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

  X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
-----      EXCHANGE ACT OF 1934

              For the quarterly period ended     March 31, 2004

           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)

               2445 Winnetka Avenue North, Golden Valley, MN 55427
            ---------------------------------------------------------
               (Address of principal executive offices, zip code)

                                  763-253-2670
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution  of securities  under a plan  confirmed by a court.  Yes X No
                                                                     ---  ---
                       [Please check appropriate response]
                       -----------------------------------


                                       1
<PAGE>
                      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 May 10, 2004
the Company had:

                        Number of Shares of Common Stock
            -------------------------------------------------------
                                    7,141,849
            ------------------------------------------------------

   Transition Small Business Disclosure Format (check one):  Yes       No X
   --------------------------------------------------------      -----   -----












































                                       2
<PAGE>
Table of Contents
-----------------


                                  FORM 10-QSB/A
                                  VERITEC INC.

                                      INDEX
                                                                       Page

PART I.  FINANCIAL INFORMATION                                            4

Item 1.  Financial Statements                                             4
Item 2.  Management's Discussion and Analysis or Plan of Operation       12
Item 3.  Controls and Procedures                                         15

PART II. OTHER INFORMATION                                               16

Item 1.  Legal Proceedings                                               16
Item 5.  Other Information
Item 6.  Exhibits and Reports on Form 8-K                                17

SIGNATURES                                                               17


































                                       3
<PAGE>
                          PART I. FINANCIAL INFORMATION
                          -----------------------------
                          Item 1. Financial Statements
                          ----------------------------
                                  VERITEC INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                                   March 31,       June 30,
                                                     2004            2003
                                                --------------  --------------
ASSETS                                           (Unaudited)      (Audited)
Current Assets:
 Cash                                           $    459,833    $   325,193
 Accounts receivable, net                            284,551        185,174
 Inventories                                          40,379         11,585
 Prepaid expenses                                     22,001         32,791
                                                ------------    -----------
Total current assets                                 806,764        554,743

Fixed assets, net                                     11,173         14,669
Technology and software costs, net                    84,154        119,874
Other                                                 28,418          7,827
                                                ------------    -----------
Total assets                                    $    930,509    $   697,113
                                                ============    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
Notes payable - related parties                 $    640,000    $   340,000
Convertible notes - related party                    497,374        497,374
Current maturities of long-term debt                 117,569        109,878
Accounts payable and accrued expenses              1,460,251      1,038,019
Customer deposits                                      3,884          2,912
                                                ------------    -----------
Total current liabilities                          2,719,078      1,988,183
                                                ------------    -----------
Long-term debt                                       202,955        256,720
                                                ------------    -----------
Prepayment on stock subscription receivable           75,367        242,033
                                                ------------    -----------
Stockholders' equity (deficit):
Preferred stock, par value $1.00, authorized
 10,000,000 shares, 275,000 shares of Series H
 authorized, 76,000 shares  outstanding,  each
 share convertible to 10 shares of common stock      366,007        366,007
Common stock, par value $.01, authorized 20,000,000
 shares, 7,141,849 and 7,126,849 shares outstanding   71,418         71,268
Subscription receivable                             (754,712)      (860,326)
Additional paid in capital                        11,986,793     11,922,440
Accumulated deficit                              (13,750,228)   (13,288,631)
Accumulated other comprehensive income (loss)         13,831           (581)
                                                ------------    -----------
    Stockholders' equity (deficit)                (2,066,891)    (1,789,823)
                                                ------------    -----------
    Total liabilities and stockholders'
     equity (deficit)                           $    930,509    $   697,113
                                                ============    ===========
            See Notes to Condensed Consolidated Financial Statements.
                                       4
<PAGE>
                                  VERITEC INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                    Three months ended March 31,
                                                    ----------------------------
                                                         2004          2003
                                                     ------------  ------------
Revenues                                             $   678,701   $   523,936
Cost of sales                                             53,473       196,885
                                                     -----------   -----------
Gross profit                                             625,228       327,051
                                                     -----------   -----------
Operating expenses
  Selling, general and administrative                    586,795       565,824
  Research and development                                42,745        79,407
  Depreciation and amortization                           11,857        11,650
                                                     -----------   -----------
Total operating expenses                                 641,397       656,881
                                                     -----------   -----------
Loss from operations                                     (16,169)     (329,830)
                                                     -----------   -----------
Other income (expense):

  Interest expense, net                                  (33,711)      (73,691)
  Other income, net                                        3,200        23,276
  Minority interest in Veritec Iconix Ventures, Inc.          --        35,937
                                                     -----------   -----------
Total other income (expense)                             (30,511)      (14,478)
                                                     -----------   -----------
Loss before income taxes                                 (46,680)     (344,308)
Income tax expense                                           477           370
                                                     -----------   -----------
Net loss                                             $   (47,157)  $  (344,678)
                                                     ===========   ===========
Net loss per common share:
  Basic                                              $     (0.01)  $     (0.05)
                                                     ===========   ===========
  Diluted                                            $     (0.01)  $     (0.05)
                                                     ===========   ===========
















            See Notes to Condensed Consolidated Financial Statements.
                                       5
<PAGE>
                                  VERITEC INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                     Nine months ended March 31,
                                                     ---------------------------
                                                          2004         2003
                                                      ------------ ------------
Revenues                                              $ 1,631,068  $ 1,843,166

Cost of sales                                             224,952      639,814
                                                      -----------  -----------
Gross profit                                            1,406,116    1,203,352
                                                      -----------  -----------
Operating expenses
  Selling, general and administrative                   1,638,226    1,483,675
  Research and development                                153,683      277,403
  Depreciation and amortization                            35,567       35,169
                                                      -----------  -----------
Total operating expenses                                1,827,476    1,796,247
                                                      -----------  -----------
Loss from operations                                     (421,360)    (592,895)
                                                      -----------  -----------
Other income (expense):
  Interest expense                                        (96,701)    (114,295)
  Other income, net                                        57,848       70,497
  Minority interest in Veritec Iconix Ventures, Inc.           --       12,413
                                                      -----------  -----------
Total other expense                                       (38,853)     (31,385)
                                                      -----------  -----------
Loss before income taxes                                 (460,213)    (624,280)

Income tax expense                                          1,384        1,113
                                                      -----------  -----------
Net loss                                              $  (461,597) $  (625,393)
                                                      ===========  ===========
Net loss per common share:
   Basic                                              $     (0.07) $     (0.09)
                                                      ===========  ===========
   Diluted                                            $     (0.07) $     (0.09)
                                                      ===========  ===========















            See Notes to Condensed Consolidated Financial Statements.
                                       6
<PAGE>
                                  VERITEC, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                    Nine months ended March 31,
                                                    ---------------------------
                                                         2004         2003
                                                    ------------- -------------
Cash flows from operating activities:
  Net loss                                          $   (461,597) $   (625,393)
  Adjustments to reconcile net loss to
  net cash used by operating activities:
    Depreciation and amortization                         35,567        35,562
 Changes in operating assets and liabilities:
  Accounts receivable                                    (99,378)          220
  Inventories                                            (28,794)       66,287
  Prepaid expenses                                        28,655      (133,749)
  Accounts payable and accrued expenses                  422,235       341,656
  Customer deposits                                          972         7,682
                                                    ------------  ------------
Net cash used by operating activities                   (102,340)     (307,735)
                                                    ------------  ------------
Cash flows from investing activities:
  Minority interest in Veritec Iconix Venture, Inc.           --       (14,725)
                                                    ------------  ------------
Cash flows from financing activities:
  Proceeds  from stock issuance, subscription
    receivable, and prepayment on stock                    3,451        75,000
  Proceeds from notes payable - related parties          300,000       187,527
  Proceeds from (payments on) long-term debt, net        (46,075)       80,721
                                                    ------------  ------------
Net cash provided by financing activities                257,376       343,248
                                                    ------------  ------------
Effect of exchange rate changes                          (20,396)       33,252
                                                    ------------  ------------
Increase in cash                                         134,640        54,040

Cash at beginning of period                              325,193       158,760
                                                    ------------  ------------
Cash at end of period                               $    459,833  $    212,800
                                                    ============  ============















            See Notes to Condensed Consolidated Financial Statements.
                                       7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared  in  accordance  with  United  States  of  America  generally  accepted
accounting   principles  for  interim   financial   information   and  with  the
instructions to Form 10-QSB and Article 10 of Regulation S-X.  Accordingly,  the
financial  statements  do  not  include  all of the  information  and  footnotes
required by United States of America generally  accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the nine-month  period
ended March 31, 2004 are not  necessarily  indicative of the results that may be
expected for the year ended June 30, 2004. For further information, refer to the
financial  statements and footnotes  thereto included in our Form 10-KSB for the
year ended June 30, 2003.

Certain  amounts  presented  in  the  2003  condensed   consolidated   financial
statements,  as previously  reported,  have been  reclassified to conform to the
2004 presentation. These reclassifications had no effect on net loss or net cash
flows for the period.

Net Loss per Common Share
-------------------------
Basic net loss per common  share is  computed by dividing  income  available  to
common stockholders by the weighted-average  number of common shares outstanding
for the period.  Diluted  loss per common  share,  in  addition to the  weighted
average  determined for basic earnings per share,  includes  potential  dilution
that could occur if  securities  or other  contracts  to issue common stock were
exercised or  converted  into common  stock.  Potentially  dilutive  instruments
include stock options and warrants,  Series H Preferred  stock,  and convertible
notes  payable.  For the  three-months  ended  March  31,  2004 and 2003 and the
nine-months  ended March 31,  2004 and 2003,  the stock  options  and  warrants,
Series  H  Preferred  stock,  and  convertible  notes  were  antidilutive,   and
therefore,  were not  included in the  computations  of diluted  loss per common
share.

Cash
----
Cash balances are maintained in financial  institutions in the United States and
Japan.  The  balances  from time to time  exceed  the  insured  limits.  We have
experienced  no losses in these  accounts and believe that we are not exposed to
any significant  risk of loss on our cash balances.  The cost  approximates  the
fair market value of the financial instruments.

Accounts Receivable
-------------------
The  Company  sells to  domestic  and  foreign  companies.  The  Company  grants
uncollateralized  credit to customers,  but requires  deposits on unique orders.
Management   periodically  reviews  its  accounts  receivable  and  provides  an
allowance  for doubtful  accounts  after  analyzing  the age of the  receivable,
payment history and prior experience with the customer.  The estimated loss that
management  believes  is probable is  included  in the  allowance  for  doubtful
accounts.  While the  ultimate  loss may differ,  management  believes  that any
additional  loss  will not have a  material  impact on the  Company's  financial
position.
                                       8
<PAGE>
Revenues
--------
The Company  accounts for revenue in accordance with Staff  Accounting  Bulletin
(SAB) 101 "Revenue Recognition in Financial  Statements." Revenues from software
sales, product sales and engineering are recognized when products are shipped or
services performed.  License fees are recognized upon completion of all required
terms under the  agreement.  The process  begins with a customer  purchase order
detailing its hardware  specifications so the Company can customize its software
to the  customer's  hardware.  Once  customization  is  completed,  the  Company
typically  transmits  the software to the customer  via the  Internet.  Once the
software is transmitted,  the customers do not have a right to refuse or return.
Revenue is recognized at that point.  Under some  agreements the customers remit
payment prior to the Company having completed customization or completion of any
other  required  services.   In  these  instances  the  Company  delays  revenue
recognition  and instead  reflects the  prepayments as customer  deposits in the
financial statements.

Research and Development
------------------------
Research and development costs are charged to expense as incurred.

Intangible Assets
-----------------
In  fiscal  2000,  the  Company  purchased   certain   software,   source  code,
documentation, manuals and other written material for $50,000 and 187,500 shares
of  restricted  common stock valued at $.80 per share.  The Company has recorded
this purchased software at cost, $200,000,  and is amortizing it over five years
using the straight-line method.

In fiscal 2003, the Company, through VIVI (as defined below) acquired technology
rights for the Delphi scanner for $85,243  ($80,000  cash;  25,000 shares of the
Company's common stock at $.20 per share; and $243 in incidental  costs).  These
technology rights are recorded at cost in the accompanying  financial statements
and are being  amortized on a straight-line  basis over their  estimated  useful
life of three years.

Going Concern
-------------
The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  shown  in the  accompanying  financial
statements,  the Company  recorded net loss of $47,157  during the quarter ended
March 31, 2004, and a net loss of $461,597 for the nine-month period ended March
31, 2004,  and has lost  $13,750,228  from inception to March 31, 2004. At March
31,  2004,  the  Company  had a  $1,912,314  working  capital  deficiency  and a
stockholders'  deficit of $2,066,891.  Those conditions raise  substantial doubt
about the  Company's  ability to  continue  as a going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this  uncertainty.  The  Company  has  relied on  receiving  financing  from The
Matthews Group LLC (see subscription receivable below).

Investment: Veritec Iconix Ventures, Inc. (VIVI)
------------------------------------------------
On January 30, 2002,  Veritec Inc.  and The  Matthews  Group LLC formed  Veritec
Iconix  Ventures,  Inc. (VIVI),  a Delaware  corporation.  Each owned 50% of the
outstanding  shares of common stock of VIVI. In April 2002,  The Matthews  Group


                                       9
<PAGE>
LLC loaned the Company $100,000,  of which $50,000 was subsequently used to make
the Company's  initial capital  contribution to VIVI. The promissory note to The
Matthews Group LLC bears interest at 10% per annum and is due December 31, 2004.
Additionally,  the  promissory  note is  convertible  into  common  stock of the
Company at $0.25 per share.

On February  13, 2002,  VIVI  entered into an agreement to purchase  100% of the
outstanding equity securities of Iconix, Inc., a Japanese corporation,  pursuant
to a Stock  Purchase  Agreement  dated  February  13,  2002,  by and among VIVI,
Iconix,  Inc.,  Masayuki Kuriyama and Yoshihiro Tasaka. The total  consideration
for the purchase  consisted of 300,000 shares of the Company's  common stock and
$100,000  in  U.S.  dollars.  The  150,000  shares  contributed  by the  Company
represented  newly issued  shares of the  Company's  common  stock.  The 150,000
shares contributed by The Matthews Group LLC represented a portion of the shares
already owned by The Matthews Group LLC.

On June 25, 2003,  Veritec entered into an agreement with The Matthews Group LLC
to purchase The Matthews Group's 50% ownership of VIVI at the acquisition  price
of $50,000 and 150,000 shares of stock,  the original price paid by The Matthews
Group LLC on  February  13,  2002.  The  Company  issued  150,000  shares to The
Matthews  Group LLC and a  promissory  note of  $50,000.  At the same time,  the
Company agreed to sell VIVI's  software  developed for the textile  industry and
certain  intangible  assets of its textile industry business to Com Techno Alpha
Inc., a Japanese  corporation.  As a part of the textile sale, Yoshihiro Tasaka,
the principal of Com Techno and a former employee and officer of VIVI, agreed to
return to the Company 120,000 shares of the Company's  common stock.  This stock
has been returned and was subsequently  cancelled. In November 2003, the Company
finalized  the  agreement  with Com Techno  under  which Com Techno will pay the
Company  8,100,000 yen at a rate of 225,000 yen per month for thirty-six  months
($67,782 and $1,883  respectively in U.S.  dollars).  The agreement provides for
acceleration  of payments to be received for each sale of a Tuft  Controller  by
COM Techno.  The textile  software  business  accounted for 33% of the Company's
sales in 2003 and 25% in 2002 (64% of VIVI's sales in 2003 and 69% in 2002).

Subscription Receivable
-----------------------
In September 1999, the Company accepted a commitment from The Matthews Group LLC
to  fund  the  $2,000,000  required  under  the  Company's  bankruptcy  plan  of
reorganization.  This funding is in the form of a promissory  note that requires
108 monthly  payments of $18,519.  These payments are  non-interest  bearing and
were to be collateralized by a pledge of properties  controlled by principals of
The Matthews  Group LLC. In July 2001,  the principals of The Matthews Group LLC
granted to the Company a security  interest in certain  California and Minnesota
properties to partially collateralize the subscription.  Imputed interest on the
subscription is excluded from operating results and is instead credited directly
to additional paid-in capital.

The Matthews  Group LLC is scheduled to fund the  subscription  receivable  with
monthly payments of $18,519.  As the Company  experienced  cash shortfalls,  The
Matthews  Group LLC made payments on the  subscription  receivable in advance of
the due dates.  Such  advance  payments  are  reflected  as a  liability  in the
financial statements in the Prepayment on Stock Subscription Receivable account.
At March 31,  2004,  The  Matthews  Group LLC had made  prepayments  of  $75,367
towards scheduled payments on the subscription receivable. At The Matthews Group
LLC's  discretion,  the  balance  in this  account  may be used to  satisfy  any


                                       10
<PAGE>
scheduled  payment due on the subscription  receivable.  When The Matthews Group
LLC does so, the Company reduces the Prepayment on Stock Subscription Receivable
account and credits the subscription receivable and additional  paid-in-capital.
Historically,  when the Company has experienced a cash  shortfall,  The Matthews
Group LLC has  continued to make its monthly  payments  due on the  subscription
receivable.  However, there is no contractual obligation for it to do so as long
as  prepayments  exist to satisfy  its  scheduled  payments.  The Company has no
advance  knowledge of whether,  in any given month,  The Matthews  Group LLC may
make a scheduled  payment on the subscription  receivable or utilize the balance
in the Prepayment on Stock Subscription Receivable account. The Company also has
no  assurance of The  Matthews  Group LLC's  ability to continue to provide this
funding.  Failure  of The  Matthews  Group  LLC to  continue  to make  scheduled
payments on the subscription  receivable  could negatively  impact the Company's
ability to meet its cash flow requirements.

The Matthews Group LLC's  prepayments  against the  subscription  receivable are
unsecured and  non-interest  bearing.  The Company  assumes that the  prepayment
existing at March 31, 2004 will ultimately be applied  against the  subscription
receivable.






































                                       11
<PAGE>
        Item 2. Management's Discussion and Analysis or Plan of Operation
        -----------------------------------------------------------------

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

General
-------
Veritec Inc. (the  "Company") was  incorporated  in Nevada on September 8, 1982.
The Company is primarily engaged in developing,  marketing and selling a line of
microprocessor-based  encoding and  decoding  system  products  that utilize its
patented Vericode Symbol technology. The Company's readers and scanners enable a
manufacturer  or  distributor  to attach  unique  identifiers  or coded  symbols
containing   binary   encoded  data  to  a  product   that   enables   automatic
identification  and  collection  of data.  The  Company has also  developed  its
Secured  Identification  System  with its VSCode  that  enables  the  storage of
biometric information of the two-dimensional VSCode for subsequent  verification
of its authenticity.

The Company has  incurred  losses from  operations  since  inception  and has an
accumulated deficit of $13,750,228 as of March 31, 2004.

In the Company's Form 10-KSB filed with the  Securities and Exchange  Commission
for the year ended June 30, 2003,  the Company  identified  critical  accounting
policies and estimates for its business.  The Company has not amended or changed
any of its critical  accounting  policies and estimates  since the filing of its
Form 10-KSB.

Filing of this Form  10-QSB/A  for the quarter  ended  March 31,  2004  properly
records $188,205 in additional legal fees relating to the Mitsubishi arbitration
that had been omitted from the initial filing.

Results of Operations - March 31, 2004 compared to March 31, 2003
-----------------------------------------------------------------
Revenues
--------
Revenues of $678,701 for the quarter ended March 31, 2004 were $154,765, or 30%,
higher than the quarter  ended March 31, 2003.  Revenues of  $1,631,068  for the
nine months ended March 31, 2004,  were  $212,098,  or 12%,  lower than the nine
months ended March 31, 2003.  The  decrease in sales for the  nine-months  ended
March 31, 2004,  compared to the nine-months  ended March 31, 2003 is related to
the June 2003 sale of VIVI's textile  software  business to Com Techno Alpha, as
after the sale,  the textile  revenues  ceased.  For the quarter ended March 31,
2004,  the  Company's  revenues  consisted  of  $120,447  from VIVI  (Japan) and
$558,254  from  United  States  operations.  Revenues  from  the  United  States
operation  for the quarter  increased  136% from 2003 and 2004 of  $236,660  and
$558,254,  respectively.  Revenues  from the United  States  operations  for the
nine-months  ended  March 31, 2004  increased  $499,668,  or 67%,  from the same
period ended March 31,  2003.  The increase for the three months ended March 31,
2004  primarily  relates to sales by the  Company's  major  distributor  Sun Jin
Neotech and new orders from the Liquid Crystal  Display (LCD)  manufacturers  in
Asia.

The Company  continues to concentrate  its efforts in the Asian market where the
Company believes it has the best opportunities to grow revenue.


                                       12
<PAGE>
Gross Profit
------------
Gross profit of $625,228 for the quarter ended March 31, 2004 was  $298,177,  or
91%,  higher than the quarter  ended March 31, 2003.  Gross profit of $1,406,116
for the nine months ended March 31, 2004 was $202,764,  or 17%,  higher than the
nine months ended March 31, 2003.  Gross profit  percentage  was 92% and 62% for
the  quarters  ended  March  31,  2004  and  2003,  respectively.  Gross  profit
percentage  was 86% and 65% for the nine  months  ended March 31, 2004 and 2003,
respectively.  The  increase  in gross  profit  percentage  is due to the higher
margin of our software  products  revenues in 2004.  The prior  period  included
VIVI's sales of software to customers in the textile  business that provided the
Company with lower margin.  VIVI's textile business was sold to Com Techno Alpha
in June 2003.

Operating Expense
-----------------
Selling,  general and  administrative  expenses for the quarter  ended March 31,
2004 were $20,971, or 4%, higher than the quarter ended March 31, 2003. Selling,
general and  administrative  expenses for nine- months ended March 31, 2004 were
$154,551,  or 10% higher than the nine-months ended March 31, 2003. The increase
is largely due to legal expenses related to the Mitsubishi  arbitration.  Filing
of this  Form  10-QSB/A  for the  quarter  ended  March  31,  2004 is due to the
recording of $188,205 in additional legal fees relating to this arbitration.  In
addition,  the Company  increased  staffing and  marketing  campaigns to promote
public  awareness  about the  Company  and to market  the  Company's  new VSCode
technology.

Research  and  development  expenses  for the quarter  ended March 31, 2004 were
$36,662,  or 46%,  lower than research and  development  expense for the quarter
ended March 31,  2003.  Research  and  development  expenses for the nine months
ended March 31, 2004 were  $123,720,  or 45%,  lower than the nine months  ended
March 31, 2003. The reduction in research and  development  expenses  relates to
reduced  staffing and contract labor expenses for  engineering  projects in 2003
that have been completed or are near completion.  These research and development
expense savings have shifted to the sales and marketing department to market the
new VSCode technology.

Capital Expenditures and Future Commitments
-------------------------------------------
No capital expenditures for equipment were made during either period.

On January 30, 2002,  Veritec Inc.  and The  Matthews  Group LLC formed  Veritec
Iconix Ventures,  Inc. ("VIVI"), a Delaware corporation.  Each company owned 50%
of the  outstanding  shares of common stock of VIVI. In April 2002, The Matthews
Group LLC loaned Veritec $100,000, and Veritec subsequently used $50,000 of this
amount to make its initial capital  contribution to VIVI. The promissory note to
The Matthews  Group LLC bears  interest at 10% per annum and is due December 31,
2004. Additionally, the promissory note is convertible into the Company's common
stock at $0.25 per share.

Subsequent to the formation of VIVI, on February 13, 2002,  VIVI entered into an
agreement to purchase 100% of the outstanding equity securities of Iconix, Inc.,
a Japanese corporation,  pursuant to a Stock Purchase Agreement,  dated February
13, 2002,  by and among VIVI,  Iconix,  Inc.,  Masayuki  Kuriyama and  Yoshihiro
Tasaka. The total  consideration for the purchase consisted of 300,000 shares of


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<PAGE>
Veritec  common  stock  and  $100,000  in  U.S.  dollars.   The  150,000  shares
contributed by Veritec  represented newly issued shares of its common stock. The
150,000 shares  contributed  by The Matthews Group LLC  represented a portion of
the shares of the Company's common stock already owned by it.

Although the Company continues to minimize spending for capital expenditures, it
believes its need for additional  capital equipment will continue because of the
need to develop and expand its business.  The amount of such additional  capital
is uncertain and may be beyond that generated from operations.

Liquidity and Capital Resources
-------------------------------
A number of  uncertainties  exist that may affect the Company's future operating
results.  These  uncertainties  include  general  economic  conditions,   market
acceptance of the Company's products and the Company's ability to manage expense
growth.  The Company has sustained  significant losses and expects the losses to
continue  through fiscal year 2004. The Company's cash on hand is not sufficient
to fund current  operating  needs.  Therefore,  the  continued  operation of the
Company will continue to be dependent on cash flows from The Matthews Group LLC.
There is no assurance that The Matthews Group LLC will complete the  obligations
or that the  payments  required  to be made by The  Matthews  Group  LLC will be
adequate. The Company is seeking additional debt or equity financing,  but there
is no assurance that  additional  financing  will be obtained,  or that any such
financing will be sufficient for the Company's needs.

Although   uncertainties  exist,   management  believes  that  cash  flows  from
operations will at least partially fund cash needs in 2004. Sales leads continue
to be strong.  Based on past success rates,  management believes a percentage of
these leads will purchase product. It is expected that cash from these new sales
will be more  towards  the second  half of  calendar  2004  through  fiscal 2005
because of the long cycle in the selling  process.  For 2004,  the Company  will
continue  to utilize  distributors  to help  market its  products.  The  Company
intends to generate  cash by  requiring  distributors  to pay a license fee that
will  offer  the  distributors   discounted   software  prices  and  allow  each
distributor to be more competitive in its marketing region.

Continued competition may drive down the price at which the Company can sell its
products,  and reduced capital  expenditures by the Company's customers may also
have a negative impact.

Net cash used in operating activities totaled $102,340 for the nine months ended
March 31, 2004 as compared to $307,735 of cash used for operating  activities in
the nine months ended March 31, 2003. Cash used by operating  activities for the
nine months ended March 31, 2004 consisted  primarily of net losses of $461,597,
increases in account receivable of $99,378 and inventories purchases of $28,794,
offset by  increases in account  payable and accrued  expenses of $422,235 and a
decrease  in  prepaid   expenses  of  $28,655.   The  Company  made  no  capital
expenditures  for the  quarter  and paid down  long-term  debt of  $46,075.  The
operating and  investing  cash flow deficits in nine months ended March 31, 2004
were  funded  through  proceeds  from  scheduled  payments  on the  subscription
receivable  of $166,671,  all of which was received from prior  prepayment,  and
borrowing of $300,000 from the Company's Chief Executive  Officer,  The Matthews
Group and an investor.  No  additional  monies were  received  from The Matthews
Group LLC on the  subscription  agreement  for the nine  months  ended March 31,
2004. As of March 31, 2004, the  prepayment  balance from The Matthews Group LLC


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<PAGE>
was $75,367.  This  prepayment  could be used by The Matthews Group LLC to cover
four  future  payments  under  the  subscription  receivable  agreement  or  the
remaining scheduled payments for fiscal year 2004. From July 1, 2003 through the
date of this report,  The Matthews Group LLC had used this prepayment to satisfy
all of its scheduled payments under the agreement.


Item 3.  Controls and Procedures
--------------------------------
Disclosure Controls and Procedures
----------------------------------
The  Company's  management,  with  the  participation  of  its  Chief  Executive
Officer/Chief   Financial  Officer,  has  evaluated  the  effectiveness  of  the
Company's  disclosure  controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934, as amended)
as of the end of the period  covered by this report.  Based on such  evaluation,
the Company's  Chief  Executive  Officer/Chief  Financial  Officer has concluded
that,  as of the end of such  period,  the  Company's  disclosure  controls  and
procedures are effective.

Internal Control over Financial Reporting
-----------------------------------------
There have not been any changes in the Company's internal control over financial
reporting  during the fiscal  quarter to which  this  report  relates  that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal control over financial reporting.

The Company's management,  including its Chief Executive Officer/Chief Financial
Officer,  does not expect  that its  disclosure  controls  and  procedures  will
prevent all error and all fraud. A control system,  no matter how well conceived
and operated,  can provide only  reasonable,  not absolute,  assurance  that the
objectives of the control system are met. Because of the inherent limitations in
all control systems,  no evaluation of controls can provide  absolute  assurance
that all control issues and instances of fraud,  if any, within the Company have
been  detected.  The design of any system of controls also is based in part upon
certain  assumptions about the likelihood of future events,  and there can be no
assurance  that any design will succeed in achieving  its stated goals under all
potential future conditions; over time, control may become inadequate because of
changes  in  conditions,  or the  degree  of  compliance  with the  policies  or
procedures  may   deteriorate.   Because  of  the  inherent   limitations  in  a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.















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<PAGE>
                            PART II OTHER INFORMATION
                            -------------------------
Item 1.  Legal Proceedings.
---------------------------
On June 30,  2000 the  Company  was  served  as a  defendant  in the  matter  of
Wolodymyr  M.  Starosolsky  vs.  Veritec,  Inc.,  et al.,  in the United  States
District Court for the Central District of California (Case Number  CV-00-7516DT
(Wx).  This suit was brought by a shareholder and former director of the Company
and named the Company and  various  individuals  as  defendants,  claiming  that
certain  corporate  actions were taken without proper authority of the Company's
board of directors  and/or  contrary to the plan of  reorganization  the Company
filed and  completed  under Chapter 11 of the U.S.  Bankruptcy  Act. The Company
denied all allegations  and in December 2000,  forced the case to be transferred
to the United States  District Court for the District of Minnesota.  The Company
expects discovery in this case to conclude by late 2004, and any trial would not
occur until early 2005.

On January 10, 2002, we initiated arbitration against Mitsubishi  Corporation in
Los   Angeles,   California,   alleging   breach  of   contract,   trade  secret
misappropriation and interference with business  opportunities;  seeking several
million  dollars  in  compensatory  damages,  punitive  damages,  legal fees and
accrued interest.  Mitsubishi  counterclaimed  on similar grounds,  also seeking
similar  damages and amounts.  The  arbitration  was split into two phases.  The
first phase,  completed in July 2003,  resulted in an interim  award  dismissing
most of our claims.  No decision on the second  phase,  completed  in  September
2004, has been issued by the arbitration  panel. A final  resolution is expected
prior to the end of 2004. Veritec is seeking $1.5 million in attorneys' fees and
costs if it  prevails  on the  second  phase.  Mitsubishi  has made a claim  for
compensatory damages of $11.25 million, punitive damages of $2 million and legal
fees and costs of $3.9 million in the second  phase.  No opinion can be given at
this time as to the final outcome of the arbitration.

In 2003 a former  employee  of the Company  asserted he was  entitled to a fully
vested option to purchase  100,000 shares of Company common stock at an exercise
price of $.088 per share.  The Company denies this claim.  This former  employee
has not proceeded further with this claim.  Should such a claim be pursued,  the
Company would defend this action vigorously.

The Company filed a lawsuit against Robotic Vision Systems, Inc. (RVSI) on March
20, 2003, in the United States District Court for the District of  Massachusetts
for breach of a confidentiality agreement, seeking damages in excess of $75,000.
By agreement of both parties, this case has been dismissed without prejudice.

Item 5.  Other Information.
---------------------------
FORWARD LOOKING STATEMENTS

This  report  contains  forward-looking  statements  within  the  meaning of the
securities  laws.  These  forward-looking  statements are subject to a number of
risks and  uncertainties,  many of which are beyond the Company's  control.  All
statements  other than  statements of historical  facts  included in this report
regarding  the  Company's  strategy,  future  operations,   financial  position,
estimated  revenues,   projected  costs,  prospects,  plans  and  objectives  of
management are forward-looking  statements.  When used in this report, the words
"will," "believe,"  "anticipate,"  "intend," "estimate," "expect," "project" and


                                       16
<PAGE>
similar  expressions  are  intended  to  identify  forward-looking   statements,
although not all forward-looking  statements contain such identifying words. All
forward-looking statements speak only as of the date of this report. The Company
does  not   undertake  any   obligation   to  update  or  revise   publicly  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.  Although the Company  believes that its plans,  intentions
and  expectations  reflected in or suggested by the  forward-looking  statements
that it makes in this report are  reasonable,  the Company can give no assurance
that such plans,  intentions or  expectations  will be achieved.  The cautionary
statements qualify all forward-looking statements attributable to the Company or
persons acting on its behalf.


Item 6.  Exhibits and Reports on Form 8-K.
------------------------------------------
         a.   Exhibits

              31.  CEO/CFO Certification  required  by  Rule 13a-14(a)/15d-14(a)
under the Securities Exchange Act of 1934.

              32.  Veritec Inc. Certification of CEO/CFO pursuant to Section 906
of the  Sarbanes-Oxley Act of 2002 (18 U.S.C. ss.1350).

         b.   Reports on Form 8-K.

              None.




                                   SIGNATURES

In accordance with the  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:    December 17, 2004        /s/ Van Thuy Tran
         -----------------        -------------------------------------------
                                  Van Thuy Tran
                                  Chief Executive Officer and
                                  Chief Financial Officer














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