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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM l0-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 for the quarterly period ended DECEMBER 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for the transition period from  to .
 Commission File Number. 0-15113
 VERITEC,
INC.
  Nevada
    
    95-3954373(State or Other Jurisdiction of
    
    (IRS EmployerIncorporation or Organization)
    
    Identification No.)2445 Winnetka Avenue N. Golden Valley, MN
    
    55427(Address of Principal Executive Offices)
    
    (Zip Code)
 (763) 253-2670
 þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
 o þ
 þ o




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TABLE OF CONTENTS
 Page No.PART I
    
    
    3ITEM 1 FINANCIAL STATEMENTS
    
    
    3ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    12ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    
    
    15ITEM 4 CONTROLS AND PROCEDURES
    
    
    15PART II
    
    
    16ITEM 1 LEGAL PROCEEDINGS
    
    
    16ITEM 1A RISK FACTORS
    
    
    17ITEM 6 EXHIBITS
    
    
    17SIGNATURES
    
    
    18Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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ITEM 1 FINANCIAL STATEMENTS
 VERITEC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    June 30,2008
    
    
    2008(Unaudited)ASSETSCurrent Assets:Cash
    
    $
    172,538
    
    
    $
    334,702Accounts receivable, net
    
    
    24,350
    
    
    
    35,125Inventories
    
    
    16,248
    
    
    
    30,632Prepaid expenses
    
    
    48,150
    
    
    
    3,150Total Current Assets
    
    
    216,286
    
    
    
    403,609Property and Equipment, net
    
    
    71,449
    
    
    
    81,901Other assets
    
    
    43,756
    
    
    
    43,756Total Assets
    
    $
    376,491
    
    
    $
    529,266LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current Liabilities:Accounts payable
    
    $
    81,535
    
    
    $
    128,498Accrued expenses
    
    
    331,563
    
    
    
    214,018Total Current Liabilities
    
    
    413,098
    
    
    
    342,516Commitments and ContingenciesStockholders Equity:Convertible preferred stock, par value $1.00; authorized
10,000,000 shares, 276,000 shares of Series H authorized,
1,000 shares issued
    
    
    1,000
    
    
    
    1,000Common stock, par value $.01; authorized 20,000,000 shares,
15,115,088 shares issued
    
    
    151,151
    
    
    
    151,151Additional paid-in capital
    
    
    13,687,055
    
    
    
    13,674,471Accumulated deficit
    
    
    (13,875,813
    )
    
    
    (13,639,872
    )Total Stockholders Equity (Deficit)
    
    
    (36,607
    )
    
    
    186,750Total Liabilities and Stockholders Equity (Deficit)
    
    $
    376,491
    
    
    $
    529,266
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VERITEC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended December 31,2008
    
    
    2007License and other revenue
    
    $
    268,327
    
    
    $
    583,427Cost of Sales
    
    
    64,351
    
    
    
    54,805Gross Profit
    
    
    203,976
    
    
    
    528,622Operating Expenses:Selling, general and administrative
    
    
    255,058
    
    
    
    317,027Research and development
    
    
    135,277
    
    
    
    150,313Total Operating Expenses
    
    
    390,335
    
    
    
    467,340Income/(Loss) from Operations
    
    
    (186,359
    )
    
    
    61,282Other Income:Interest income
    
    
    891
    
    
    
    5,498Net Income/(Loss)
    
    $
    (185,468
    )
    
    $
    66,780Income/(Loss) Per Common ShareBasic and Diluted
    
    $
    (0.01
    )
    
    $
    0.00
   Page 4 of 23




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VERITEC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Six months ended December 31,2008
    
    
    2007License and other revenue
    
    $
    700,859
    
    
    $
    653,641Cost of Sales
    
    
    127,946
    
    
    
    85,692Gross Profit
    
    
    572,913
    
    
    
    567,949Operating Expenses:Selling, general and administrative
    
    
    576,434
    
    
    
    671,963Research and development
    
    
    234,372
    
    
    
    290,276Total Operating Expenses
    
    
    810,806
    
    
    
    962,239Loss from Operations
    
    
    (237,893
    )
    
    
    (394,290
    )Other Income:Interest income
    
    
    1,952
    
    
    
    14,055Gain on sale of property and equipment
    
    
    
    
    
    
    985Total Other Income
    
    
    1,952
    
    
    
    15,040Net Loss
    
    $
    (235,941
    )
    
    $
    (379,250
    )Loss Per Common ShareBasic and Diluted
    
    $
    (0.02
    )
    
    $
    (0.03
    )
   Page 5 of 23




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VERITEC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months ended December 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (235,941
    )
    
    $
    (379,250
    )Adjustments to reconcile net loss to net cash used by operating activities:Depreciation
    
    
    19,469
    
    
    
    15,094Amortization of software license
    
    
    
    
    
    
    16,352Stock based compensation
    
    
    38,834
    
    
    
    39,853Interest income added to note receivable from RBA
    
    
    
    
    
    
    (5,284
    )Services applied to reduce note receivable from RBA
    
    
    
    
    
    
    57,750Gain on sale of property and equipment
    
    
    
    
    
    
    (985
    )Reverse allowance for note receivable from RBA
    
    
    
    
    
    
    (48,000
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    10,775
    
    
    
    (29,929
    )Inventories
    
    
    14,384
    
    
    
    6,198Prepaid expenses
    
    
    (45,000
    )
    
    
    14,675Accounts payables and accrued expenses
    
    
    44,332
    
    
    
    (184,515
    )Net cash used by operating activities
    
    
    (153,147
    )
    
    
    (498,041
    )CASH FLOWS FROM INVESTING ACTIVITIESAdvances on note receivable
    
    
    
    
    
    
    (50,950
    )Purchase of property and equipment
    
    
    (9,017
    )
    
    
    (22,750
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    985Net cash used in investing activities
    
    
    (9,017
    )
    
    
    (72,715
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds on subscription receivable (including $7,557 interest
credited to additional paid-in capital)
    
    
    
    
    
    
    111,111NET DECREASE IN CASH
    
    
    (162,164
    )
    
    
    (459,645
    )CASH AT BEGINNING OF PERIOD
    
    
    334,702
    
    
    
    790,089CASH AT END OF PERIOD
    
    $
    172,538
    
    
    $
    330,444NONCASH ACTIVITIESIssuance of common stock for accrued expenses
    
    $
    
    
    
    $
    27,450
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® ®
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Net income
    
    $
    66,780Weighted average shares outstanding
    
    
    15,113,088Incremental shares from assumed exercise or conversion of
dilutive instruments:Options
    
    
    18,007Preferred Stock
    
    
    10,000Shares outstanding  diluted
    
    
    15,141,095Income per common share  diluted
    
    $
    0.00
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Number of
    
    
    Weighted - AverageShares
    
    
    Exercise PriceOutstanding at June 30, 2008
    
    
    267,749
    
    
    $
    0.82Granted
    
    
    464,000
    
    
    $
    0.29Outstanding at December 31, 2008
    
    
    731,749
    
    
    $
    0.48
         Page 10 of 23




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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Results of Operations  December 31, 2008 compared to December 31, 2007
  License and Other Revenues
    Cost of Goods Sold
   Page 12 of 23




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Operating Expenses
    Other Income (Expense)
   Page 13 of 23




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Liquidity
  Commitments and Contractual Obligations
    Off-Balance Sheet Arrangements
  Critical Accounting Policies
    Page 14 of 23




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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4 CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   Page 15 of 23




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Internal Control over Financial Reporting
  
  
 ITEM 1 LEGAL PROCEEDINGS
    Page 16 of 23




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ITEM 1A  RISK FACTORS
  
 ITEM 6 EXHIBITS
 31.1
    
    CEO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934.31.2
    
    CFO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934.32.1
    
    Veritec, Inc. Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. §1350).32.2
    
    Veritec, Inc. Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. §1350).
  Page 17 of 23




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SIGNATURES
   By
    
    /s/ Jeffrey Hattara

Jeffrey Hattara
    
    
    
    February 13, 2009President, Chief Executive OfficerBy
    
    /s/ Gerald Fors

Gerald Fors
    
    
    
    February 13, 2009Chief Financial Officer
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EXHIBIT INDEX
 31.1
    
    CEO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934.31.2
    
    CFO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934.32.1
    
    Veritec, Inc. Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. §1350).32.2
    
    Veritec, Inc. Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. §1350).
  Page 19 of 23