##### 



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 March 31, 2002                                           
|     
|[   ] |  | 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
Incorporation or Organization) |  | (IRS Employer Identification No.)

|                                                |  |           
|----------------------------------------------- |  | ----------
|2875 MCI Drive, Suite B, Pinellas Park, Florida |  | 33782-6105
|                                                |  |           
|(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 |  | 
|    |  |   |  |    |  | 



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##### 



TABLE OF CONTENTS

|        |  |                                                                                       |      
|------- |  | ------------------------------------------------------------------------------------- | -----
|        |  |                                                                                       | Pages
|        |  |                                                                                       |      
|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 | 10-14
|PART II |  | OTHER INFORMATION                                                                     |      
|Item 1. |  | Legal Proceedings                                                                     | 14   
|Item 5. |  | Other Information                                                                     | 14   

2



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##### 



PART 1
FINANCIAL INFORMATION

Item 1.    Financial Statements

Veridien Corporation
and Subsidiaries

Consolidated Balance Sheets
(Unaudited)

March 31, 2002 and December 31, 2001

|                                          |  |                                                                              |           |                |         |                   |           |         |         | 
|----------------------------------------- |  | ---------------------------------------------------------------------------- | --------- | -------------- | ------- | ----------------- | --------- | ------- | ------- | 
|                                          |  |                                                                              |           | March 31, 2002 |         | December 31, 2001
|                                          |  |                                                                              |           |                |         |                  
|Current assets:                           |  |                                                                              |           |                |         |                   |           |        
|Cash                                      |  | $                                                                            | 10,521    |                |         | $                 | 7,219     |        
|Accounts receivable  trade               |  |                                                                              |           |                |         |                   |           |        
|                                          |  | Less allowance for doubtful accounts of
$48,306 and $46,900 respectively     |           |                | 268,582 |                   |           |         | 158,127 | 
|Inventory                                 |  |                                                                              | 542,794   |                |         |                   | 586,313   |        
|Marketable securities                     |  |                                                                              | 166,500   |                |         |                   | 124,500   |        
|Prepaid expenses and other current assets |  |                                                                              | 32,007    |                |         |                   | 54,728    |        
|                                          |  |                                                                              |           |                |         |                   |           |        
|                                          |  | Total current assets                                                         |           | 1,020,404      |         |                   |           | 930,887 |        
|Property and equipment:                   |  |                                                                              |           |                |         |                   |           |        
|                                          |  | Furniture and fixtures                                                       |           |                | 390,211 |                   |           |         | 390,211 | 
|                                          |  | Leasehold improvements                                                       |           |                | -0-     |                   |           |         | -0-     | 
|                                          |  |                                                                              |           |                |         |                   |           |        
|                                          |  |                                                                              | 390,211   |                |         |                   | 390,211   |        
|Less accumulated depreciation             |  |                                                                              | 367,754   |                |         |                   | 364,560   |        
|                                          |  |                                                                              |           |                |         |                   |           |        
|                                          |  |                                                                              | 22,457    |                |         |                   | 25,651    |        
|Other Assets:                             |  |                                                                              |           |                |         |                   |           |        
|                                          |  | Investment in common stock restricted, cost basis                            |           |                | 64,500  |                   |           |         | 64,500  | 
|                                          |  | Patents, less accumulated amortization of
$494,105 and $493,202 respectively |           |                | 20,277  |                   |           |         | 21,179  | 
|                                          |  | Security deposits and other assets                                           |           |                | 33,875  |                   |           |         | 37,022  | 
|                                          |  |                                                                              |           |                |         |                   |           |        
|                                          |  |                                                                              | 118,652   |                |         |                   | 122,701   |        
|                                          |  |                                                                              |           |                |         |                   |           |        
|                                          |  | $                                                                            | 1,161,513 |                |         | $                 | 1,079,239 |        
|                                          |  |                                                                              |           |                |         |                   |           |        

3



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##### 



Veridien Corporation
and Subsidiaries

Consolidated Balance Sheets  Continued
(Unaudited)
March 31, 2002 and December 31, 2001

|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                   |  |           |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------- | ----------------------------------------------- |  | -------------- | ----------- | ----------------- |  | --------- |  | 
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  | March 31, 2002 |             | December 31, 2001
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          |                                                                                                                                                           |   |                           | Liabilities and Deficit in Stockholders Equity |  |                |             |                   |  |           |  | 
|Current liabilities:                                                                                                                                      |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          | Current capital lease obligations                                                                                                                         |   | $                         | 5,002                                           |  |                | $           | 5,886             | 
|                                                                                                                                                          | Note payable                                                                                                                                              |   |                           | 350,014                                         |  |                |             | 343,792           | 
|                                                                                                                                                          | Convertible debentures due                                                                                                                                |   |                           | 100,000                                         |  |                |             | 100,000           | 
|                                                                                                                                                          | Accounts payable                                                                                                                                          |   |                           | 1,505,201                                       |  |                |             | 1,257,102         | 
|                                                                                                                                                          | Accrued compensation                                                                                                                                      |   |                           | 9,596                                           |  |                |             | 6,506             | 
|                                                                                                                                                          | Accrued interest                                                                                                                                          |   |                           | 754,931                                         |  |                |             | 684,968           | 
|                                                                                                                                                          | Other accrued liabilities                                                                                                                                 |   |                           | 10,000                                          |  |                |             | 23,719            | 
|                                                                                                                                                          | Customer deposit                                                                                                                                          |   |                           | 10,007                                          |  |                |             | 20,327            | 
|                                                                                                                                                          | Due to stockholders                                                                                                                                       |   |                           | 49,979                                          |  |                |             | 49,463            | 
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          |                                                                                                                                                           |   | Total current liabilities |                                                 |  | 2,794,730      |             |                   |  | 2,491,763 | 
|Long term liabilities:                                                                                                                                    |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          | Capital lease obligations less current                                                                                                                    |   |                           | 9,960                                           |  |                |             | 11,173            | 
|                                                                                                                                                          | Convertible debentures                                                                                                                                    |   |                           | 2,171,096                                       |  |                |             | 2,162,500         | 
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|Total liabilities                                                                                                                                         |                                                                                                                                                           |   | 4,975,786                 |                                                 |  |                | 4,665,436   |                  
|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 March 31, 2002 and December 31, 2001 |                                                                                                                                                           |   | 60,000                    |                                                 |  |                | 60,000      |                  
|Series B Preferred Stock, $.001 par value, 245,344 authorized, 174,219 and
174,219 issued and outstanding at March 31, 2002 and December 31, 2001         |                                                                                                                                                           |   | 175                       |                                                 |  |                | 175         |                  
|                                                                                                                                                          | Common stock  $.001 par value; 300,000,000 shares
authorized, 175,369,657 and 174,179,487 issued
and outstanding at March 31, 2002 and December 31, 2001 |   |                           | 175,370                                         |  |                |             | 174,181           | 
|Additional paid-in capital                                                                                                                                |                                                                                                                                                           |   | 29,631,043                |                                                 |  |                | 29,574,065  |                  
|Common stock warrants                                                                                                                                     |                                                                                                                                                           |   | 26,399                    |                                                 |  |                | 26,399      |                  
|Accumulated deficit                                                                                                                                       |                                                                                                                                                           |   | (33,416,017               | )                                               |  |                | (31,342,593 | )                
|Current Period Profit/(Loss)                                                                                                                              |                                                                                                                                                           |   | (286,243                  | )                                               |  |                | (2,073,424  | )                
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          |                                                                                                                                                           |   | (3,809,273                | )                                               |  |                | (3,581,197  | )                
|Stock subscriptions receivable                                                                                                                            |                                                                                                                                                           |   | (5,000                    | )                                               |  |                | (5,000      | )                
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|Total Stockholders Deficit                                                                                                                               |                                                                                                                                                           |   | (3,814,273                | )                                               |  |                | (3,586,197  | )                
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  
|                                                                                                                                                          |                                                                                                                                                           | $ | 1,161,513                 |                                                 |  | $              | 1,079,239   |                  
|                                                                                                                                                          |                                                                                                                                                           |   |                           |                                                 |  |                |             |                  

4



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##### 






Veridien Corporation
and Subsidiaries

Consolidated Statements of Operations
(Unaudited)

For the three months ended
March 31, 2002 and March 31, 2001

|                                   |                                             |                      |             |                |          |                |             |         |          |  
|---------------------------------- | ------------------------------------------- | -------------------- | ----------- | -------------- | -------- | -------------- | ----------- | ------- | -------- | -
|                                   |                                             |                      |             | March 31, 2002 |          | March 31, 2001
|                                   |                                             |                      |             |                |          |               
|Sales                              |                                             | $                    | 284,793     |                |          | $              | 122,217     |        
|Operating costs and expenses:      |                                             |                      |             |                |          |                |             |        
|                                   | Cost of sales                               |                      |             | 133,826        |          |                |             | 81,719  |         
|                                   | General, selling, and administrative        |                      |             | 370,453        |          |                |             | 401,758 |         
|                                   | Research and development                    |                      |             | 25,974         |          |                |             | 25,347  |         
|                                   |                                             |                      |             |                |          |                |             |        
|                                   |                                             |                      | 530,253     |                |          |                | 508,824     |        
|                                   |                                             |                      |             |                |          |                |             |        
|                                   |                                             | Loss from operations |             |                | (245,460 | )              |             |         | (386,607 | )
|Other income (expense):            |                                             |                      |             |                |          |                |             |        
|                                   | Interest expense                            |                      |             | (75,945        | )        |                |             | (68,582 | )       
|                                   | Rental income                               |                      |             | -0-            |          |                |             | 3,505   |         
|                                   | Realized gain on sale of obsolete inventory |                      |             | 31,500         |          |                |             | -0-     |         
|                                   | Realized gain on marketable securities      |                      |             | 3,630          |          |                |             | -0-     |         
|                                   | Interest income                             |                      |             | 32             |          |                |             | 341     |         
|                                   |                                             |                      |             |                |          |                |             |        
|                                   |                                             |                      | (40,783     | )              |          |                | (64,736     | )      
|                                   |                                             |                      |             |                |          |                |             |        
|Net
loss before taxes              |                                             |                      | (286,243    | )              |          |                | (451,343    | )      
|Income
taxes                       |                                             |                      | -0-         |                |          |                | -0-         |        
|Net loss                           |                                             | $                    | (286,243    | )              |          | $              | (451,343    | )      
|                                   |                                             |                      |             |                |          |                |             |        
|Net loss per common share          |                                             | $                    | (.002       | )              |          | $              | (.003       | )      
|                                   |                                             |                      |             |                |          |                |             |        
|Weighted average share outstanding |                                             |                      | 175,309,544 |                |          |                | 143,348,331 |        
|                                   |                                             |                      |             |                |          |                |             |        




5



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Veridien Corporation
and Subsidiaries

Consolidated Statements of Cash Flows
(Unaudited)

For the three months ended
March 31, 2002 and March 31, 2001

|                                          |                                                                                 |                                        |         |                |          |                |         |          |          |  
|----------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------- | ------- | -------------- | -------- | -------------- | ------- | -------- | -------- | -
|                                          |                                                                                 |                                        |         | March 31, 2002 |          | March 31, 2001
|                                          |                                                                                 |                                        |         |                |          |               
|Cash flows from operating activities:     |                                                                                 |                                        |         |                |          |                |         |         
|                                          | Net (loss)                                                                      |                                        | $       | (286,243       | )        |                | $       | (451,343 | )       
|                                          | Adjustments to reconcile net (loss) to net cash
(used) by operating activities: |                                        |         |                |          |                |         |          |         
|                                          |                                                                                 | Depreciation and amortization          |         |                | 3,194    |                |         |          | 5,245    |  
|                                          |                                                                                 | Realized
gain on marketable securities |         |                | (35,130  | )              |         |          | -0-      |  
|                                          | (Increase) decrease in:                                                         |                                        |         |                |          |                |         |          |         
|                                          |                                                                                 | Accounts receivable                    |         |                | (110,455 | )              |         |          | (6,547   | )
|                                          |                                                                                 | Licensing fees receivable              |         |                | -0-      |                |         |          | 49,997   |  
|                                          |                                                                                 | Prepaid and other current assets       |         |                | 15,851   |                |         |          | (10,462  | )
|                                          |                                                                                 | Inventory                              |         |                | 43,519   |                |         |          | (216,788 | )
|                                          |                                                                                 | Other assets                           |         |                | 4,049    |                |         |          | (4,190   | )
|                                          | Increase (decrease) in:                                                         |                                        |         |                |          |                |         |          |         
|                                          |                                                                                 | Accounts payable and accrued expenses  |         |                | 313,655  |                |         |          | 528,413  |  
|                                          |                                                                                 | Due to stockholders                    |         |                | 516      |                |         |          | 516      |  
|                                          |                                                                                 | Customer deposits                      |         |                | (10,320  | )              |         |          | 59,500   |  
|                                          |                                                                                 |                                        |         |                |          |                |         |         
|Net cash (used) by operating activities:  |                                                                                 |                                        | (61,364 | )              |          |                | (45,659 | )       
|Cash flow from investing activities:      |                                                                                 |                                        |         |                |          |                |         |         
|                                          | Investment in subsidiaries                                                      |                                        |         | -0-            |          |                |         | -0-      |         
|                                          | Purchases of property and equipment                                             |                                        |         | -0-            |          |                |         | -0-      |         
|                                          |                                                                                 |                                        |         |                |          |                |         |         
|Net cash (used) by investing activities   |                                                                                 |                                        | -0-     |                |          |                | -0-     |         
|Cash flow from financing activities:      |                                                                                 |                                        |         |                |          |                |         |         
|                                          | Proceeds from convertible debentures                                            |                                        |         | 204,000        |          |                |         | -0-      |         
|                                          | Net payment on capital leases                                                   |                                        |         | (2,097         | )        |                |         | (1,710   | )       
|                                          | Net proceeds from borrowings                                                    |                                        |         | (195,404       | )        |                |         | (522,000 | )       
|                                          | Proceeds from issuance of preferred and common
stock                            |                                        |         | 58,167         |          |                |         | 572,904  |         
|                                          |                                                                                 |                                        |         |                |          |                |         |         
|Net cash provided by financing activities |                                                                                 |                                        | 64,666  |                |          |                | 49,194  |         
|Net increase/(decrease) in cash           |                                                                                 |                                        | 3,302   |                |          |                | 3,535   |         
|Cash at beginning of quarter              |                                                                                 |                                        | 7,219   |                |          |                | 20,960  |         
|                                          |                                                                                 |                                        |         |                |          |                |         |         
|Cash at end of quarter                    |                                                                                 | $                                      | 10,521  |                |          | $              | 24,495  |         
|                                          |                                                                                 |                                        |         |                |          |                |         |         




With regard to commitments and contingencies at March 31, 2002, there are no material changes
from the financial statement footnotes as presented December 31, 2001.

6



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Veridien Corporation
and Subsidiaries

Notes to the Unaudited Interim Consolidated Financial Statements at March 31, 2002

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 2002.

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.

2.      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.

3.      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.

4.      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 March 31, 2002, raw materials and finished goods amounted
to approximately $542,794.

5.      Reclassification

Certain reclassifications have been made to the December 31, 2001 audited
consolidated financial statements to be in conformity with the March 31, 2002
unaudited interim financial statements.

7



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Note A  Summary of Significant Accounting Policies  Continued

6.      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 175,309,544 and
143,348,331 for the quarter ending March 31, 2002 and 2001, 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 March 31, 2002 and for the three months ended March 31, 2001 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 March 31, 2002 and the results of its operations
and its cash flows for the three months ended March 31, 2002 and March 31,
2001, respectively. The results for the three months ended March 31, 2002 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 $33.7
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 $3.8 million, a deficit in
working capital of $1.8 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.

8



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Note B  Realization of Assets  Continued

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

In February 2002 the Company realized a gain on the sale of obsolete inventory
by receipt of 18,000 common shares of Nutraceutical Clinical Laboratories
International, Inc. (NCCL). The investment in common shares was recorded at
$31,500 which represents fair market value of the security.

In February 2002 the Company realized a gain on marketable securities. The
Company received 6,000 common shares of Nutraceutical Clinical Laboratories
International, Inc. (NCCL) for payment on an aged accounts receivable. A net
gain of $3,630 was realized for the difference of the debt paid and the fair
market value of the common shares.

9



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##### 



Item 2.       Managements Discussion and Analysis of Financial Condition and Results of Operations

First Quarter  March 31, 2002 Compared with March 31, 2001

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 for the first quarter ending March 31, 2002 compared to the
same period of the prior year. 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 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, FRUIT & VEGETABLE WASH and SUN PROTECTION PRODUCTS.

The flagship product, VIRAHOL® Hospital Disinfectant/Cleaner & Instrument
Presoak, is now being marketed as VIRAGUARD® Hospital Disinfectant/Cleaner &
Instrument Presoak. VIRAGUARD® Hospital Disinfectant/Cleaner & Instrument
Presoak and VIRAGUARD® Hospital Surface Disinfectant Towelette are EPA
registered disinfectants designed for effective disinfecting, cleaning and
deodorizing of hard, inanimate nonporous surfaces. VIRAGUARD® Antiseptic Hand
Gel and VIRAGUARD® 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 sunscreen impregnated
towelettes being marketed under the SunSwipe label.

The Company has incurred losses since its incorporation. At March 31, 2002,
the Company had an accumulated deficit of $33,702,260. The Company has
financed its ongoing business activities through a combination of sales, equity
financing, and debt.

10



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##### 



Result of Operations

First Quarter ended March 31, 2002 vs. First Quarter ended March 31, 2001

|                                  |  |               |          |               |  |      |          |      |  |  |      |    |  |  |      |   
|--------------------------------- |  | ------------- | -------- | ------------- |  | ---- | -------- | ---- |  |  | ---- | -- |  |  | ---- | --
|                                  |  | First Quarter |          | Percentage of
|                                  |  | March 31      |          | Net Revenue  
|                                  |  |               |          |              
|                                  |  | 2002          |          | 2001          |  | 2002 |          | 2001
|                                  |  |               |          |               |  |      |          |     
|Net Sales                         |  | $             | 284,793  |               |  | $    | 122,217  |      |  |  | 100  | %  |  |  | 100  | % 
|Cost of Goods Sold                |  |               | 133,826  |               |  |      | 81,719   |      |  |  | 47   | %  |  |  | 67   | % 
|Gross Profit                      |  |               | 150,967  |               |  |      | 40,498   |      |  |  | 53   | %  |  |  | 33   | % 
|Operating Expenses:               |  |               |          |               |  |      |          |      |  |  |      |    |  |  |      |   
|General,
Selling &
Administrative |  |               | 370,453  |               |  |      | 401,758  |      |  |  | 130  | %  |  |  | 329  | % 
|Research & Development            |  |               | 25,974   |               |  |      | 25,347   |      |  |  | 9    | %  |  |  | 21   | % 
|(Loss) from Operations            |  |               | (245,460 | )             |  |      | (386,607 | )    |  |  | (86  | )% |  |  | (316 | )%
|Other Income (Expense) Net        |  |               | (40,783  | )             |  |      | (64,736  | )    |  |  | (14  | )% |  |  | (53  | )%
|Net (Loss) Before Taxes           |  |               | (286,243 | )             |  |      | (451,343 | )    |  |  | (101 | )% |  |  | (369 | )%
|Income Taxes                      |  |               | -0-      |               |  |      | -0-      |      |  |  | 0    | %  |  |  | 0    | % 
|Net (Loss)                        |  | $             | (286,243 | )             |  | $    | (451,343 | )    |  |  | (101 | )% |  |  | (369 | )%

Consolidated gross revenues for first quarter 2002 increased by $193,892 or
154% to $319,955 compared with $126,063 in first quarter 2001.






| |  | Gross revenue from product sales increased for first quarter 2002 by
$162,576 or 133% to $284,793 compared with $122,217 in first quarter
2001. 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.                                                                                                                                                               
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Gross rental income for first quarter 2002 decreased by $3,505 or 100%
to $-0- compared with $3,505 in first quarter 2001. The Company
previously subleased a portion of our former 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 approximately
15,000 square feet of their building located at 2875 MCI Drive, Suite
B, Pinellas Park, Florida 33782. Our lease with our previous landlord
expired on May 18, 2001, and the Company moved into our new facility
during May 2001. The rental agreement for our new facility is for a
19-month period ending December 31, 2002, and the reduction in rent as
compared to our old facility will result in net savings in excess of
$180,000 annually. The new facility has sufficient office and
warehouse space to satisfy our current needs and allow for future
expansion.




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| |  | In February 2002 the Company realized a gain on the sale of obsolete
inventory by receipt of 18,000 common shares of Nutraceutical Clinical
Laboratories International, Inc. (NCCL). The investment in common
shares was recorded at $31,500 which represents fair market value of
the security.                                                   
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | In February 2002 the Company realized a gain on marketable securities.
The Company received 6,000 common shares of Nutraceutical Clinical
Laboratories International, Inc. (NCCL) for payment on an aged
accounts receivable. A net gain of $3,630 was realized for the
difference of the debt paid and the fair market value of the common
shares.
| 
| |  | Interest income for first quarter 2002 decreased by $309 or 91% to $32
compared with $341 in first quarter 2001.                                                                                                                                                                                                                                   




Consolidated gross expenses for first quarter 2002
increased by $28,971 or 5%
to $606,198 compared with $577,407 in first quarter 2001.






| |  | The cost of goods sold for first quarter 2002 increased by $52,107 or
64% to $133,826 compared with $81,719 in first quarter 2001. The
cost of goods ratio as a percentage of sales was 47% in first quarter
2002 compared to 67% in first quarter 2001. The decrease in ratio of
the cost of goods as a percentage of sales resulted primarily from
sale of a product mix with higher margins. The Company continues to
improve margins.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------








| |  | General, selling, and administrative expenses for first quarter 2002
decreased by $31,305 or 8% to $370,453 compared with $401,758 in first
quarter 2001. Decreases that affected general and administrative
costs were associated with rent expense for first quarter 2002 that
decreased by 72% to $17,700 compared with $62,536 in first quarter
2001. Administrative wages also decreased for first quarter 2002 by
56% to $29,652 compared with $67,211 in first quarter 2001. This
decrease is attributable to the reallocation of senior management
expenses from administrative wages to consulting (see increase in
consulting below).
Additionally, selling expenses decreased for first quarter 2002 by 13%
to $100,247 compared with $114,826 in first quarter 2001. Increases
that affected general and administrative expenses were associated with
professional legal, consulting and accounting fees for first quarter
2002 that increased by 39% to $100,700 compared with $72,630 in first
quarter 2001. Additional increases in general and administrative
costs were associated with public company expenses for first quarter
2002 the increase in this category increased by 961% to $43,928
compared with $4,139 in first quarter 2002. This increase reflects
the annual shareholder meeting which was held on March 6, 2002.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






| |  | Research and development expenses for first quarter 2002 increased by
$627 or 2% to $25,974 compared with $25,347 in first quarter 2001.
This increase was due primarily to 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 first quarter 2002 increased by $7,363 or 11% to
$75,945 compared with $68,582 in first quarter 2001. The increase in
interest expense was due primarily to the increase in Convertible
Debentures and continuing current debt financing arrangements.                                                             
| 
| |  | Operating losses decreased to $286,243 first quarter 2002 from
$451,343 in first quarter 2001. This represented a 37% decrease in
operating losses.                                                                                                                                                                                     

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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 March 31, 2002 and March 31, 2001 we had working capital
deficits of approximately $1,774,326 and $2,266,683 respectively. Our
independent certified public accountants stated in their report on the 2001
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 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 three months ended March 31, 2002 we borrowed $204,000 by
way of the issuance of Convertible Debentures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | During the three months ended March 31, 2002 two Convertible
Debentures with principal balances of $50,404 and accrued interest of
$4,762 were converted into 1,100,000 shares of common stock at an
average conversion rate of $0.05 per share.                                                                                                                                                                                                                                                                                                                                              
| 
| |  | During the three months ended March 31, 2002, 90,170 common shares
were issued to an employee under the terms of their employment
contract. The effective price per share was $0.033.                                                                                                                                                                                                                                                                                                                                                                                                         
| 
| |  | During the three months ended March 31, 2002, accounts receivable
increased by $110,455 to $268,582 from $158,127 at December 31, 2001.
This increase is attributable to our increased sales level.                                                                                                                                                                                                                                                                                                                                                                                           
| 
| |  | During the three months ended March 31, 2002, inventory decreased by
7.4 % to $542,794 compared with $586,313 at December 31, 2001. The
decrease is due to increased sales activity in the first quarter.
SunSwipe inventory currently accounts for 68% of our total inventory.                                                                                                                                                                                                                                                                                                               
| 
| |  | We plan to utilize our current debt financing arrangements and pursue
additional equity and debt financing while managing cash flow in an
effort to provide funds to increase revenues to support operation,
research and development activities. We believe that our long-term
success depends on revenues from operations from product sales and
ongoing royalties from technologies. If such sources of funds are not
adequate, we may seek to obtain financing to meet operating and
research expenses from other sources including, but not limited to,
future equity or debt financings.
| 
| |  | As of May 3, 2002, we have cash of approximately $17,870 and during
May and June, we expect cash flow of $300,000 from operating
activities, private placements and possible sale of marketable
securities. This level of liquidity should be sufficient to operate
the Company for 180 days. The Company anticipates increasing sales,
reduced operating expenses, and additional private placement funding
will contribute to continuous operations of the Company.                                                                                                                         

13



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| |  | 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. 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.

PART II

OTHER INFORMATION

Item 1.    Legal Proceedings

There have been no changes in the previously reported litigation.

Item 5.    Other Information

Veridien and E.I. du Pont de Nemours and Company have entered into an exclusive
global distribution agreement to market Veridiens line of sunscreen
towelettes. DuPont has commenced marketing Veridiens towelettes in the Mass
Merchandise, First Responder, Household & Consumer, Industrial & Institutional,
and Pool & Spa markets.

Veridien and DuPont have also signed a 90 day interim distribution agreement
for all Viraguard® products worldwide. This agreement will be in place as
DuPont and Veridien work to complete an exclusive global distribution agreement
for Viraguard® product(s). DuPont has commenced marketing of Viraguard®
products in the sanitation industry and the First Responder markets in the
United States and Canada.







14



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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 |  | May 14, 2002 |  | By |  | /s/ Sheldon C. Fenton                         
|     |  |              |  |    |  |                                               
|     |  |              |  |    |  | Sheldon C. Fenton
Chief Executive Officer     
|    
|    
|Date |  | May 14, 2002 |  | By |  | /s/ Rene A. Gareau                            
|     |  |              |  |    |  |                                               
|     |  |              |  |    |  | Rene A. Gareau
Exec.Vice President & Secretary

15