--------------------------------------------------------------------------------
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
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                                   FORM 10-QSB
(Mark One)

     X   QUARTERLY  REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
  -----  ACT OF 1934  (No fee required)

              For the quarterly period ended     September 30, 2001
                                                 ------------------
         TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (D) OF THE  SECURITIES
  -----  EXCHANGE ACT OF 1934

          For the transition period from ___________ to _______________

Commission file number   0-15113
                         -------

                                  VERITEC INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

                                     NEVADA
         -------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   95-3954373
                      -----------------------------------
                      (IRS Employer Identification Number)

                     1163 Kruse St., WEST ST. PAUL MN 55118
    ---------------------------------------------------------------------
               (Address of principal executive offices, zip code)

                                  651-552-9215
               --------------------------------------------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 15 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports);  and (2) has been subject to such
filing requirements for the past 90 days. Yes  X No
                                              ---  ---
         APPLICABLE  ONLY TO  CORPORATE  ISSUERS:  Indicate the number of shares
outstanding  of each of the  issuer's  classes of common  stock as of the latest
practicable date. As of September 30, 2001 the company had:

                        Number of Shares of Common Stock
            -------------------------------------------------------
                                    6,595,849
            -------------------------------------------------------
                                       1
<PAGE>
                          PART I. FINANCIAL INFORMATION
                          -----------------------------
Item 1.  Financial Statements
-----------------------------
                                   VERITEC INC
                                 BALANCE SHEETS
                                   (unaudited)

                                                 30-Sep-01           30-Jun-01
                Assets
Current Assets
Cash                                          $      5,141       $       4,405
Receivables                                         17,364               3,758
Inventories                                              -                   -
Prepaids                                               663               9,792
                                              ------------       -------------
Total Current Assets                                23,168              17,955

Fixed Assets (net)                                  15,742              17,740
Intangible assets (net)                            123,337             133,336
                                              ------------       -------------
Total Assets                                  $    162,247       $     169,031
                                              ============       =============
        LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities

Notes payable                                 $                  $      25,000
Notes Payable (secured)                                  -                   -
Convertible note (secured)                         397,374             397,374
Bank overdraft                                           -                   -
Accounts payable & accrued expenses                146,558             298,148
Disputed payables                                  217,702             217,702
                                              ------------       -------------
Total current liabilities                          761,634             938,224
                                              ------------       -------------
Prepayment on stock & subscription receivable      214,122             219,678

Stockholders' equity (deficit)
  Preferred stock, par value $1.00, authorized     366,007             366,007
  10,000,000 shares, 275,000 shares of Series
               H authorized
Common stock, par value $.01, authorized            66,958              66,958
            20,000,000 shares
Subscription receivable                         (1,078,139)         (1,106,271)
Additional paid in capital                      11,640,902          11,613,478
Accumulated deficit                            (11,809,237)        (11,929,043)
                                              ------------       -------------
Stockholders' equity (deficit)                    (813,509)           (988,871)
                                              ------------       -------------
Total liabilities & stockholders' equity      $    162,247       $     169,031
                (deficit)                     ============       =============


                        See Notes To Financial Statements

                                       2
<PAGE>
                          VERITEC INC
                    STATEMENTS OF OPERATIONS
                          (unaudited)
                                          For the quarter ending

                                     30-Sep-01         30-Sep-00
                                     ---------       -----------
Revenues

Total Revenues                       $ 268,738       $    79,854
Cost of Sales                                -            19,349
Gross Profit                           268,738            60,505

Sales commissions                            -             2,488

 Gross profit after commissions &      268,738            58,017
             warranty

Expenses:

Administration                       $  88,402       $   192,891
Sales & Marketing                        3,816                 -
Engineering & R&D                       46,265             1,692
                                     ---------       -----------
Total Expenses                         138,483           194,583
Gain (loss) from operations            130,255          (136,566)
Other Income (expense)

Interest income (expense) net          (10,449)           (1,713)
Total other income (expense)           (10,449)           (1,713)
                                     ---------       -----------
Net Income (loss)                    $ 119,806       $  (138,279)
                                     =========       ===========
Earning (loss) per share               $.02             ($.02)








                        See Notes To Financial Statements













                                       3
<PAGE>
                                   VERITEC INC
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                     For the quarter ending

                                                    30-Sep-01      30-Sep-00
                                                    ---------      ---------
Cash flow from operating activities
Net income (loss)                                    $119,806     $ (138,279)
    Adjustments to reconcile net income (loss) to net cash from operating
                                 activities
Depreciation and amortization                          11,997          9,956
(Increase) decrease in assets
Receivables                                           (13,606)       (34,704)
Inventories                                                 -        (11,403)
Prepaids                                                9,129
                                                                      (8,000)
Increase (decrease) in liabilities                    (25,000)             -
Accounts payable & accrued expenses                  (151,590)       149,718
Changes in secured liabilities                              -          3,212
Bank overdraft                                              -        (30,168)
                                                    ---------      ---------
Net cash used by operating activities                 (49,264)       (59,668)

Cash flow from financing activities
Prepayment on subscription receivable                  (5,556)         4,444
Subscription  receivable  and  related                 55,556         55,525
imputed interest

Net cash provided by financing activities              50,000         59,969

Net cash increase for period                              736            301
Cash at beginning of the period                         4,405          3,964
rounding                                                    -             (1)

Cash at the end of the period                       $   5,141      $   4,264
                                                    =========      =========
                        See Notes To Financial Statements


Basis of Presentation

         The unaudited financial  statements presented herein have been prepared
by us,  without  audit,  pursuant  to the  rules  and  regulations  for  interim
financial  information  and the  instructions to Form 10-QSB and Regulation S-B.
Accordingly,  certain information and footnote  disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principals have been omitted.  These unaudited consolidated financial statements
should be read in  conjunction  with the financial  statements and notes thereto
included in our Report on Form  10-KSB for the fiscal year ended June 30,  2001.
In the opinion of our management, the unaudited financial statements reflect all
adjustments  (consisting of normal recurring accruals only), which are necessary
to present fairly the consolidated  financial  position,  results of operations,
and changes in cash flow of our company.  Operating  results for interim periods
are not  necessarily  indicative  of the results  which may be expected  for the
entire year.
                                       4
<PAGE>
Cash
----
         Cash balances are  maintained in a single  financial  institution.  The
balances from time to time exceed the federally insured limits of $100,000.  The
company has  experienced no losses in these accounts and believes that it is not
exposed to any significant risk of loss on its cash balances.  The cost and fair
market value of any financial instruments held are approximately equal.

Revenues
--------
         Revenues from products and  engineering  sales are recognized  when the
products  are shipped and  services  preformed.  Royalties  and license fees are
recognized upon completion of the terms of the agreement.

         Foreign  based revenue  accounted  for 50% of the revenues  earned from
sales of product and royalties  during this  quarter.  All sales of products for
the  quarter  were  received  in United  States  dollars.  There was no currency
exchange risk.


Item 2.  Management's Discussion and Analysis
---------------------------------------------
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND RESUTS OF
OPERATIONS.


Convertible note (secured)
--------------------------
         On December 7th, 2000, The Mathews Group completed their "step-in-shoe"
acquisition of the Gant Group promissory note, which was secured by our patents.
The $397,374 note bears 10%  interest,  and is due on demand for either cash, or
is  convertible  into  Veritec  common stock at $0.10 per share.  Conversion  is
solely at the option of the Mathews Group.

Liquidity and Capital Resources

Debt owed by us at September 30, 2001 was as follows

                                      (unaudited)   (unaudited)      increase
                                        30-Sep-01     30-Jun-01     (decrease)
                                      -----------   -----------     ----------

Convertible note (secured)            $   397,374   $   397,374             -

Accounts payable & accrued expenses       364,260       515,850       151,590
                                      -----------   -----------     ---------
Total liabilities                     $   761,634   $   913,224     $ 151,590
                                      ===========   ===========     =========

    Our working capital of the company is shown below.

                                        30-Sep-01     30-Jun-01
                                      (unaudited)   (unaudited)
                                      -----------   -----------
Working capital (deficit)             $ (520,764)   $ (702,567)
                                      -----------   -----------

                                       5
<PAGE>
Financial and Operational Outlook
---------------------------------
Revenues for the quarter ended September 30, 2001, $268,738. These revenues were
for VeriCode(R) readers, software, and royalties from Mitsubishi.

We do not expect  revenues  from  operations  to be  adequate to meet all of our
costs and expenses for the remainder of the fiscal year. We must secure adequate
and stable financing to allow us to meet the selling  opportunities  that exist.
We are continuing to solicit present  customers,  develop future customers,  add
sufficient  staff,  and raise  additional  investment  in order to increase  our
sales.  However,  there is no assurance that any of these efforts will result in
additional sales sufficient to generate  adequate revenues to meet the costs and
expenses of operations.

In August 2001 we moved our  engineering  offices from Golden  Valley MN to West
Saint Paul, MN. Our main telephone number is 651-552-9215.


Results of Operations
---------------------

Revenues for the quarter ended September 30, 2001, $268,738,  were significantly
higher  than  revenues  of $81,252  for the same  quarter  ending in 2000.  This
represents  a  231%  increase.  This  increase  reflected  increased  use of our
VeriCode(R)  readers  in the  LCD  manufacturing  business.  Purchases  in  this
industry  fluctuate as new  factories  are opened,  so there can be no assurance
that such sales levels can be  maintained.  Notably the cost of sales  decreased
from 24% of revenue in the quarter  ended  September 30, 2000 to 0% for the most
recent quarter. This significant improvement reflects our goal to concentrate on
selling software rather than hardware.


         Operating  expenses decreased for the quarter ended September 30, 2001,
to $140,483.  This represents a 23% decrease from the same quarter in 2000. This
decrease includes a significant decrease in general and administrative expenses,
which  were  high in 2000  due to  expenses  associated  with  transferring  our
business from California to Minnesota.  Engineering  expenses were higher in the
current  quarter,  reflecting the fact that in the quarter ending  September 30,
2000 we were in transition and not engaged in product  development.  We also pay
less rent in our new  engineering  offices than in the same quarter of 2000.  We
have  also  converted  to  full-time  engineering  staff  instead  of  employing
consultants.  Engineering and  development  staff costs were recorded as general
and  administrative  expenses  in  2000,  and for  2001  are now  classified  as
engineering R&D.

                                For the Quarter Ending September 30,
Expense category                     2001        2000       Increase/(decrease)
                                     ----        ----       -------------------

General and Administrative      $  88,402  $  192,891       $(104,489)
Sales and marketing                 3,816           -           3,816
Engineering, R&D                   48,265       1,692          46,573
                                ---------  ----------       ---------
                                $ 140,483  $  194,583       $ (54,100)
                                =========  ==========       ==========

                                       6
<PAGE>
Capital Expenditures and Future Commitments
-------------------------------------------

         No  capital  expenditures  were  made  during  the  period  for  office
equipment.  There are no current  commitments for material capital  expenditures
during the next 9 months.  The amount of such  additional  capital  required  is
uncertain and may be beyond that which is generated from operations.


Factors that may effect future results.
---------------------------------------
         The Matthews  Group  continues to make payments of $18,518.52 per month
as required by the subscription agreement.  The Matthews Group has, from time to
time,  advanced amounts in addition to the required monthly payment as needed to
finance our  continued  operations.  We will require  financing in excess of the
Matthews Group's  commitment until revenue  increases  sufficiently to cover our
expenses. There is no formal commitment on the part of the Matthews Group or any
other person to provide additional cash.

                            PART II OTHER INFORMATION
                            -------------------------

Item 1.  Legal Proceedings.
---------------------------
         As explained  more  completely  in our Form 10-KSB filed for the period
ending June 30, 2001, a shareholder is suing the company and various individuals
alleging actions were taken without proper authority of the corporation's  board
of directors and/or contrary to the plan of reorganization the corporation filed
and completed under Chapter 11 of the U.S. Bankruptcy Act. Subsequent to the end
of the period  represented  by this Form  10-QSB an answer was filed and motions
submitted  to dismiss  this  action.  Results of these  answers  and motions are
pending at this time.


Item 2.  Changes in Securities.
-------------------------------
         None.

Item 3.  Defaults Upon Senior Securities.
-----------------------------------------
         None.

Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

         No matters  were  submitted  to a vote of security  holders  during the
period covered by this report.

Item 5.  Other Information.
---------------------------
         None.

Item 6.  Exhibits and Reports on Form 8-K.
------------------------------------------
None.

                                       7
<PAGE>
                                   SIGNATURES
                                   ----------
In accordance with  requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                               Veritec  Inc.
                                               --------------------------------

Date:             Nov 13  2001                 /s/ Van Tran
         ----------------------------          --------------------------------
                                               Van Tran - CEO

Date:             Nov 13  2001                 /s/ Jerry Fors
         ----------------------------          --------------------------------
                                               Jerry Fors -  CFO










































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