##### Table of Contents



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 1934For the quarterly period ended June 30, 2004[  ]
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from toCommission file number  000-25555 Veridien Corporation 
  Delaware
    
    59-3020382(State or Other Jurisdiction of
    
    (IRS Employer Identification No.)Incorporation or Organization)
 2875 MCI Drive, Suite B, Pinellas Park, Florida
    
    33782-6105(Address of principal executive offices)
    
    (Zip Code)
 (727) 576-1600 
  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 State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: 209,659,734 shares of common
stock, par value $0.001 were outstanding at August 9, 2004. Transitional Small Business Disclosure Format (check one): Yes  No X




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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 of Financial Condition
and Results of Operation
    
    
    12Item 3. Controls and Procedures
    
    
    20PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 2. Changes in Securities and Small Business Issuer Purchases
of Equity Securities
    
    
    20Item 5. Other Information
    
    
    21Item 6. Exhibits and Reports on Form 8-K(a) Exhibit 10.36  Agreement with Mycosol,
Inc.
    
    
    21(b) Exhibit 31.1  Rule 13a-14(a)/15d-14(a)
Certification, Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002
    
    
    21(c) Exhibit 31.2  Rule 13a-14(a)/15d-14(a)
Certification, Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002
    
    
    21(d) 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
    
    
    21(e) Exhibit 32.2  Certification Pursuant 18 U.S.C.
Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
    
    
    21Ex-10.36 Agreement With Mycosol, Inc.EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
  2




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##### Table of Contents



PART I FINANCIAL INFORMATION 
 Item 1.
    
    
    
    
    Financial Statements
 Veridien Corporation
and Subsidiaries
 Consolidated Balance Sheets
(Unaudited)
June 30, 2004 and December 31, 2003 June 30, 2004
    
    December 31, 2003AssetsCurrent Assets:Cash
    
    $
    552,485
    
    
    $
    101,506Accounts receivable  tradeLess allowance for doubtful account of
$11,183 and $12,640 respectively
    
    
    63,365
    
    
    
    70,323Inventory
    
    
    190,938
    
    
    
    125,500Investment escrow
    
    
    110,000
    
    
    
    -0-Due from shareholder
    
    
    69,764
    
    
    
    69,764Marketable Securities
    
    
    298,115
    
    
    
    475,416Note receivable
    
    
    125,000
    
    
    
    -0-Prepaid expenses and other current assets
    
    
    25,866
    
    
    
    63,637Total current assets
    
    
    1,435,533
    
    
    
    906,146Property and equipment:Furniture and fixtures
    
    
    410,898
    
    
    
    409,211410,898
    
    
    
    409,211Less accumulated depreciation
    
    
    392,782
    
    
    
    385,73118,116
    
    
    
    23,480Other Assets:Investments in preferred stock, cost basis
    
    
    125,000
    
    
    
    50,000Investments in securities, restricted basis
    
    
    456,000
    
    
    
    -0-Patents less accumulated amortization
of $564,382 and $500,967 respectively
    
    
    60,986
    
    
    
    63,415Security deposits and other assets
    
    
    1,625
    
    
    
    1,625643,611
    
    
    
    115,040Total assets
    
    $
    2,097,260
    
    
    $
    1,044,666
 See accompanying notes to the financial statements. 3




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Veridien Corporation
And Subsidiaries Consolidated Balance Sheets  Continued
(Unaudited)
June 30, 2004 and December 31, 2003 June 30, 2004
    
    December 31, 2003Liabilities and Deficit in Stockholders EquityCurrent liabilities:Current capital lease obligations
    
    $
    3,126
    
    
    $
    6,022Note payable
    
    
    243,356
    
    
    
    878,845Convertible debentures due
    
    
    628,291
    
    
    
    304,291Accounts payable
    
    
    113,603
    
    
    
    890,595Accrued compensation
    
    
    4,139
    
    
    
    2,692Accrued interest
    
    
    767,497
    
    
    
    1,156,537Other accrued liabilities
    
    
    16,030
    
    
    
    23,221Customer deposits
    
    
    303,564
    
    
    
    62,064Due to stockholders
    
    
    35,070
    
    
    
    34,039Total current liabilities
    
    
    2,114,676
    
    
    
    3,358,306Long-term liabilities:Convertible debentures
    
    
    3,277,682
    
    
    
    1,687,086Total liabilities:
    
    
    5,392,358
    
    
    
    5,045,392Deficit 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
issued and outstanding at June 30, 2004
and December 31, 2003
    
    
    60,000
    
    
    
    60,000Series B Preferred Stock, $.001 par value, 245,344
authorized, and 174,219 issued and
outstanding at June 30, 2004 and December 31, 2003
    
    
    175
    
    
    
    175Common Stock  $.001 par value; 300,000,000 shares
authorized, 209,659,734 and 205,745,290 shares
issued and outstanding at June 30, 2004 and
December 31, 2003
    
    
    209,660
    
    
    
    205,745Additional paid-in capital
    
    
    30,899,235
    
    
    
    30,678,313Common stock warrants
    
    
    26,399
    
    
    
    26,399Accumulated deficit
    
    
    (34,966,358
    )
    
    
    (34,229,321
    )Current period profit/(loss)
    
    
    480,791
    
    
    
    (737,037
    )(3,290,098
    )
    
    
    (3,995,726
    )Stock subscriptions receivable
    
    
    (5,000
    )
    
    
    (5,000
    )Total stockholders deficit
    
    
    (3,295,098
    )
    
    
    (4,000,726
    )$
    2,097,260
    
    
    $
    1,044,666
 See accompanying notes to financial statements. 4




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Veridien Corporation
and Subsidiaries Consolidated Statements of Operations
(Unaudited) Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Revenue
    
    $
    225,348
    
    
    $
    549,956
    
    
    $
    802,417
    
    
    $
    894,477Operating costs and expenses:Cost of revenue
    
    
    48,625
    
    
    
    390,916
    
    
    
    133,090
    
    
    
    524,030General, selling, and
administrative
    
    
    238,125
    
    
    
    247,309
    
    
    
    487,490
    
    
    
    497,644Research and development
    
    
    39,287
    
    
    
    29,546
    
    
    
    81,168
    
    
    
    47,532326,037
    
    
    
    667,771
    
    
    
    701,748
    
    
    
    1,069,206Income (loss) from operations
    
    
    (100,689
    )
    
    
    (117,815
    )
    
    
    100,669
    
    
    
    (174,729
    )Other income (expense):Interest expense
    
    
    (114,037
    )
    
    
    (100,752
    )
    
    
    (212,861
    )
    
    
    (197,973
    )Realized gain (loss)
on marketable securities
    
    
    519,524
    
    
    
    (20,733
    )
    
    
    511,079
    
    
    
    (85,578
    )Unrealized gain (loss)
on marketable securities
    
    
    (214,317
    )
    
    
    -0-
    
    
    
    81,085
    
    
    
    (14,802
    )Interest income
    
    
    550
    
    
    
    83
    
    
    
    819
    
    
    
    165191,720
    
    
    
    (121,402
    )
    
    
    380,122
    
    
    
    (298,188
    )Net income (loss) before taxes
    
    
    91,031
    
    
    
    (239,217
    )
    
    
    480,791
    
    
    
    (472,917
    )Income taxes
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-Net income (loss)
    
    $
    91,031
    
    
    $
    (239,217
    )
    
    $
    480,791
    
    
    $
    (472,917
    )Net income (loss) per
common share
    
    $
    0.0004
    
    
    $
    (0.0013
    )
    
    $
    0.0023
    
    
    $
    (0.0025
    )Weight average share outstanding
    
    
    209,413,926
    
    
    
    189,329,219
    
    
    
    208,344,730
    
    
    
    187,176,220
 See accompanying notes to financial statements. 5




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Veridien Corporation
and Subsidiaries

Consolidated Statements of Cash Flows
(Unaudited)

For the six months ended
June 30, 2004 and June 30, 2003

June 30,2004
    

June 30,2003Cash flows from operating activities:Net Income (loss)
    
    $
    480,791
    
    
    $
    (472,917
    )Adjustments to reconcile net (loss) to net cash
    (used) by operating activities:Depreciation and amortization
    
    
    9,480
    
    
    
    9,157Stock issuances for services
    
    
    122,223
    
    
    
    29,788Stock issuances for interest expense, non-cash
    
    
    182,399
    
    
    
    6,726Other, not affecting cash
    
    
    649,141
    
    
    
    -0-Realized (gains) losses on marketable securities
    
    
    (511,079
    )
    
    
    100,380Unrealized (gains) losses on marketable securities
    
    
    (81,085
    )
    
    
    -0-Proceeds from sale of marketable securities
    
    
    998,528
    
    
    
    272,622(Increase) decrease in:Accounts receivable
    
    
    6,958
    
    
    
    (249,869
    )Notes receivable
    
    
    125,000
    
    
    
    (59,718
    )Prepaid expenses and other current assets
    
    
    37,771
    
    
    
    26,918Inventories
    
    
    (65,438
    )
    
    
    (26,279
    )Other assets
    
    
    -0-
    
    
    
    (73,049
    )Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (1,784,044
    )
    
    
    458,816Due to stockholders
    
    
    1,031
    
    
    
    (118,805
    )Customer deposits
    
    
    241,500
    
    
    
    (16,800
    )Net cash (used) by operating activities:
    
    
    413,176
    
    
    
    (113,030
    )Cash flow from investing activities:Purchase of investment  preferred
stock
    
    
    (185,000
    )
    
    
    -0-Net purchases and disposal of property and
equipment
    
    
    (1,687
    )
    
    
    -0-Net cash (used) by investing activities
    
    
    (186,687
    )
    
    
    -0-Cash flow from financing activities:Proceeds from convertible debentures
    
    
    330,000
    
    
    
    133,200Net payment on capital leases
    
    
    (2,896
    )
    
    
    (2,740
    )Net proceeds from borrowings
    
    
    (102,614
    )
    
    
    (38,146
    )Net cash provided by financing activities
    
    
    224,490
    
    
    
    92,314Net increase/(decrease) in cash
    
    
    450,979
    
    
    
    (20,716
    )Cash at beginning of year
    
    
    101,506
    
    
    
    89,048Cash at end of quarter
    
    $
    552,485
    
    
    $
    68,332


See accompanying notes to financial statements.

6



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Veridien Corporation
and
Subsidiaries 
 Notes to the Unaudited Interim Consolidated Financial Statements at June 30,
2004: 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 2004. 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. Nature of Operations The Company produces Health-Care and Anti-Infective products. The Company is
incorporated in Delaware. The Company has developed patented and unique
products including surface disinfectants, antiseptic hand cleansers, instrument
presoak, antiseptic hand cleansers, and sun protection products.
The flagship product, VIRAHOL® Hospital Disinfectant/Cleaner & Instrument
Presoak, is a skin friendly, patented, U.S.  EPA and Health Canada registered,
surface disinfectant. Viraguard® Antiseptic Hand Gel, Viraguard® Antiseptic
Hand Wipes are U.S.  FDA and Health Canada drug listed products utilizing
Veridiens patented Virahol® formulation. Recent product line extensions have
included sales of sunscreen impregnated towelettes being marketed under the
SunSwipe label. 2. Principles of Consolidation The accompanying financial statements include the accounts of the company and
its subsidiaries, each of which is wholly-owned. 3. Accounting Estimates The presentation 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. 4. Accounts Receivable The Company uses the allowance method of accounting for doubtful accounts. The
balance is based on historical collections and managements review of the
current status of existing receivables and estimate as to their collectibility. 5. 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, 2004, raw materials and finished goods amounted
to approximately $50,202 and $140,736 respectively. 7




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Note A  Summary of Significant Accounting Policies   Continued 6. Marketable Equity  Securities, Trading Marketable Equity  Securities, Trading are comprised of common stock and are
carried at estimated fair value. The associated unrealized gains and losses,
net of income tax are included in the statement of operations. 7. Property and Equipment Property and equipment are stated at cost. Depreciation on property and
equipment is calculated on the straight-line method over their estimated useful
lives ranging from three to seven years. Leasehold improvements are amortized
on the straight-line method over the shorter of the lease term or estimated
useful life. Major renewals, betterments and replacements are capitalized.
Maintenance and repairs are charged to expense as incurred. 8. Patents The Company capitalizes certain costs, primarily legal and other fees, related
to patents. Accumulated costs are amortized over the estimated lives of the
patents using the straight-line method, commencing at the time the patents are
issued. 9. Loan Costs Loan coast are amortized by the straight-line method over the term of the
respective loans. 10. Investment in Preferred Stock  Cost Basis During the fourth quarter of 2003 the Company invested $50,000 in preferred
stock of an unrelated entity. During the first quarter of 2004 the Company
invested an additional $75,000 in preferred stock in the same entity. The
investee company is an early stage development company. 11. Investment in Securities  Restricted Basis During second quarter 2004 the Company received 344,500 shares of free trading
common stock of H-Quotient, Inc. (HQNT) from an investor in exchange for
486,875 restricted common shares of H-Quotient, Inc. (HQNT). The 486,875
restricted common shares represents H-Quotients customer deposit for products
to be delivered in third quarter 2004. The amount of the deposit is $241,500
which also represents the cost basis of the 344,500 shares of common stock. During first quarter 2004 the Company executed an agreement with H-Quotient,
Inc. (HQNT) which encompasses the sale of product, licensing and service fees.
The Company recorded licensing and service fees of $456,000 in first quarter
2004 which reflects 400,000 HQNT restricted common shares received at
two-thirds fair market value (FMV). No unrealized gain or loss will be
recognized on the 400,000 restricted common shares until the restrictions have
expired and/or the shares are sold. 12. Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced 8




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Note A  Summary of Significant Accounting Policies   Continued by a valuation allowance when, in the opinion of management, it is more likely
that not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment. 13. Reclassification Certain reclassifications have been made to the December 31, 2003 audited
consolidated financial statements to be in conformity with the June 30, 2004
unaudited interim financial statements. 14. Net Income (Loss) per Share Net income (loss) per common share is calculated by dividing the net income
(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 209,413,926 and
189,329,219 for the quarter ending June 30, 2004 and 2003, 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. Note B  Realization of Assets The accompanying unaudited interim consolidated financial statements of the
Company as of June 30, 2004 and for the six months ended June 30, 2003 and
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, 2004 and the results of its operations
and its cash flows for the six months ended June 30, 2004 and June 30, 2003,
respectively. The results for the six months ended June 30, 2004 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. Prior to this year, the Company had incurred losses since its incorporation.
At June 30, 2004, the Company had an accumulated deficit of $34,485,567,
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 $3.3 million, a deficit in
working capital of $0.7 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. 9




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Note B  Realization of Assets  Continued 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. 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  Marketable Securities and Investments During the second quarter 2004 the Company sold 344,500 HQNT shares and
realized a gain at time of sale of $519,524 due to the increase in the sale
price from the cost basis of $.70 at time of acquisition. At June 30, 2004 the
Company owned 301,431 shares with a market value of $298,115. During the first quarter 2004 the Company sold 358,869 HQNT shares and realized
a loss at time of sale of $8,445 due to the decline in the FMV of the stock the
from December 31, 2003 closing price of $.72. During the second quarter 2003 the Company sold 380,000 HQNT shares and
realized a loss in the amount of $20,733 due to the decline in the FMV of the
stock from March 31, 2003. During the first quarter 2003 the Company sold 100,000 HQNT shares and realized
a loss of $64,845 due to the decline in the FMV of the stock from December 31,
2002 at $1.34. During the second quarter 2004 the Company recorded an unrealized loss in the
amount of $214,317 which reflects the decline in the FMV of 301,431 HQNT shares
from March 31, 2004 at $1.70 to $.989 at June 30, 2004. 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. During the first quarter 2003 the Company issued 5,000,000 restricted common
shares which were in exchange for 276,267 free trading common shares of H.
Quotient, Inc. (HQNT) (a publicly traded company) which resulted in an initial
cost basis of $100,000. The Company recorded an unrealized gain of $62,998
which reflects the increase in the FMV of 276,267 HQNT shares from $.362 to
$.59 at March 31, 2003. During the first quarter 2003 the Company recorded an unrealized loss in the
amount of $77,800 which reflects the decline in the FMV of 103,733 HQNT shares
from December 31, 2002 at $1.34 to $.59 at March 31, 2003. 10




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Note D  Related Party Transactions In February 2003, the Company sold raw materials and finished goods in the
amount of $94,836 to a manufacturing company owned by a former director of
Veridien Corporation. The Company received a credit note with the
manufacturing company in the amount of $47,418 to be applied against product
purchases. Also, a promissory note for $47,418 was received with an interest
rate of 10% per annum which shall accrue from May 1, 2003 until paid. The
Company at June 30, 2004 has received $25,072 in product purchases as an offset
to the credit note. The Company expects to fully realize the remaining balance
of $69,764 through credits via product purchases. The note is guaranteed by
the former director. Note E  Note Receivables During second quarter ending June 30, 2004 the Company received two promissory
notes from Mycosol, Inc. for $50,000. and $75,000. The note receivables may be
settled on or after January 30, 2005 by delivery to Veridien 125,000 shares of
Series A Convertible Preferred Stock of Mycosol, $0.001 par value per share and
such additional common shares and warrants as contemplated under the Memorandum
of Agreement dated June 1, 2004. Veridien may also convert the Notes, at its
option, on or before the due date, into 125,000 shares of Series A Convertible
Preferred Stock of Mycosol, $0.001 par value per share and such additional
common shares and warrants as contemplated under the Memorandum of Agreement
dated June 1, 2004. Interest after the due date shall accrue at the rate of
10% per annum. 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 2004. 11




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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations Second Quarter  June 30, 2004 Compared with June 30, 2003, and Six-Months
Ended June 30, 2004 Compared with June 30, 2003 The following discussion and analysis provide information that we believe is
relevant to an assessment and understanding of the results of operations and
financial condition as of June 30, 2004 for the three months and six months
ended June 30, 2004 and June 30, 2003, respectively. This discussion should be
read in conjunction with the Consolidated Financial Statements and the Notes
thereto included elsewhere in this Report. This Report also contains certain
forward-looking statements and information. This cautionary statement should
be read as being applicable to all related forward-looking statements wherever
they may appear. Our actual future results could differ materially from those
discussed herein. Overview We are a Health Care and Anti-Infectives company incorporated in Delaware
focusing on infection control and other Healthy Lifestyle products. The
Company has developed PATENTED and UNIQUE PRODUCTS including SURFACE
DISINFECTANTS, ANTISEPTIC HAND CLEANSERS, INSTRUMENT PRESOAK, ANTISEPTIC HAND
CLEANSERS, and SUN PROTECTION PRODUCTS. The flagship product, VIRAHOL® Hospital Disinfectant/Cleaner & Instrument
Presoak, is a skin friendly, patented, U.S.  EPA and Health Canada registered,
surface disinfectant. Viraguard® Antiseptic Hand Gel, Viraguard® Antiseptic
Hand Wipes are U.S.  FDA and Health Canada drug listed products utilizing
Veridiens patented Virahol® formulation. Recent product line extensions have included sales of sunscreen impregnated
towelettes being marketed under the SunSwipe label. 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. During 2003 and early 2004, we continued to focus our sales efforts on our
Infection Control products. We have expanded our product line to include
Viraguard® Toilet Seat Wipes, which are available for use in restrooms in
hotels, restaurants, airports and other public places as well as in hospitals
and physicians offices, and other places where disinfection is critical to
controlling the spread of disease carrying organisms. Since 2002, we have contracted the services of Dunnigan Developments Ltd. to
coordinate sales and marketing activities with our large multi-national and
other major corporate customers. Paul Dunnigan, the principal of Dunnigan
Developments Ltd., has 22 years experience in marketing and merchandising
consumer products, as well as in supply-chain management for large retailing
operations, including many years with a multi-national corporation. We are aggressively continuing to pursue possible strategic alliances with a
number of major corporations to further strengthen our Company. 12




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During 2002, we entered into a global distribution agreement with E.I. DuPont
de Nemours and Company to market Veridiens line of sunscreen towelettes.
DuPont has commenced marketing Veridiens towelettes and sales of these
products in the Emergency Services and Industrial markets began in the second
quarter of 2003. In addition, we entered into a five (5) year Distribution Agreement with DuPont
for all Viraguard® products in the United States of America for specific market
segments. The Agreement includes certain exclusivity rights for the Emergency
Services and Industrial markets. The products concerned are Viraguard® Hard
Surface Disinfectant Towelettes, Viraguard® Antiseptic Hand Wipes, Viraguard®
Disinfectant solution in one gallon, 16 ounce and 2 ounce formats all of which
are being produced for DuPont under their brand label. Deliveries commenced in
February 2003. In 2003, DuPont and Veridien agreed to test the Virahol® formulation for
efficacy on Hepatitis A, B and C in order to create superior kill claims for
the Viraguard® product line. Hepatitis outbreaks across North America in 2002
and 2003 have increased demand for products with Hepatitis kill claims,
particularly in the Healthcare and First Responder markets. As of December
2003, Veridien has received label claim approval representing effectiveness
against Hepatitis A, B and C on Viraguard® Disinfectant liquids for Hard
Surfaces. Veridien has also drug listed all the Viraguard® Hand Antiseptic
products with the FDA, which products reflect effectiveness against Hepatitis
A, B and C based on in vitro testing. These new Hepatitis kill claims should
provide Veridien and its subregistrants (ie. Dupont) with a strong competitive
advantage in 2004. During 2003 we signed a supply contract with the American Red Cross. Our
patented Viraguard® disinfectants and wipes may be used by the Red Cross to
meet regulatory requirements concerning the type of hard surface disinfectants
used in Red Cross Biomedical Services facilities across America. The products
the American Red Cross have contracted for are: Viraguard® Hospital Hard
Surface Disinfectant Cleaner and Instrument Presoak, Viraguard® Antiseptic Hand
Spray, Viraguard® Hospital Surface Disinfectant Towelettes and Viraguard®
Antiseptic Hand Wipes. The Viraguard® products will be used for personal hand
sanitation, disinfection of clinic surfaces and for maintenance of blood
collection equipment. Early in 2004 we signed a multi-year contract with H2O to Go, LLC. Purified
Water to Go operates a fast growing chain of retail franchises marketing
purified water, nutrition and healthy lifestyle products. They will be using
our patented Viraguard® infection control products for cleaning and
disinfecting their stores and operating equipment, as well as providing hand
hygiene for their staff and customers when water refilling in stores. The full
Viraguard® line of infection control products and our unique SunSwipe
Sunscreen Towelettes will be sold to retail customers in H2O to Go stores
across the United States. Prior to this year, the Company had incurred losses since its incorporation.
At June 30, 2004, the Company had an accumulated deficit of $34,485,567. The
Company has financed its ongoing business activities through a combination of
sales, equity financing, sale of marketable securities and debt. 13




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##### Table of Contents



Results of Operations Second Quarter ended June 30, 2004 vs. Second Quarter ended June 30, 2003 Second Quarter
    
    Percentage ofJune 30,
    
    Net Revenue2004
    
    2003
    
    2004
    
    2003Revenue
    
    $
    225,348
    
    
    $
    549,956
    
    
    
    100
    %
    
    
    100
    %Cost of Revenue
    
    
    48,625
    
    
    
    390,916
    
    
    
    22
    %
    
    
    71
    %Gross Profit
    
    
    176,723
    
    
    
    159,040
    
    
    
    78
    %
    
    
    29
    %Operating Expenses:General, Selling & Administrative
    
    
    238,125
    
    
    
    247,309
    
    
    
    106
    %
    
    
    45
    %Research & Development
    
    
    39,287
    
    
    
    29,546
    
    
    
    17
    %
    
    
    5
    %Income (Loss) from Operations
    
    
    (100,689
    )
    
    
    (117,815
    )
    
    
    45
    %
    
    
    (21
    )%Other Income (Expense) Net
    
    
    191,720
    
    
    
    (121,402
    )
    
    
    85
    %
    
    
    (22
    )%Net Income (Loss) Before Taxes
    
    
    91,031
    
    
    
    (239,217
    )
    
    
    40
    %
    
    
    (43
    )%Income Taxes
    
    
    -0-
    
    
    
    -0-
    
    
    
    0
    %
    
    
    0
    %Net Income (Loss)
    
    $
    91,031
    
    
    $
    (239,217
    )
    
    
    40
    %
    
    
    (43
    )%
 Second Quarter 
June 30, 2004 Compared with June 30, 2003 Consolidated gross revenues for second quarter 2004 increased by $195,383 or
36%, to $745,422 compared with $550,039 in second quarter 2003.  
    
    Gross revenue from licensing and service fees increased for second
quarter 2004 by $100,000 or 100% to $100,000 compared with $-0- in
second quarter 2003. During the second quarter 2004 the Company
recieved service fees for services provided for Mycosol, Inc. Gross
revenue from product sales decreased for second quarter 2004 by
$424,608, or 77%, to $125,348 compared with $549,956 in second quarter
2003. 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.  
    
    During the second quarter 2004 the Company sold 344,500 HQNT shares
and realized a gain at time of sale of $519,524 due to the increase in
the sale price from the cost basis of $.70 at time of acquisition.
During second quarter 2004 the Company received these 344,500 shares
of common stock from an investor in exchange for 486,875 restricted
common shares of H-Quotient, Inc. (HQNT). The 486,875 restricted
common shares represents H-Quotients customer deposit for products to
be delivered in third quarter 2004. The amount of the deposit is
$241,500 which also represents the cost basis of the 344,500 shares of
common stock.  
    
    Interest income for second quarter 2004 increased by $467, or 563% to
$550 compared with $83 in second quarter 2003. 14




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##### Table of Contents



Consolidated gross expenses for second quarter 2004 decreased by $134,865, or
17%, to $654,391 compared with $789,256 in second quarter 200.  
    
    The cost of revenue for the second quarter decreased as a percentage
of total revenue to 22% in 2004 from 71% in 2003. The cost of goods
sold from product sales for second quarter decreased by $342,291 or
88% to $48,625 compared with $390,916 in second quarter 2003. The
cost of goods ratio as a percentage of product sales was 39% in second
quarter 2004 compared to 71% in second quarter 2003. The decrease in
ratio of the cost of goods from product sales as a percentage of sales
resulted primarily from sale of a product mix with increased margins.
Profit margins for product sales were at 61% and 29%, respectively.  
    
    General, selling, and administrative expenses for second quarter 2004
decreased by $9,184 or 4% to $238,125 compared with $247,309 during
the same period of 2003. Decreases that affected general and
administrative costs were associated with selling expenses which
decreased for second quarter 2004 by 34% to $87,332 compared with
$132,839 in second quarter 2003. This decrease is attributable to the
shift from inside sales staff to outside sales staff. Additional
decreases that affected general and administrative expenses were
associated with professional legal, consulting and accounting fees for
second quarter 2004 that decreased by 4% to $42,275 compared with
$43,925 in second quarter 2003. Increases that affected general and
administrative costs were associated with administrative wages which
increased in second quarter 2004 by 160% to $38,812 compared with
$14,951 in second quarter 2003. This increase is attributable to the
increase in permanent staff versus contracting staff from outside
agencies. Additional increases in general and administrative costs
were associated with public company expenses for second quarter 2004
the increase in this category increased by 60% to $9,958 compared with
$6,212 in second quarter 2003. This increase is attributable to the
increased costs in updating and maintaining the Companys website and
the increased cost in releasing press releases.  
    
    Research and development expenses for second quarter 2004 increased by
$9,741, or 33% to $39,287 compared with $29,546 in second quarter
2003. The Company continues to do additional research on the focus of
broadening the range of claims we can assert on our existing products
and on testing new products for commercialization.  
    
    Interest expense for second quarter 2004 increased by $13,285, or 13%
to $114,037 compared with $100,752 in second quarter 2003. The
increase in interest expense was due primarily to the increase in
Convertible Debentures and continuing current debt financing
arrangements.  
    
    During the second quarter 2004 the Company recorded an unrealized loss
in the amount of $214,317 which reflects the decline in the FMV of
301,431 HQNT shares from March 31, 2004 at $1.70 to $.989 at June 30,
2004.  
    
    Net income (losses) increased to a net income of $91,031 for second
quarter 2004 from a net loss of $239,217 in second quarter 2003. This
represented a 138% increase in net income (losses). 15




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##### Table of Contents



Six Months ended June 30, 2004 vs. Six Months ended June 30, 2003 Six Months ended
    
    Percentage ofJune 30,
    
    Net Revenue2004
    
    2003
    
    2004
    
    2003Revenue
    
    $
    802,417
    
    
    $
    894,477
    
    
    
    100
    %
    
    
    100
    %Cost of Goods Sold
    
    
    133,090
    
    
    
    524,030
    
    
    
    17
    %
    
    
    59
    %Gross Profit
    
    
    669,327
    
    
    
    370,447
    
    
    
    83
    %
    
    
    41
    %Operating Expenses:General, Selling & Administrative
    
    
    487,490
    
    
    
    497,644
    
    
    
    61
    %
    
    
    56
    %Research & Development
    
    
    81,168
    
    
    
    47,532
    
    
    
    10
    %
    
    
    5
    %Income (Loss) from Operations
    
    
    100,669
    
    
    
    (174,729
    )
    
    
    13
    %
    
    
    (20
    )%Other Income (Expense) Net
    
    
    380,122
    
    
    
    (298,188
    )
    
    
    47
    %
    
    
    (33
    )%Net Income (Loss) Before Taxes
    
    
    480,791
    
    
    
    (472,917
    )
    
    
    60
    %
    
    
    (53
    )%Income Taxes
    
    
    -0-
    
    
    
    -0-
    
    
    
    0
    %
    
    
    0
    %Net Income (Loss)
    
    $
    480,791
    
    
    $
    (472,917
    )
    
    
    60
    %
    
    
    (53
    )%
 Six-months ended June 30, 2004 Compared with Six Months Prior Year ended June
30, 2003 Consolidated gross revenues for the six months ended June 30, 2004 increased by
$500,758, or 56% to $1,395,400 compared with $894,642 during the same period of
2003.  
    
    Gross revenue from licensing and service fees increased for first the
first six months of 2004 by $556,000 or 100% to $556,000 compared with
$-0- in 2003. During the first six months of 2004 the Company earned
gross revenue from an agreement signed with H-Quotient, Inc. (HQNT)
which involves the sale of product, licensing and service fees. The
initial amount earned there under in first quarter 2004 reflects
400,000 HQNT restricted common shares which are reflected at
two-thirds fair market value until the restricted shares become free
trading and/or are disposed of. Also during the first six months of
2004 the Company earned service fees for services provided for
Mycosol, Inc. Gross revenue from product sales decreased for the
first six months of 2004 by $648,060, or 72%, to $246,417 compared
with $894,477 in 2003. 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.  
    
    During the second quarter 2004 the Company sold 344,500 HQNT shares
and realized a gain at time of sale of $519,524 due to the increase in
the sale price from the cost basis of $.70 at time of acquisition.
During second quarter 2004 the Company received these 344,500 shares
of common stock from an investor in exchange for 486,875 restricted
common shares of H-Quotient, Inc. (HQNT). The 486,875 restricted
common shares represents H-Quotients customer deposit for 16




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##### Table of Contents



products to be delivered in third quarter 2004. The amount of the deposit
is $241,500 which also represents the cost basis of the 344,500 shares of
common stock. During the first quarter 2004 the Company sold 358,869 HQNT
shares and realized a loss at time of sale of $8,445 due to the decline in
the FMV of the stock the from December 31, 2003 closing price of $.72.
This represents a net realized gain of $511,079 for the first six months of
2004.  
    
    During the second quarter 2004 the Company recorded an unrealized loss
in the amount of $214,317 which reflects the decline in the FMV of
301,431 HQNT shares from March 31, 2004 at $1.70 to $.989 at June 30,
2004. 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. This represents a net unrealized gain of $81,085 for the first
six months of 2004.  
    
    Interest income for the first six months of 2004 increased by $654, or
396% to $819 compared with $165 during the same period of 2003. Consolidated gross expenses for the first six months of 2004 decreased by
$452,950, or 33%, to $914,609 compared with $1,367,559 during the same period
of 2003.  
    
    The cost of revenue for the first six months of 2004 decreased as a
percentage of total revenue to 17% in 2004 from 59% during the same
period of 2003. The cost of goods sold from product sales for the six
months ended June 30, 2004 decreased by $401,343 or 77% to $122,687
compared with $524,030 during the same period of 2003. The cost of
goods ratio as a percentage of product sales was 50% during the six
months ended June 30, 2004 compared to 59% in the same period 2003.
The decrease in ratio of the cost of goods from product sales as a
percentage of sales resulted primarily from sale of a product mix with
increased margins. Profit margins for product sales were at 50% and
41%, respectively.  
    
    General, selling, and administrative expenses for six months ended
June 30, 2004 decreased by $10,154 or 2% to $487,490 compared with
$497,644 during the same period of 2003. Decreases that affected
general and administrative costs were associated with selling expenses
which decreased for six months ended June 30, 2004 by 22% to $190,696
compared with $245,415 in the same period 2003. This decrease is
attributable to the shift from inside sales staff to outside sales
staff. Increases that affected general and administrative costs were
associated with administrative wages which increased for six months
ended June 30, 2004 by 66% to $73,242 compared with $44,235 in the
same period 2003. This increase is attributable to the increase in
permanent staff versus contracting staff from outside agencies.
Increases that affected general and administrative expenses were
associated with professional legal, consulting and accounting fees for
six months ended June 30, 2004 that increased by 2% to $94,455
compared with $92,381 in the same period 2003. Additional increases
in general and administrative costs were associated with public
company expenses for six months ended June 30, 2004 the increase in
this category increased by 61% to $13,959 compared with $8,665 in the
same period 2003. This increase is attributable to the increased
costs in updating and maintaining the Companys website and the
increased cost in releasing press releases.  
    
    Research and development expenses for the first six months of 2004
increased by $33,636, or 71% to $81,168 compared with $47,532 during
the same period of 2003. The Company continues to do additional
research on the focus of broadening the range of claims we can assert
on our existing products and on testing new products for
commercialization.  
    
    During second quarter 2003, the Company sold 380,000 HQNT shares and
realized a loss of $20,733 due to the decline in the FMV of the stock
from March 31, 2003 at $.59. During first quarter 2003, the Company
sold 100,000 HQNT shares and realized a loss of $64,845 due to the
decline in the 17




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##### Table of Contents



FMV of the stock from December 31, 2002 at $1.34. This represents a net
realized loss of $85,578 for the first six months of 2003.  
    
    During the first quarter 2003 the Company issued 5,000,000 restricted
common shares which were in exchange for 276,267 free trading common
shares of H. Quotient, Inc. (HQNT) (a publicly traded company) which
resulted in an initial cost basis of $100,000. The Company recorded
an unrealized gain of $62,998 which reflects the increase in the FMV
of 276,267 HQNT shares from $.362 to $.59 at March 31, 2003. During
the first quarter 2003 the Company recorded an unrealized loss in the
amount of $77,800 which reflects the decline in the FMV of 103,733
HQNT shares from $1.34 to $.59 at March 31, 2003. This represents a
net unrealized loss of $14, 802 for the first six months of 2003.  
    
    Interest expense for the first six months of 2004 increased by
$14,888, or 8% to $212,861 compared with $197,973 during the same
period of 2003. 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 income of $480,791 during the first six
months of 2004 from a net loss of $472,917 during the same period of 2003.
This represented a 202% increase in net income (losses). Liquidity and Working Capital Historically, our principal source of financing for our research and
development and business activities have been through sales, equity offerings,
and debt. We have successfully reduced our working capital deficit
from $3,808,746 at June 30, 2003 to $679,143 at June 30, 2004. Our
independent certified public accountants stated in their report on the 2003
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 continue to cut operating expenses
and are successfully changing our product mix such that the company is
achieving improved margins. Because of our significant losses incurred since
inception, we have become substantially dependent on (1) loans from officers,
directors, and third parties, (2) private placements of our securities, (3)
revenue from sales, and (4) liquidation of our marketable securities to fund
operations. These results of these items are included in the following
descriptions.  
    
    During the second quarter of 2004 the company liquidated a portion of
its marketable securities for a net cashflow of $754,314.  
    
    During the second quarter of 2004 $471,215 of existing convertible
debenture principal, along with $427,773 of convertible debenture
accrued interest and $1,181,822 of payable debt was rolled into 2
convertible debentures. These debentures carry interest rates of 10%
and have terms of 3 years. These instruments are immediately
convertible into common shares, at the option of the holder, at
conversion rates of $0.051. One debenture in the principal amount of
$300,000 is held by a person not affiliated or related to the company
and one debenture in the principal amount of $1,780,811 is held by
Dunvegan Mortgage Corporation a company of which Veridiens President
& C.E.O. Mr. Sheldon Fenton is an officer and a director.  
    
    During the six months ended June 30, 2004, 41,615 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 $0.072. 18




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##### Table of Contents




    
    During the six months ended June 30, 2004 200,000 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
$0.0565.  
    
    During the second quarter of 2004 246,986 common shares were issued
under the companys S8 Registration Statement for legal and consulting
services totaling $15,242. The average price per share was $0.062.  
    
    During the first quarter of 2004 the company liquidated a portion of
its marketable securities for a net cashflow of $244,214.  
    
    During the first quarter of 2004 we issued 2 convertible debentures
for cash proceeds of $330,000. These debentures carry interest rates
of 10%, have terms of 3 years and have conversion rates of $0.06.  
    
    During the first quarter of 2004 a Convertible Debentures with a
principal balance of $25,000 (accrued interest waived) was converted
into 500,000 shares of common stock.  
    
    During the first quarter of 2004 1,373,571 common shares were issued
under the companys S8 Registration Statement for legal and consulting
services totaling $92,681. The average price per share was $0.067.  
    
    During the first quarter of 2004, as allowed under their agreement,
the company repaid their accounts receivable factoring debt of $77,614
with the issuance of 1,552,272 common shares.  
    
    During the six months ended June 30, 2004, accounts receivable
decreased by $6,958 to $63,365 from $70,323 at December 31, 2003.  
    
    During the six months ended June 30, 2004, inventory increased by
$65,438 to $190,938 compared with $125,500 at December 31, 2003.  
    
    We believe that our long-term success depends on revenues from
operations from product sales and ongoing royalties from technologies
and service fees. 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 10, 2004, we have cash of approximately $443,141 and
during September and October, 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. 19




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##### Table of Contents



Item 3. Controls and Procedures Pursuant to rules adopted by the SEC as directed by Section 302 of the
Sarbanes-Oxley Act of 2002, the company has performed an evaluation of its
disclosure controls and procedures (as defined by Exchange Act rule 13a-14) as
of the end of the period covered by this report. Based on this evaluation, the
companys Chief Executive Officer and Acting Chief Financial Officer has
concluded that these procedures are effective in ensuring that information
required to be disclosed by the company is recorded, processed, summarized, and
reported within the time periods specified in the SECs rules and forms. In
addition, there have not been any significant changes in internal controls or
other factors that could significantly affect internal controls subsequent to
the date of the companys most recent evaluation. 
 PART II OTHER INFORMATION 
 Item 1. Legal Proceedings There have been no changes in the previously reported litigation. 
 Item 2. Changes in Securities and Small Business Issuer Purchases
of Equity Securities  (a)
    
    Not applicable.(b)
    
    Not applicable.(c)
    
    The following issuances of equity securities (including debt
securities immediately convertible into equity securities) without
registration under the Securities Act of 1933 occurred during the
quarter ending June 30, 2004:Common StockAt June 30, 2004, 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 second quarter but
have not as yet been issued. The issuance was considered exempt from
registration by reason of Section 4(2) of the Securities Act.Convertible SecuritiesDuring the second quarter of 2004 $471,215 of existing convertible
debenture principal, along with $427,773 of convertible debenture accrued
interest and $1,181,822 of payable debt was rolled into 2 convertible
debentures. These debentures carry interest rates of 10% and have terms
of 3 years. These instruments are immediately convertible into common
shares, at the option of the holder, at conversion rates of $0.051. One
debenture in the principal amount of $300,000 is held by a person not
affiliated or related to the company and one debenture in the principal
amount of $1,780,811 is held by Dunvegan Mortgage Corporation a company
of which Veridiens President & C.E.O. Mr. Sheldon Fenton is an officer
and a director. These issuances were considered exempt from registration
by reason of Section 4(2) of the Securities Act.(d)
    
    During the quarter ended June 30, 2004 the Company did not
repurchase any of its equity securities. 20




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##### Table of Contents



(e)
    
    Not applicable. 
 Item 5. Other Information During the second quarter the Company finalized an Agreement with Mycosol,
Inc., a development-stage chemical and pharmaceutical company, located in the
Research Triangle Park area of North Carolina. Veridiens focus is on
anti-infectives killing bacteria, mold, mildew, and viruses  through its
Viraguard® product line of proprietary, alcohol-based liquid and towelette
antiseptics and disinfectants. Mycosol is developing complementary,
non-alcohol-based technologies of safe, potent, long lasting products that it
believes will not only kill, but retard the regrowth of infective microbials 
particularly mold. The core chemistry was originally developed by the drug
company, Burroughs Wellcome (now part of GlaxoSmithKline), and subsequently the
data related thereto was licensed from GSK (NYSE symbol: GSK) by Mycosol.
Mycosol has since developed and expanded this anti-infectives technology,
adding five patents pending and a myriad of potential industrial, agricultural,
medical and veterinary applications. Under the Agreement, Veridien has initiated making equity investments in
Mycosol with an option to acquire the majority ownership. Veridien will also
have two seats on Mycosols four-Director Board. Mycosol will continue to
focus its technology on the further development of unique anti-microbials
(bacteria, mold, yeast) to feed the Veridien product pipeline and distribution
channels. The agreement has been signed and finalization of the
documents that flow therefrom is currently being completed. 
 Item 6. Exhibits and Report on Form 8-K  A.
    
    Exhibits (a) Exhibit 10.36  Agreement with Mycosol, Inc (b) Exhibit 31.1  Rule 13a-14(a)/15d-14(a) Certification,
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (c) Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Certification,
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (d) 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 (e) 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-KThere was 1 report on Form 8-K filed in the second quarter of 2004.
This report was filed on April 1, 2004. The report disclosed a
press release disseminated by Veridien and did not contained any
financial statements. 21




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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 16, 2004
    
    By
    
    /s/ Sheldon C. FentonSheldon C. FentonChief Executive OfficerDate August 16, 2004
    
    By
    
    /s/ Rene A. GareauRene A. GareauExecVice President & Secretary
 22