----

| Nevada                                                                  | 95-3954373                                 |
|-------------------------------------------------------------------------|--------------------------------------------|
| (State      or Other Jurisdiction ofIncorporation      or Organization) | (IRS      EmployerIdentification      No.) |
|                                                                    |                                       |
| 2445 Winnetka Avenue N. Golden Valley,      MN                          | 55427                                      |
| (Address      of principal executive offices)                           | (Zip      Code)                            |

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|            |                          |                                                                                                         |      Page    No. |
|-----------------|-------------------------------|--------------------------------------------------------------------------------------------------------------|-------------------------------------------|
|  PART    I |                          |                                                                                                         |  3                                   |
|            |  ITEM      1   | FINANCIAL      STATEMENTS                                                                                    |  3                                   |
|            |   ITEM      2            |   MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS | 14                                        |
|            | ITEM      3              | QUANTITATIVE AND      QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                              | 17                                        |
|            | ITEM    4T                    | CONTROLS AND      PROCEDURES                                                                                 | 17                                        |
|            |                          |                                                                                                         |                                      |
| PART II         |                          |                                                                                                         | 19                                        |
|            |   ITEM      1            |   LEGAL      PROCEEDINGS                                                                                | 19                                        |
|            | ITEM    1A                    | RISK      FACTORS                                                                                            | 19                                        |
|            | ITEM      6         | EXHIBITS                                                                                                     | 19                                        |
|            |                          | SIGNATURES                                                                                                   | 19                                        |
|            |                          |                                                                                                         |                                      |
|            |                          |                                                                                                         |                                      |
|            |                          |                                                                                                         |                                      |

----

|                                                                                                                                             |   | December      31, |             | June      30, |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------------|---------------|
|                                                                                                                                             |   | 2009              |             | 2009          |
| ASSETS                                                                                                                                           |   |              | (Unaudited)      |          |   |   |   |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Current      Assets:                                                                                                                             |   |              |             |          |   |   |   |   |
| Cash                                                                                                                                             |   | $                 | 14,659           |          |   | $ | 50,019 |   |
| Accounts      receivable, net of allowance of $8,400                                                                                             |   |              | 31,840           |          |   |   | 28,376 |   |
| Notes      receivable                                                                                                                            |   |              | 10,000           |          |   |   | -- |   |
| Inventories                                                                                                                                      |   |              | 7,177            |          |   |   | 6,217 |   |
| Prepaid      expenses                                                                                                                            |   |              | 10,031           |          |   |   | 23,281 |   |
| Employee      advances                                                                                                                           |   |              | 6,236            |          |   |   | 8,500 |   |
| Total Current      Assets                                                                                                                        |   |              | 79,943           |          |   |   | 116,393 |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Property      and Equipment, net of accumulated depreciation of $165,115 and      $139,984                                                       |   |              | 68,161           |          |   |   | 93,292 |   |
| Patent      costs                                                                                                                                |   |              | 43,756           |          |   |   | 43,756 |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Total Assets                                                                                                                                     |   | $                 | 191,860          |          |   | $ | 253,441 |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ DEFICIT                                                                                                 |   |              |             |          |   |   |   |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Current      Liabilities:                                                                                                                        |   |              |             |          |   |   |   |   |
| Notes      payable                                                                                                                               |   | $                 | 1,735,085        |          |   | $ | 20,039 |   |
| Accounts      payable                                                                                                                            |   |              | 404,448          |          |   |   | 187,368 |   |
| Accrued      expenses                                                                                                                            |   |              | 260,735          |          |   |   | 353,161 |   |
| Total Current      Liabilities                                                                                                                   |   |              | 2,400,268        |          |   |   | 560,568 |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Notes      Payable, net of current portion                                                                                                       |   |              | --               |          |   |   | 885,673 |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Commitments      and Contingencies                                                                                                               |   |              |             |          |   |   |   |   |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Stockholders’      Deficit:                                                                                                                |   |              |             |          |   |   |   |   |
| 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            |          |   |   | 1,000 |   |
| Common      stock, par value $.01; authorized 20,000,000 shares, 15,860,088 and      16,165,088 shares issued                                    |   |              | 158,601          |          |   |   | 161,651 |   |
| Additional      paid-in capital                                                                                                                  |   |              | 14,256,792       |          |   |   | 13,943,046 |   |
| Accumulated      deficit                                                                                                                         |   |              | (16,624,801      | )             |   |   | (15,298,497 | ) |
| Total Stockholders’      Deficit                                                                                                           |   |              | (      2,208,408 | )             |   |   | (      1,192,800 | ) |
|                                                                                                                                             |   |              |             |          |   |   |   |   |
| Total Liabilities and      Stockholders’ Deficit                                                                                           |   | $                 | 191,860          |          |   | $ | 253,441 |   |

----

|                                                                                                     |   | Three      months ended December 31, |
|----------------------------------------------------------------------------------------------------------|--------|--------------------------------------|
|                                                                                                     |   | 2009                                 |   | 2008 |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| License      and other revenue                                                                           |   | $                                    | 119,017 |   |   | $ | 268,327 |   |
| Cost      of Sales                                                                                       |   |                                 | 129,426 |   |   |   | 64,351 |   |
| Gross      Profit                                                                                        |   |                                 | (10,409 | ) |   |   | 203,976 |   |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| Operating      Expenses:                                                                                 |   |                                 |   |   |   |   |   |   |
| Selling, general and      administrative                                                                 |   |                                 | 418,535 |   |   |   | 255,058 |   |
| Research and      development                                                                            |   |                                 | 151,976 |   |   |   | 135,277 |   |
| Total Operating      Expenses                                                                            |   |                                 | 570,511 |   |   |   | 390,335 |   |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| Loss      from Operations                                                                                |   |                                 | (580,920 | ) |   |   | (186,359 | ) |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| Other      Income(Expense):                                                                              |   |                                 |   |   |   |   |   |   |
|        Interest      income                                           |   |                                 | -- |   |   |   | 891 |   |
|        Interest      expense                                          |   |                                 | (34,923 | ) |   |   | -- |   |
|             Total      Other Income(Expense) |   |                                 | (34,923 | ) |   |   | 891 |   |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| Net      Loss                                                                                            |   | $                                    | (615,843 | ) |   | $ | (185,468 | ) |
|                                                                                                     |   |                                 |   |   |   |   |   |   |
| Loss      Per Common Share,                                                                              |   |                                 |   |   |   |   |   |   |
| Basic      and Diluted                                                                                   |   | $                                    | (0.04 | ) |   | $ | (0.01 | ) |

| Weighted      Average Number of Shares Outstanding, |   |   |       |   |   |   |       |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|
|     Basic      and Diluted      |   |   | 16,208,131 |   |   |   | 15,115,088 |   |

----

|                                                                                                     |   | Six      months ended December 31, |
|----------------------------------------------------------------------------------------------------------|--------|------------------------------------|
|                                                                                                     |   | 2009                               |   | 2008 |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| License      and other revenue                                                                           |   | $                                  | 319,658 |   |   | $ | 700,859 |   |
| Cost      of Sales                                                                                       |   |                               | 288,884 |   |   |   | 127,946 |   |
| Gross      Profit                                                                                        |   |                               | 30,774 |   |   |   | 572,913 |   |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| Operating      Expenses:                                                                                 |   |                               |   |   |   |   |   |   |
| Selling, general and      administrative                                                                 |   |                               | 954,947 |   |   |   | 576,434 |   |
| Research and      development                                                                            |   |                               | 339,981 |   |   |   | 234,372 |   |
| Total Operating      Expenses                                                                            |   |                               | 1,294,928 |   |   |   | 810,806 |   |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| Loss      from Operations                                                                                |   |                               | (1,264,154 | ) |   |   | (237,893 | ) |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| Other      Income(Expense):                                                                              |   |                               |   |   |   |   |   |   |
|        Interest      income                                           |   |                               | 30 |   |   |   | 1,952 |   |
|        Interest      expense                                          |   |                               | (62,179 | ) |   |   | -- |   |
|             Total      Other Income(Expense) |   |                               | (62,149 | ) |   |   | 1,952 |   |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| Net      Loss                                                                                            |   | $                                  | (1,326,303 | ) |   | $ | (235,941 | ) |
|                                                                                                     |   |                               |   |   |   |   |   |   |
| Loss      Per Common Share,                                                                              |   |                               |   |   |   |   |   |   |
| Basic      and Diluted                                                                                   |   | $                                  | (0.08 | ) |   | $ | (0.02 | ) |

| Weighted      Average Number of Shares Outstanding, |   |   |       |   |   |   |       |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|
|     Basic      and Diluted      |   |   | 16,245,305 |   |   |   | 15,115,088 |   |

----

|                             |                                                                                        |   |                                                                                        |   |                                                                                                                |   |                                                                                        |   |                                                                                                          |   |                                      |   |                                                                                                                                  |
|----------------------------------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                        |   |                                                                                        |   |                                                                                                                |   |                                                                                        |   | Additional                                                                                                    |   |                                      |   |                                                                                                                                  |
|                             | Preferred      Stock                                                                        |   | Common                                                                                      |   |  Stock                                                                                                         |   | Paid-in                                                                                     |   | Accumulated                                                                                                   |   |                                      |
|                             | Shares                                                                                      |   | Amount                                                                                      |   | Shares                                                                                                              |   | Amount                                                                                      |   | Capital                                                                                                       |   | Deficit                                   |   | Total                                                                                                                                 |
| Balance,      July 1, 2009       |          1,000                                 |   |  $      1,000                                            |   |     16,165,088                                                                                  |   |  $  161,651                                                                  |   |  $      13,943,046                                                                                       |   |  $(15,298,497)                       |   |  $    (1,192,800)                                                                                            |
| Stock      Based Compensation    |                                                                                        |   |                                                                                        |   |                                                                                                                |   |                                                                                        |   |            65,446                                      |   |                                      |   |               65,446                                            |
| Shares      Issued for Services  |                                                                                        |   |                                                                                        |   |          175,000                                                       |   |          1,750                                 |   |          173,500                                                 |   |                                      |   |             175,250                                                       |
| Conversion      of Notes Payable |                                                                                        |   |                                                                                        |   |            70,000                                            |   |             700                 |   |            69,300                                      |   |                                      |   |               70,000                                            |
| Shares      Returned             |                                                                                        |   |                                                                                        |   |         (550,000)                                                           |   |         (5,500)                                     |   |              5,500                           |   |                                      |   |                       - |
| Net      Loss for the Period     |                - |   |                - |   |                    - |   |                - |   |                   - |   |      (1,326,303) |   |        (1,326,303)                                                                                 |
| Balance,      December 31, 2009  |          1,000                                 |   |  $      1,000                                            |   |     15,860,088                                                                                  |   |  $  158,601                                                                  |   |  $      14,256,792                                                                                       |   |  $(16,624,800)                       |   |  $    (2,208,407)                                                                                            |
|                             |                                                                                        |   |                                                                                        |   |                                                                                                                |   |                                                                                        |   |                                                                                                          |   |                                      |   |                                                                                                                                  |

----

|                                                                                  |   | Six      months ended December 31, |
|---------------------------------------------------------------------------------------|--------|------------------------------------|
|                                                                                  |   | 2009                               |   | 2008 |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                             |   |                               |   |   |   |   |   |   |
| Net      loss                                                                         |   | $                                  | (1,326,303 | ) |   | $ | (235,941 | ) |
| Adjustments      to reconcile net loss to net cash used by operating      activities: |   |                               |   |   |   |   |   |   |
| Depreciation                                                                          |   |                               | 25,131 |   |   |   | 19,469 |   |
| Amortization      of debt issuance cost                                               |   |                               | 4,090 |   |   |   | -- |   |
| Amortization      of discount on notes payable                                        |   |                               | 6,633 |   |   |   | -- |   |
| Fair      value of stock options issued to employees                                  |   |                               | 65,445 |   |   |   | 16,117 |   |
| Fair      value of stock issued for services                                          |   |                               | 137,750 |   |   |   | 22,717 |   |
| Interest      accrued on notes payable                                                |   |                               | 55,190 |   |   |   | -- |   |
| Changes      in operating assets and liabilities:                                     |   |                               |   |   |   |   |   |   |
| Accountsreceivable                                                                    |   |                               | (3,464 | ) |   |   | 10,775 |   |
| Inventories                                                                           |   |                               | (960 | ) |   |   | 14,384 |   |
| Employee advances                                                                     |   |                               | 2,264 |   |   |   | -- |   |
| Prepaid expenses                                                                      |   |                               | 13,250 |   |   |   | (45,000 | ) |
| Accounts payables and accrued      expenses                                           |   |                               | 162,154 |   |   |   | 44,332 |   |
|                                                                                  |   |                               |   |   |   |   |   |   |
| Net      cash used by operating activities                                            |   |                               | (858,820 | ) |   |   | (153,147 | ) |
|                                                                                  |   |                               |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                             |   |                               |   |   |   |   |   |   |
|   Purchase      of property and equipment                                   |   |                               | -- |   |   |   | (9,017 | ) |
|   Issuance      of note receivable                                          |   |                               | (10,000) |   |   |   | -- |   |
| Net      cash used by investing activities                                            |   |                               | (10,000) |   |   |   | (9,017) |   |
|                                                                                  |   |                               |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                             |   |                               |   |   |   |   |   |   |
|     Proceeds      from notes payable                              |   |                               | 898,460 |   |   |   | -- |   |
|  Payments      on notes payable                                                  |   |                               | (65,000) |   |   |   | -- |   |
| Net      cash provided by financing activities                                        |   |                               | 833,460 |   |   |   | -- |   |
|                                                                                  |   |                               |   |   |   |   |   |   |
| NET      DECREASE IN CASH                                                             |   |                               | (35,360) |   |   |   | (162,164 | ) |
| CASH      AT BEGINNING OF PERIOD                                                      |   |                               | 50,019 |   |   |   | 334,702 |   |
| CASH      AT END OF PERIOD                                                            |   | $                                  | 14,659 |   |   | $ | 172,538 |   |
|                                                                                  |   |                               |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURE OF CASH FLOW INFORMATION                                 |   |                               |   |   |   |   |   |   |
| Cash      paid for interest                                                           |   | $                                  | 355 |   |   | $ | -- |   |
|                                                                                  |   |                               |   |   |   |   |   |   |
| NONCASH      ACTIVITIES                                                               |   |                               |   |   |   |   |   |   |
| Issuance      of common stock for accrued expenses                                    |   | $                                  | 37,500 |   |   | $ | -- |   |
| Issuance      of common stock in repayment of note payable                            |   |                               | 70,000 |   |   |   | -- |   |
|                                                                                  |   |                               |   |   |   |   |   |   |

----

----

| D.   | SIGNIFICANT      ACCOUNTING POLICIES |
|----------------|--------------------------------------|

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | December      31, 2009                                                                                                      |   | June      30, 2009                                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (UNAUDITED)                                                                                                                 |   |                                                                                                           |
| Convertible      notes payable (includes $472,663 and $449,120, respectively, to related      parties), unsecured, interest at 8%, due September 2010 through      November 2010, net of unamortized discount of $10,474 and $17,108,      respectively, using effective interest rates ranging from 2% to 3%. The      principal and accrued interest are convertible at a conversion price of      $0.30. The principal and interest is due immediately on the event of      default or change of control. The holders also received warrants to      purchase one share of common stock for every $2 of investment. The Company      recorded a $20,981 discount on the notes payable for the value of the      warrants issued. The discount is being amortized over the term of the      notes payable |  $   575,335                                                                                            |   |  $  546,564                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Convertible      notes payable to related parties, unsecured, principal and interest are      convertible into common stock at $0.30 to $0.33 per share, interest at 8 %      to 10%, due July to November 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        444,930                                                                           |   |      339,109                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Convertible      note payable to related party, secured by the Company’s intellectual      property, principal and interest are convertible into common stock at      $0.25 per share subject to board of directors’ approval, interest at 8%      due November 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |        197,860                                                                           |   |                  --       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Note      payable to related party, secured by the Company’s intellectual property,      interest at 8% due August 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |        388,864                                                                           |   |                  --       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Notes      payable to related parties, unsecured, interest at 0% to 8%, due on      demand                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |           106,403                                                         |   |                   -- |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Note      payable, unsecured, interest at 10%, due January 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |           20,170                                                          |   |                   -- |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Convertible      note payable, unsecured, principal and interest are convertible into      common stock at $1.00 per share subject to board of directors’ approval,      interest at 8% due November 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |           1,523                                                           |   |         20,039                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        1,735,085                                                                         |   |        905,712                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Less:      Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |        1,735,085                                                                         |   |          20,039                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                        |   |                                                                                                           |
| Notes      Payable, less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  $                   -- |   |  $    885,673                                                                         |

----

|   | Stock      options |
|--------|--------------------|

The Company has agreements with certain of its employees andindependent contractor consultants that provide grants of options to purchasethe Company’s common stock.

|                                  | Number      of |   | Weighted      - Average |
|---------------------------------------|----------------|--------|-------------------------|
|                                  | Shares         |   | Exercise      Price     |
|                                  |           |   |                    |   |   |
| Outstanding      at June 30, 2009     | 721,749        |   |                    | $0.49 |   |
| Granted                               | 97,500         |   |                    | $0.38 |   |
| Outstanding      at December 31, 2009 | 819,249        |   |                    | $0.48 |   |

----

----

----

----

| ITEM      1A | RISK      FACTORS |
|--------------|-------------------|

----

| ITEM      6 | EXHIBITS |
|-------------|----------|

| 31.1 | CEO      Certification required by Rule 13a14(a)/15d14(a) under the Securities      Exchange Act of 1934. |
|------|-----------------------------------------------------------------------------------------------------------|

| 31.2 | CFO      Certification required by Rule 13a14(a)/15d14(a) under the Securities      Exchange Act of 1934. |
|------|-----------------------------------------------------------------------------------------------------------|

| 32.1 | Veritec,      Inc. Certification of CEO/Executive Chair 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). |
|------|--------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | SIGNATURES |
|--------|------------|

----