIRAGUARD(R) Hospital Disinfectant/Cleaner &
Instrument Presoak. VIRAGUARD(R) Hospital Disinfectant/Cleaner & Instrument
Presoak and VIRAGUARD(R) Hospital Surface Disinfectant Towelette are EPA
registered disinfectants designed for effective disinfecting, cleaning and
deodorizing of hard, inanimate nonporous surfaces. VIRAGUARD(R) Antiseptic Hand
Gel and VIRAGUARD(R) Antimicrobial Hand Wipes, which are regulated by the FDA
and utilize Veridien's patented formulation, are effective against germs when
soap and water hand washing is not possible.

Recent product line extensions have included sales of private label canisters
and sunscreen impregnated towelettes being marketed under the SunSwipe(TM)
label.

The Corporation has incurred losses since its incorporation. At June 30, 2001,
the Corporation had an accumulated deficit of $32,182,247. The Corporation has
financed its ongoing research program and business activities through a
combination of sales, equity financing, and debt.



                                       10
<PAGE>   11

RESULTS OF OPERATIONS

    SECOND QUARTER ENDED JUNE 30, 2001 VS. SECOND QUARTER ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                         Second Quarter        Percentage of
                                             June 30,           Net Revenue
                                       2001         2000       2001     2000
<S>                                 <C>          <C>           <C>      <C>
Net Sales                           $ 463,673    $ 840,879     100%     100%
Cost of Goods Sold                    307,324      712,802      66%      85%
Gross Profit                          156,349      128,077      34%      15%

Operating Expenses:
General, Selling & Administrative     408,719      373,049      88%      44%
Research & Development                 11,799       45,759       3%       5%

(Loss) from Operations               (264,169)    (290,731)    (57)%    (35)%

Other Income (Expense) Net           (124,142)     (48,018)    (27)%     (6)%

(Loss) Before Minority Interest      (388,311)    (338,749)    (84)%    (40)%
Elimination of Minority Interest            0       (9,166)      0%      (1)%

Net (Loss) Before Taxes              (388,311)    (347,915)    (84)%    (41)%
Income Taxes                                0            0       0%       0%
Net (Loss)                          $(388,311)   $(347,915)    (84)%    (41)%
</TABLE>

SECOND QUARTER - JUNE 30, 2001 COMPARED WITH JUNE 30, 2000

Consolidated gross revenues for second quarter 2001 decreased by $193,286 or
22%, to $679,975 compared with $873,261 in second quarter 2000.

-    Gross revenue from product sales decreased for second quarter 2001 by
     $377,206, or 45%, to $463,673 compared with $840,879 in second quarter
     2000. During this time, we devoted a substantial amount of effort towards
     implementing our marketing strategy and adding new products for
     distribution. The decrease in sales revenue was due primarily to the
     decrease in the sales of low margin raw material canisters; however, our
     SunSwipe(TM) sales increased by 454% compared to second quarter 2000.

-    Gross rental income for second quarter 2001 decreased by $24,159, or 93% to
     $1,846 compared with $26,005 in second quarter 2000. The Company previously
     subleased a portion of the 38,000 square foot manufacturing facility to a
     medical manufacturer. On May 1, 2001 our company entered into an agreement
     with Vin-Dotco, Inc. to lease 15,000 square feet of their building located
     at 2875 MCI Drive Pinellas Park, Florida 33782. Our lease with our previous
     landlord expired on May 18, 2001 and the company moved into our new
     facility during the second and third weeks of May 2001. The rental
     agreement for our new facility is



                                       11
<PAGE>   12

     for a 19 month period ended December 31, 2002 and the reduction in rent as
     compared to our old facility will result in net savings of in excess of
     $180,000 annually. The new facility has sufficient office and warehouse
     space both to satisfy our current needs and allow for future expansion and
     we will no longer be sub-letting space and earning rental income.

-    Interest income for second quarter 2001 decreased by $5,921 or 93% to $456
     compared with $6,377 in second quarter 2000. The decrease in interest
     income is due primarily to a decreased daily cash balance earning interest.

-    Additionally, other income for second quarter 2001 increased $214,000. An
     amount of $85,000 was recognized for sale of the chemistry and microbiology
     labs and additional manufacturing equipment that was located at the old
     location and was no longer needed at the new location. All testing and
     research is done off site on an as needed basis which lowers cost of
     overhead. An amount of $129,000 was recognized for the sale of cash credits
     with a stated value of $150,500. These credits were exchanged for 430,000
     shares of restricted common shares of H-Quotient, Incorporated (HQNT). The
     cash credits were originally received when the Company sold inventory in
     May 2001 to SGD International Corporation. Currently, a remainder of 23,000
     cash credits still remains with SGD International.

Consolidated gross expenses for second quarter 2001 decreased by $143,724, or
12%, to $1,068,286 compared with $1,212,010 in second quarter 2000.

-    The cost of goods sold for second quarter 2001 decreased by $405,478, or
     57% to $307,324 compared with $712,802 in second quarter 2000. The decrease
     in the cost of sales resulted primarily from decreased sales of 45% over
     the same period of 2000 with an offsetting increase in profit margins on
     specific new products. There was a decrease in the cost of goods ratio as a
     percentage of sales to 66% in second quarter 2001 compared to 85% in second
     quarter 2000. The Company is continuing to work towards decreasing the cost
     of goods ratio as a percentage by improving the product mix with higher
     margins.

-    General, selling, and administrative expenses for second quarter 2001
     increased by $35,670 or 10% to $408,719 compared with $373,049 during the
     same period of 2000. The increases that affected general and administrative
     costs were associated with an increase in administrative personnel for
     second quarter 2001 that increased wage expenses by 102% to $72,429
     compared with $35,906 in second quarter 2000. Additionally, during second
     quarter 2001, sales expenses increased by 92% to $113,035 compared with
     $58,796 in second quarter 2000. Deceases that affected general and
     administrative costs were associated with professional service expenses for
     second quarter 2001 that decreased by 54% to $61,610 compared with $134,203
     in second quarter 2000.

-    Research and development expenses for second quarter 2001 decreased by
     $33,960, or 74% to $11,799 compared with $45,759 in second quarter 2000.
     The decrease can be contributed primarily to the closure and sale of the
     chemistry and microbiology labs in May 2001. The labs and other equipment
     were sold to a foreign manufacturing company for $85,000. The Company has
     all testing and research processed off site on an as needed basis.



                                       12
<PAGE>   13

-    Interest expense for second quarter 2001 decreased by $13,976, or 17% to
     $66,424 compared with $80,400 in second quarter 2000. The decrease in
     interest expense was due primarily to the conversion of various debts and
     accrued interest to equity.

-    Additionally, other expenses for second quarter 2001 increased $274,020. An
     amount of $21,834 was recognized for a loss on sale and disposal of assets
     during the Companies relocation. An amount of $252,186 is recognized as a
     write down of investment in common stock, restricted. The Companies
     investment in restricted common shares of HQNT were valued at fair market
     value as of June 30, 2001.

-    Operating losses increased to $388,311 second quarter 2001 from $347,915 in
     second quarter 2000. This represented a 12% increase in operating losses.



        SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000


<TABLE>
<CAPTION>
                                        Six Months ended       Percentage of
                                             June 30,           Net Revenue
                                       2001         2000       2001     2000
<S>                                 <C>          <C>           <C>      <C>
Net Sales                           $ 585,890    $ 922,346     100%     100%
Cost of Goods Sold                    389,043      778,760      66%      84%
Gross Profit                          196,847      143,586      34%      16%

Operating Expenses:
General, Selling & Administrative     810,477      761,993     138%      83%
Research & Development                 37,146      101,234       6%      11%

(Loss) from Operations               (650,776)    (719,641)   (111)%    (78)%

Other Income (Expense) Net           (188,878)     (87,512)    (32)%     (9)%

(Loss) Before Minority Interest      (839,654)    (807,153)   (143)%    (88)%
Elimination of Minority Interest            0       (9,166)      0%      (1)%

Net (Loss) Before Taxes              (839,654)    (816,319)   (143)%    (89)%
Income Taxes                                0            0       0%       0%
Net (Loss)                          $(839,654)   $(816,319)   (143)%    (89)%
</TABLE>


SIX-MONTHS ENDED JUNE 30, 2001 COMPARED WITH SIX MONTHS PRIOR YEAR ENDED JUNE
30, 2000

Consolidated gross revenues for the six months ended June 30, 2001 decreased by
$178,540, or 18%, to $806,038, compared with $984,578 during the same period of
2000.



                                       13
<PAGE>   14

-    Gross revenue from product sales decreased for the first six months of 2001
     by $336,456, or 36%, to $585,890 compared with $922,346 in 2000. During
     this time, we devoted a substantial amount of effort towards implementing
     our marketing strategy and adding new products for distribution. The
     decrease in sales revenue was due primarily to the decrease in the sales of
     low margin raw material canisters; however, our SunSwipe(TM) sales
     increased by 526% compared to the first six months of 2000.

-    Gross rental income for the six months ended June 30, 2001 decreased by
     $46,659, or 90% to $5,351 compared with $52,010 in the same period of 2000.
     The Company previously subleased a portion of the 38,000 square foot
     manufacturing facility to a medical manufacturer. On May 1, 2001 our
     company entered into an agreement with Vin-Dotco, Inc. to lease 15,000
     square feet of their building located at 2875 MCI Drive Pinellas Park,
     Florida 33782. Our lease with our previous landlord expired on May 18, 2001
     and the company moved into our new facility during the second and third
     weeks of May 2001. The rental agreement for our new facility is for a 19
     month period ended December 31, 2002 and the reduction in rent as compared
     to our old facility will result in net savings of in excess of $180,000
     annually. The new facility has sufficient office and warehouse space both
     to satisfy our current needs and allow for future expansion and we will no
     longer be sub-letting space and earning rental income.

-    Interest income for the first six months of 2001 decreased by $9,425 or 92%
     to $797 compared with $10,222 during the same period of 2000. The decrease
     in interest income is due to a decreased daily cash balance earning
     interest.

-    Additionally, other income for six months of 2001 increased $214,000. An
     amount of $85,000 was recognized for sale of the chemistry and microbiology
     labs and additional manufacturing equipment that was located at the old
     location and was no longer needed at the new location. All testing and
     research is done off site on an as needed basis which lowers cost of
     overhead. An amount of $129,000 was recognized for the sale of cash credits
     with a stated value of $150,500. These credits were exchanged for 430,000
     shares of restricted common shares of H-Quotient, Incorporated (HQNT). The
     cash credits were originally received when the Company sold inventory in
     May 2001 to SGD International Corporation. Currently, a remainder of 23,000
     cash credits still remains with SGD International.

Consolidated gross expenses for the first six months of 2001 decreased by
$146,039, or 8%, to $1,645,692 compared with $1,791,731 during the same period
of 2000.

-    The cost of goods sold for the six months ended June 30, 2001 decreased by
     $389,717, or 50% to $389,043 compared with $778,760 during the same period
     of 2000. The decrease in the cost of sales resulted primarily from
     decreased sales at 36% over the same period of 2000 with an offsetting
     increase in profit margins on specific new products. There was a decrease
     in the cost of goods ratio as a percentage of sales to 66% during the
     current year 2001 compared to 84% in the same period of 2000. The Company
     is continuing to work towards decreasing the cost of goods ratio as a
     percentage by improving the product mix with higher margins.

-    General, selling, and administrative expenses for six months ended June
     30,2001 increased by $48,484, or 6% to $810,477 compared with $761,993
     during the same period of 2000.



                                       14
<PAGE>   15

     The increases that affected general and administrative costs were
     associated with an increase in administrative personnel for second quarter
     2001 that increased wage expenses by 54% to $138,902 compared with $89,996
     in second quarter 2000. Additionally, during second quarter 2001, sales
     expenses increased by 94% to $225,686 compared with $116,501 in second
     quarter 2000. Deceases that affected general and administrative costs were
     associated with professional service expenses for second quarter 2001 that
     decreased by 51% to $134,240 compared with $274,969 in second quarter 2000.

-    Research and development expenses for the first six months of 2001
     decreased by $64,088, or 63% to $37,146 compared with $101,234 during the
     same period of 2000. The decrease can be contributed primarily to the
     closure of the chemistry and microbiology labs in May 2001. The labs and
     other equipment were sold to a foreign manufacturing company for $85,000.
     The Company has all testing and research processed off site on an as needed
     basis.

-    Interest expense for the first six months of 2001 decreased by $14,738, or
     10% to $135,006 compared with $149,744 during the same period of 2000.

-    Additionally, other expenses for the first six months of 2001 increased
     $274,020. An amount of $21,834 was recognized for a loss on sale and
     disposal of assets during the Companies relocation. An amount of $252,186
     is recognized as a write down of investment in common stock, restricted.
     The Companies investment in restricted common shares of HQNT were valued at
     fair market value as of June 30, 2001.

-    Operating losses increased to $839,654 during the first six months of 2001
     from $816,319 during the same period of 2000. This represented a less than
     3% increase in operating losses.

LIQUIDITY AND WORKING CAPITAL

Historically, our principal source of financing for our research and development
and business activities has been through sales, equity offerings, and debt. As
of June 30, 2001 and June 30, 2000 we had working capital deficits of
approximately $2,270,660 and $1,427,289 respectively. Our independent certified
public accountants stated in their report on the 2000 consolidated financial
statements that due to losses from operations and a working capital deficit,
there is substantial doubt about the Company's ability to continue as a going
concern. We are addressing the going concern issue in virtually every aspect of
our operation. We have cut operating expenses and changed our product mix such
that the company has achieved improved profit margins throughout the first and
second quarters of 2001. Because of our significant losses incurred since
inception, we have become substantially dependent on loans from officers,
directors, and third parties, and from private placements of our securities to
fund operations. These financings and equity placements are included in the
following descriptions.

-    During the six months ended June 30, 2001 we borrowed $433,000 in short
     term loans.

-    During the second quarter 2001 we issued a three year Convertible Debenture
     in the amount of $35,000. The Convertible Debenture carries an interest
     rate of 10% and the principal and interest amounts are convertible into
     common share of Veridien at two-thirds of the average of the mid-point
     between the closing bid and ask prices for the 10 business days prior to
     the election date, however, conversion price shall not be less than $ 0.05.
     In addition, conversion



                                       15
<PAGE>   16

     can be accomplished during the first twelve months at a conversion price of
     $0.035. As of August 2001 we are continuing to generate funding through the
     continuation of private placement efforts.

-    During the second quarter 2001 we utilized public relations services for
     which we issued common stock value at $3,500.

-    During the second quarter 2001 we contracted with a shareholder relations
     firm to assist us with disseminating information on our company to the
     financial community. As remuneration for services provided the company
     agreed to take Veridien common stock. The contract is for a six month
     period May 12 to November 12, 2001 and the company was issued common stock
     valued at $45,000.

-    During the second quarter 2001, $89,776 of the Loan and Security Agreement
     principal was converted by the holder to 8,678 shares of Series B Preferred
     Stock and 3,000,000 shares of Common Stock.

-    During the second quarter 2001 the owner of Sunswipe Inc. with whom
     Veridien had previously contracted to purchase a 50% interest in the
     SunSwipe(TM) product line, agreed to relinquish all right, title and
     interest in the SunSwipe(TM) product line to Veridien in exchange for a 2
     year employment contract which in addition to a salary and commissions
     entitles him to 1,000,000 common shares of Veridien and to warrants
     (vesting over the term of the contract) to purchase a further 1,000,000
     shares at $0.08. As a result, The SunSwipe Corporation L.L.C. is now a 100%
     wholly owned subsidiary of Veridien Corporation. This agreement also
     relieves Veridien of any responsibility under the previous agreement with
     Sunswipe Inc.

-    During the first quarter 2001 we issued a three year Convertible Debenture
     in the amount of $50,000. The Convertible Debenture carries an interest
     rate of 10% and the principal and interest amounts are convertible into
     common share of Veridien at two-thirds of the average of the mid-point
     between the closing bid and ask prices for the 10 business days prior to
     the election date, however, conversion price shall not be less than $ 0.05
     during the first year, $0.10 during the second year and $0.15 during the
     third year. In addition, conversion can be accomplished during the first
     twelve months at a conversion price of $0.10.

-    During the three months ended March 31, 2001 20 Convertible Debentures with
     principal balances of $522,000 and accrued interest of $50,907 were
     converted into 8,813,946 shares of common stock at a conversion rate of
     $0.065 per share.

-    During the six months ended June 30, 2001, accounts receivable increased by
     $214,859 to $326,538 from $111,679 at December 31, 2000. This increase can
     be attributed to increasing sales of SunSwipe(TM) product.

-    During the six months ended June 30, 2001, inventory increased by 257% to
     $682,435 compared with $191,353 at December 31, 2000. The increase is due
     to the purchase of inventory to fulfill orders at our increasing sales
     levels. SunSwipe(TM) inventory currently accounts for 74% of our total
     inventory.



                                       16
<PAGE>   17

-    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 August 1, 2001, we have cash of approximately $36,664 and during
     August and September, we expect cash flow of $300,000 from operating
     activities and private placements. This level of liquidity is sufficient to
     operate the Company for 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 acquire a larger volume
     of product inventory to support an anticipated increase in orders.

-    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. During the second quarter 2000 Veridien began utilizing the
     services of four new contract fill manufacturers. One manufacturer handles
     Veridien's gel products, another the liquid products, the third the
     canister products and the fourth the SunSwipe(TM) product line. 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.


PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On June 7, 2001 Veridien Corporation was served with a COMPLAINT that was filed
with the Circuit Court of the 15th Judicial Circuit in and for Palm Beach
Florida. The Plaintiff is Unico International Trading Corp., a Florida
corporation. The named Defendants are Veridien Corporation, Sheldon C. Fenton
and Kenneth J. Chester. The Plaintiff's action claims and seeks relief for (i)
$110,734.80 he states is owed for goods sold and delivered, (ii) an additional
$789,091 for goods sold pursuant to certain agreements; the delivery of which
was canceled by the Defendants, and (iii) $22,500 for the production of molds
for which he alleges there was a verbal agreement between the parties. On July
6, 2001 the Defendants filed a MOTION TO STRIKE, OR IN THE ALTERNATIVE, MOTION
TO DISMISS AND FOR SANCTIONS. This motion asks the court to strike the pleading
of the Plaintiff as wholly inadequate on its face or in the alternative dismiss
the action for failure to state a cause of action against the individual
plaintiffs, failure to properly allege jurisdiction and failure to name the
correct parties and award them as sanctions for such clear failure to plead
within the Florida Rules of Civil Procedure, all of their costs and fees in
relationship with its defense of this mater. Veridien claims the parties



                                       17
<PAGE>   18

named as Defendants did not have a contractual relationship with the Plaintiff
as broadly alleged in the Complaint and that Veridien Corporation has no debt
obligation to the Plaintiff. The Motion to Strike remains before the Courts.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

We have been in technical default on our Loan and Security Agreement since March
1996. As of June 30, 2001, we are indebted to 1192615 Ontario Ltd. for the
remaining principal balance outstanding of $429,564 and $162,681 of accrued
interest. Although the lender has not waived compliance regarding the loan
criteria they are currently in agreement with deferral of the payment of
interest and agreed in the fourth quarter of 2000 to extend the loan due date
for one year from November 18, 2000 to November 18, 2001.

ITEM 5. OTHER INFORMATION

We have contracted with a Canadian manufacturing company who both produces and
arranges for sub-contracting of production of our SunSwipe(TM) products for us.
Majority ownership (directly or indirectly) of this company is held by members
of Sheldon C. Fenton's family or by entities of which they are officers or
directors. This year we entered into a financial arrangement with the
manufacturer under the terms of which they supply Veridien with inventory and
they retain a security interest in the inventory until it is sold. A resolution
to approve and endorse this arrangement was unanimously passed by Veridien's
Board of Directors.

On May 1, 2001 our company entered into an agreement with Vin-Dotco, Inc. to
lease 15,000 square feet of their building located at 2875 MCI Drive Pinellas
Park, Florida 33782. Our lease with our current landlord expired on May 18, 2001
and the company moved to the new location at that time. The rental agreement for
our new facility is for a 19 month period ended December 31, 2002 and the
reduction in rent as compared to our old facility will result in net savings of
in excess of $180,000 annually. The new facility has sufficient office and
warehouse space both to satisfy our current needs and allow for future
expansion.



                                       18
<PAGE>   19

                                   SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                               Veridien Corporation
                                   ---------------------------------------------
                                                  (Registrant)



Date  August 14, 2001               By /s/ Sheldon C. Fenton
      ---------------                  -----------------------------------------
                                       Sheldon C. Fenton
                                       Chief Executive Officer





Date  August 14, 2001               By /s/ Kenneth J. Chester
      ---------------                  -----------------------------------------
                                       Kenneth J. Chester
                                       Chief Operating Officer





                                       19