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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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                                   FORM 10-QSB

(Mark One)

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

          For the quarterly period ended        September 30, 1999
                                         ------------------------------
     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)

                    1430 ORKLA DRIVE, GOLDEN VALLEY, MN 55427
               --------------------------------------------------
               (Address of principal executive offices, zip code)

                                 (612) 545-0224
               --------------------------------------------------
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports);  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___

     APPLICABLE  ONLY TO  CORPORATE  ISSUERS:  Indicate  the  number  of  shares
outstanding  of each of the  issuer's  classes of common  stock as of the latest
practicable  date.  As of October 31, 1999 the Company had  4,378,925  shares of
common stock.


         This document consists of 16 pages, including 4 Exhibit pages..
                        The Exhibit index is on page 12.


                                       1
<PAGE>

PART 1:  FINANCIAL INFORMATION
ITEM 1:  Financial Statements
                                  VERITEC INC.
                                 BALANCE SHEET
                                  (Unaudited)
                                                 September 30,         June 30,
                                                      1999              1999
                                                 -------------        ---------
ASSETS:
Current Assets:
 Cash                                                 13,243            3,664
 Accounts receivable                                       -           23,000
 Inventory                                            26,279           11,463
                                                      ------           ------
   Total current assets                               39,522           41,127

Furniture and equipment (net)                          5,971            7,246
                                                       -----            -----
                                                      45,493           48,373
                                                      ======           ======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liaibilities:
 Notes payable                                        45,000           45,000
 Notes payable- secured                              198,704          198,704
 Administrative costs - per chapter                   20,802           42,737
 Accounts payable & accrued liab.                     89,367          134,764
 Deferred compensation                               323,592          301,406
 Accrued interest                                     74,347           60,262
 Commissions payable                                   2,500            2,500
                                                       -----            -----
   Total current liabilities                         754,312          785,373

Secured notes payable-long term                       87,749           87,749
                                                      ------           ------
                                                     842,061          873,122
                                                     -------          -------
Prepayment on note receivable                         82,354             -
Prepayment on stock                                  195,117          240,198

Shareholders' equity (deficiency)
 Subscription receivable                          -1,284,750             -
 Preferred stock, par value $1.00, authorized
  10,000,000 shares, 276,000 shares of Series H
  Peferred authorized, issued and outstanding      1,322,632            7,273
 Common stock, par value $.01, authorized 20,000,000
   shares, issued and outstanding 3,598,791           35,988           35,988
 Additional paid in capital                        9,644,401        9,644,401
 Accumulated deficit                             -10,792,310      -10,752,609
                                                 -----------      -----------
  Net shareholders' equity                        -1,074,039       -1,064,947
                                                  ----------       ----------
                                                      45,493           48,373
                                                      ======           ======

               See Accompanying Notes to the Financial Statements


                                       2
<PAGE>

                                  VERITEC INC.
                            STATEMENT OF OPERATIONS
                                  (Unaudited)

                                                  For the three months ended
                                                           September 30,

                                                   1999                   1998
                                                   ----                   ----
Revenues                                         45,852                 42,401
Cost of sales                                     3,583                 18,485
                                                  -----                 ------
          Gross profit                           42,269                 23,916

Commissions                                      13,785                  5,000
                                                 ------                  -----
           Gross profit after commissions        28,484                 18,916
                                                 ------                 ------

Expenses:
     General and administrative                  50,975                 89,791
     Sales and marketing                          3,792                 13,434
     Engineering, research and development       42,797                 49,456
                                                 ------                 ------
                                                 97,564                152,681
                                                 ------                -------
          Gain (loss) from operations           -69,080               -133,765

Interest income - (Note)                         43,465                   -
Interest expense                                -14,085                 -5,982
                                                -------                 ------
          Net interest income (expense)          29,380                 -5,982

          Net loss                               39,700               -139,747
                                                 ======               ========

Net loss per common share                         -0.01                  -0.04
                                                  =====                  =====
Weighted average common shares outstanding    3,598,791              3,308,791
                                              =========              =========



Note -   Imputed interest on a related party transaction












               See Accompanying Notes to the Financial Statements

                                       3
<PAGE>

                                  VERITEC INC.
                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                        For the three months ended September 30,

                                                          1999           1998
                                                          ----           ----
Cash flow from operating activities:
Net loss                                               -39,700       -139,747
Adjustments to reconcile net loss to net cash
      from operating activities:
Depreciation and amortization                            1,275          1,587
(Increase) decrease in assets:
     Inventory                                         -11,816          9,615
     Accounts receivable                                23,000            -
Increase (decrease) in liabilities:
     Accounts payable and accrued expenses             -67,333        -31,040
     Deferred compensation                              22,186         61,620
     Deferred revenue                                    -             -8,500
     Accrued interest                                   14,085            -
                                                        ------       --------

         Net cash used by operating activities         -58,303       -106,465
                                                       -------       --------
Cash flow from investing activities:
     Purchase of equipment                               -                -
         Net cash used for investing activities          -                -
                                                       -------        -------
Cash flow from financing activities:
     Subscriptions receivable                       -1,284,750            -
     Issuance of notes payable                           -             20,000
     Issuance of preferred stock from advances           -            218,182
     Prepayment on notes receivable                     82,354            -
     Prepayment on stock                               -45,081       -135,377
     Issuance of Series H preferred stock            1,315,359            -
                                                     ---------       --------
         Net cash provided by financing activities      67,882        102,805
                                                        ------        -------
         Increase (decrease) in cash position            9,579         -3,660

Cash at beginning of period                              3,664          4,216
                                                         -----          -----
Cash at end of period                                   13,243            556
                                                        ======            ===












               See Accompanying Notes to the Financial Statements

                                       4
<PAGE>

                                  VERITEC INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                               September 30, 1999
                                   (unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations
---------------------------
     Veritec Inc. (the Company) was incorporated in Nevada on September 7, 1982,
The Company is primarily engaged in development, marketing and sale of a line of
microprocessors-based  encoding and decoding  system  products  that utilize its
patented VERICODE(R) Symbol technology.  The Company's  VeriSystem(TM) enables a
manufacturer  or  distributor  to  use  unique   identifiers  or  coded  symbols
containing binary encoded data with a product.  The VeriSystem enables automatic
identification  and collection of a greater amount of data than conventional bar
codes.  In addition to the Vericode symbol  technology and  VeriSystem,  Veritec
also  designs  and   integrates   identification   systems  that  utilize  other
two-dimensional  and single  dimension  symbols.  Veritec's  experience  both in
marking and image processing has provided the knowledge and expertise  necessary
for the successful  implementation of simple to complex automatic identification
projects and installations.

Chapter 11 Bankruptcy
---------------------
     At September  30, 1999 Veritec Inc. was a debtor in a Chapter 11 bankruptcy
case. See Subsequent  Events for information on the  Registrants  emergence from
bankruptcy with a Final Decree signed by the Court on October 21, 1999.

 On October 16, 1995,  Thomas R. O'Malley,  The Amy Howard Trust,  and the Kandy
Limited Partnership commenced a bankruptcy case by filing an involuntary Chapter
7 petition.  That Chapter 7 petition was subsequently  converted to a Chapter 11
petition under the United States  Bankruptcy Code ("Code") , 11 U. S. C. section
101 et seq. The Registrants Reorganization Plan was approved as indicated in the
"FINDINGS OF FACT;  CONCLUSIONS OF LAW AND ORDER  CONFIRMING THE DEBTOR'S SECOND
REVISED THIRD AMENDED CHAPTER 11 PLAN OF REORGANIZATION", included as an Exhibit
in the  Company's  10-KSB for the period June 30, 1997 and included by reference
in this report.

     The Reorganization Plan was confirmed on April 23, 1997 with the Bankruptcy
Judge signing the order on May 2, 1997. The Plan was expected to be effective by
August  6,  1997.  Due to a  variety  of  difficulties  in  arranging  the asset
investment of $2,000,000,  and financing ongoing operations of the Company,  the
Plan was not been fully affected at September 30, 1999.

     See Note 4 - Management Discussion , for comments on the Bankruptcy and the
financing  being  provided by the Matthews  Group after the failure by HOMETREND
and its Affiliated  Companies in being able to effect the Plan of Reorganization
in a timely manner.

     The Reorganization Plan includes the following major items:

     1.  Transfer of a majority of the Registrants debt to equity, approximately
         $4,500,000.
     2.  Investment  of  $2,000,000  in  assets  or asset  equivalents  into the
         Registrant  in exchange for 275,000  shares of a new Series H Preferred
         Shares class of stock.

                                       5
<PAGE>

     3.  Changes in Directors  and  Management.
     4.  A one for ten  reverse  stock  split  for  both  common  and  preferred
         shareholders.  All preferred stock and formerly restricted common stock
         changed to free trading common stock. This reverse split action reduced
         the old common stock of 2,085,660  and old  preferred  stock of 441,840
         shares to a combined  252,749  free  trading  shares.
     5.  Issuance  of  300,000  shares of common  stock as  guaranty  to certain
         noteholders  that  are to be paid  in cash  and  notes.  HOMETREND,  as
         guarantor of these Notes, is to receive these shares upon  satisfaction
         of  the  payment  of  $60,000  as  an  initial   payment  per  Plan  of
         Reorganization..

Items of Reorganization Plan Accomplished
-----------------------------------------
     All of the  provisions  of the Plan of  Reorganization  were  completed  by
September  30, 1999 and the  Registrant  had filed a motion with the  Bankruptcy
Court for a Final  Decree.  A copy of the Court  Order on the final  Decree  was
attached as an Exhibit to the Registrant's  10-KSB filed at June 30, 1999 and is
made a part of this filing by reference.

Basis of Presentation
---------------------
     The unaudited financial  statements  presented herein have been prepared by
the Company,  without audit,  pursuant to the rules and  regulations for interim
financial  information  and the  instructions to Form 10-QSB and Regulation S-B.
Accordingly,  certain information and footnote  disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principals have been omitted.  These unaudited consolidated financial statements
should be read in  conjunction  with the financial  statements and notes thereto
included in the  Company's  Report on Form 10-KSB for the fiscal year ended June
30, 1999. In the opinion of  management,  the unaudited  consolidated  financial
statements  reflect all  adjustments  (consisting of normal  recurring  accruals
only) which are necessary to present fairly the consolidated financial position,
results  of  operations,  and  changes  in cash flow of the  company.  Operating
results for interim  periods are not  necessarily  indicative of the results for
interim  periods are not  necessarily  indicative  of the  results  which may be
expected for the entire year.

Per Share Computations
----------------------
     Loss per  share is based  upon the  weighted  average  number  of shares of
common stock outstanding during the respective periods.

NOTE 2 - PROPERTY AND EQUIPMENT

   Property and equipment on September 30, 1999 is comprised of the following:

        Equipment                                                $    52,321
        Furniture and fixtures                                        50,157
                                                                    --------
                                                                     102,478
        Less accumulated depreciation and amortization                96,507
                                                                    --------
                                                                     $ 5,971
                                                                    ========
NOTE  3 - COMMITMENTS AND CONTINGENCIES


                                       6
<PAGE>

Contingencies
-------------
     All major  contingencies of the Company were included in the Confirmed Plan
or as a part of motions  granted for debt to equity  exchanges in the  Company's
motion for a Final Decree.  The Company is not aware of any contingencies  other
than those  discussed as Possible  Unasserted  Claims in PART II, ITEM I of this
report.

Pending Litigation
------------------
     As stated in Note 1, the  Company is  currently  in Chapter 11  Bankruptcy,
therefore,  all pending  litigation  or threats of  litigation up to the date of
Confirmation of the Plan were addressed in conjunction  with regular  bankruptcy
proceedings.  There is no litigation filed against the Registrant at the time of
this filing.


Notes payable to a group of secured creditors - "The Gant Group"
----------------------------------------------------------------
     Included in the Plan of  Reorganization  was a secured note payable to "The
Gant  Group" in the amount of  $364,513.  A payment of $60,000 was paid per note
Agreement on the scheduled  effective date of the Plan and the balance was to be
paid in quarterly  payments of $23,325.38 per quarter over a 4-year period.  The
Gant Group was  granted a lien on the  patents of the  company  and ten  percent
interest on the note. The first quarterly  payment was made and then due to lack
of funds,  additional  payments  became  delinquent.  This problem with the Gant
Group  resulted in the  Registrant  being placed back into Chapter 7 bankruptcy.
The Matthews Group paid  $182,345.87 on September 1, 1999 to bring the note with
the Gant Group current and has pledged to pay the quarterly payments to the Gant
Group as they become due. The Registrant owes the Matthews Group for the amounts
paid to the Gant Group and will owe additional  amounts to the Matthews Group as
they continue to pay on the quarterly payments. The amounts owed to the Matthews
Group are accruing  interest at 10%, the same as the interest  being paid to the
Gant Group.

     As stated in Note 2, the Company was in Chapter 11  Bankruptcy at September
1, 1999. The Plan of  Reorganization  was to be Effective on August 8, 1997. Due
to the  inability  of  HOMETREND  and  its  Affiliates  to  provide  the  assets
guaranteed in the Plan, the company was put in a difficult  financial  position.
Administrative,  Engineering  and Sales  personnel  were hired by the Company in
anticipation of the funding being in place.  Operating activities were increased
to position the Company for increased  sales.  Due to this lack of funding,  the
engineering  and sales  personnel left employment in the Company and the Company
had little operating activity for over a year.

     In September and October 1999, the  Registrant  filed all 10-KSB and 10-QSB
reports  that  were due with the SEC and  became  current  in all  filings.  The
Registrant  also filed all Federal and State Income Tax returns through June 30,
1999.


NOTE 4 - GOING CONCERN AND MANAGEMENTS PLANS

     At September  30,  1999,  the  Matthews  Group had  committed to invest the
$2,000,000 in assets required in the Plan of Reorganization, pay the amounts due
the Gant Group on their secured note, and finance the operations of the Company.
As proposed in the Plan, the Matthews Group received  275,000 shares of Series H

                                       7
<PAGE>

convertible  preferred  stock in exchange for a promissory note in the amount of
$2,000,000.  This promissory  note is a non-interest  bearing note and calls for
monthly payments to the Company of $18,518.52 over a 9 year period. The Matthews
Group has been funding the Company  operations for more than the amount required
by the note and at  September  30,  1999 had  funded an  additional  $82,354  to
support company operations.

     The present  value of the  Promissory  Note,  using a ten  percent  imputed
interest factor, at the time of issuance was as follows:

   Future Dollar Amount      Less Imputed Interest      Present Value
   --------------------      ---------------------      -------------
       $2,000,000                  $684,641               $1,315,359

     There was  approximately  $750,000 in post  confirmation  debt and invested
amounts  at  September  30,  1999.  In the  Company's  motion  with the Court on
September 1, 1999, the Court granted the Company's request to allow the exchange
of debt for the  Company's  restricted  common  stock  at 80 cents a share.  The
majority of  creditors  have agreed to this  exchange of debt for equity.  After
this stock  transaction,  it will leave the Company with little debt, except for
the amounts due the Matthews Group and Gant Group on the secured note payable.

     With  the  infusion  of funds  from  the  Matthew's  Group,  Management  is
confident  that it can move the Company  forward  with an  aggressive  sales and
marketing  program.  There is no  assurance  that such  activity  will result in
future  profits to the  company as the  Company  is still  emerging  from a very
difficult period of operational inactivity.

NOTE 5 - SUBSEQUENT EVENTS

     As stated in Note 1, the  Registrant  was granted a Final Decree on October
21,  1999.  A copy of the Court order is  attached as Exhibit 1 to this  report.
Also, the Registrant  was granted the right to exchange Post  Confirmation  debt
for restricted common stock at eighty cents (80) per share. At October 31, 1999.
$623,305 of debt was  exchanged for 779,134  shares of restricted  common stock.
117,647  shares of  restricted  common  stock has been  reserved  for payment of
$94,117 due either  HOMETREND or Health  Kinetics upon the  determination  as to
which  party  is owed the  stock.  It is  expected  that  approximately  100,000
additional shares will be issued in payment of other debt amounts.

     On October 12, 1999, the Registrant  purchased  certain  software from Mark
Pinson.  This software was  developed by Mr.  Pinson  during  periods he was not
either an employee of nor a contractor/consultant of the Registrant and includes
a source code,  documentation,  manuals and other written material, which relate
to the code. A copy of the Assignment and Agreement are attached as Exhibit 2 to
this report. Mr. Pinson received a cash payment of $50,000 and 187,500 shares of
restricted common stock in exchange for this software.


PART I.  FINANCIAL INFORMATION
ITEM 2.  Management' Discussion and Analysis

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


                                       8
<PAGE>

Liquidity and Capital Resources -September 30, 1999,  compared to June 30, 1999.
-------------------------------
     During the quarter ended September 30, 1999, the Company received cash from
revenues  totaling  $45,852,  collection  of  accounts  receivable  of  $23,000,
$55,555.56  as payment on the note  receivable  and  $10,895.52 as an advance on
notes  payable from the Matthews  Group.  Cash on hand at September 30, 1999 was
$13,243.

         Debt owed by the Company at September 30, 1999 was as follows:

   Debt category                    Sept. 30, 1999 June 30, 1999  Incr./(Decr.)
                                   --------------- -------------  -------------
Notes payable                          $   45,000  $     45,000    $         -
Notes payable, secured                    286,453       286,453              -
Administrative costs per Plan              20,802        42,737        (21,935)
Accounts  payable  and accrued expenses    89,367       134,764        (45,397)
Accrued interest                           74,347        60,262         14,085
Commissions payable                         2,500         2,500              -
Deferred compensation                     323,592       301,406         22,186
                                        =========      ========      =========
                                      $   842,061    $  873,122  $     (31,061)
                                        =========      ========      =========

     During the  quarter  ending  September  30,  1999 the  Company's  liquidity
improved  due  to  a  reduction  in  administrative  costs and accounts payable.
Company's liquidity (working capital) is  reflected  in the table  below,  which
shows comparative working capital as of September 30, 1999 and June 30, 1999.

                                    Sept. 30, 1999             June 30, 1999
                                    --------------             -------------
Working capital (deficit)           $    (714,790)            $    (744,246)

     The Company does not expect revenues from operations to be adequate to meet
all costs and expenses of the Company for several months. The Company first must
stabilize its  operations and then move  aggressively  in sales and marketing of
its  products and  services.  The Company is  developing a web site,  contacting
prospective  customers,  and continuing to service current customers in order to
increase  revenues.  The Company had revenues of $82,997 in the month of October
1999 from  sales to a foreign  customer.  International  sales are  expected  to
continue  with this and other  current  customers.  There is no  assurance  that
future sales to these or other  customers will occur or that the Company will be
able to obtain adequate revenues to meet costs and expenses of operations.

Financial and Operational Outlook
---------------------------------
     Although  there is no assurance that the Company will generate any material
revenues  or cash flows from  operations  in the next  fiscal  year,  management
believes  the  Company has  prospects  for  generating  such  revenues.  Several
developments occurred during the year, which the Company believes have increased
that  potential.  The  royalty  from  Mitsubishi  for  sales in Korea  and other
countries  is  expected  to bring a  gradually  increasing  stream of  revenues,
however, the amounts are expected to be less than $20,000 per quarter during the
next few  quarters  of  agreement.  Sales to  companies  in Korea have  provided
revenues  in the nine  months  ended  September  30,  1999  and  there is a good
possibility of additional sales to these companies.

                                       9
<PAGE>
     Results of  Operations - The quarter  ended  September 30, 1999 compared to
the quarter ended September 30, 1998.

     The Company had revenues of $45,852 during the quarter ended  September 30,
1999, as compared to $42,401  during the quarter ended  September 30, 1998.  The
revenues in the 1999 period were from the sale of products, engineering services
and a royalty payment of $10,067 from Mitsubishi  Corporation.  The revenues for
the 1998  period was  primarily  from the sale of  products.  The  Company is in
discussions  with  several  potential  customers  for  systems  sales but cannot
project  future  revenues,  if any,  at this  time.  The  Company is also in the
discussion  stage of potential  licensing or partnering  for product or industry
segment  opportunities  with  several  companies.  Because  of its cash flow and
liquidity  problems,  there are no assurances that the Company can ever generate
revenues.

     Operating  expenses  decreased in the September 1999 quarter as compared to
the September 1998 quarter due to a reduction in operating  activity  associated
with the lack of funding.

                                   For the nine months ended
     Expense category            Sept. 30, 1999  Sept. 30, 1998   Incr./(Decr.)
                                 --------------  --------------   -------------

General and administrative          $    50,975     $    89,791   $   (38,816)
Sales and marketing                       3,792          13,434        (9,642)
Engineering, research and development    42,797          49,456        (6,659)
                                    ------------     -----------   -----------
                                     $   97,564     $   152,681   $   (55,117)
                                    ============     ===========   ===========

     The decrease in General and  Administrative  expenses was due to a decrease
in administrative  payroll and a payment of $20,000 to the Company's  bankruptcy
attorney  recorded in the  September  1998  quarter.  Other costs  and  expenses
remained about the same as those in the prior year first quarter.

     The decrease in Sales and Marketing  expense was due to the  resignation of
all  sales  personnel  due to  the  Company  having  insufficient  funds  to pay
salaries.

     The decrease in Engineering and research was due to a decrease in operating
and R & D supplies and expenses.

Capital Expenditures and Commitments
------------------------------------
     There were no Capital  expenditures  during the quarter ended September 30,
1999.  Other than for nominal computer and office equipment needed to expand its
businesses,  the  Company  has  no  current  commitments  for  material  capital
expenditures in the next 12 months. The Company believes its need for additional
capital will  continue  because of the need to develop and expand its  business.
The amount of such  additional  capital  required is uncertain and may be beyond
that generated from operations.

Factors that may effect future results
--------------------------------------
     The note receivable  requires payment of $18,518.52 per month.  This amount
is adequate to take care of the cost of engineering services, rent and supplies.
The  Matthews  Group has supplied  finances in addition to the required  monthly
amount on the note and has financed  operations  necessary to promote  sales and
provide  inventory  for sales.  In order for the  Company to have an  aggressive

                                       10
<PAGE>

sales and  marketing  program,  it will  require  funds in excess of the monthly
amount of $18,518.52 until such time  as the Company's  profit from revenues and
the  $18,518.52 is  adequate to cover costs and  expenses of the  Company.   The
Matthews Group has been willing to provide funding necessary to move the Company
forward  in  engineering,   sales  and  marketing  activities.  Larry  Matthews,
Chairman, and Ms. Van Tran, President,  are principles in the Matthews Group and
are an integral part of managing the operations of the Company.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Possible unasserted claims
--------------------------
     During its bankruptcy the Registrant  sought an investment  group to assist
it in  funding  the  $2,000,000  called  for  under  the Plan of  Reorganization
approved by the Bankruptcy  Court on May 2, 1997. In the  intervening  years the
various  investment groups have attempted to help the company fund this required
investment.  Until the Matthews Group provided the financing, no other group had
been successful in assisting the Registrant in funding this commitment.  Partial
fundings  received from these investment  groups have been settled through stock
issuances by the Company or are recorded as stock  advances that the  Registrant
intends to settle  through  the  issuance of stock.  It is  possible  that these
investment  groups will assert  claims  against the  Registrant  regarding:  the
levels  of  their  funding;  the  Registrant's   termination  of  their  funding
commitments;  or for expenses incurred while they were assisting the Registrant.
Management  feels  it  has  appropriately  reflected  the  activity  with  these
investment   groups   in  the   accompanying   financial   statements.   Due  to
uncertainties,  however,  it is at least reasonable possible that claims will be
asserted.  The ultimate outcome of these claims,  if asserted,  cannot presently
be determined.

SEC reporting obligations
-------------------------
     The  Company is  subject to the  continuing  reporting  obligations  of the
Securities  Exchange Act of 1934 (the "1934 Act"),  which,  among other  things,
requires the filing of annual and quarterly reports and proxy materials with the
Securities  and Exchange  Commission  ("the SEC").  To the Company's  knowledge,
there is no current inquiry or investigation pending or threatened by the SEC in
regards to reports filed by the Company. However, there can be no assurance that
the Company will not be subject to such inquiry or  investigation in the future.
As a result of any potential or pending  inquiry by the SEC or other  regulatory
agency,  the Company may be subject to penalties,  including among other things,
suspension of trading in the Company's securities, court actions, administrative
proceedings,  preclusion  from using certain  registration  forms under the 1994
Act, injunctive relief to prevent future violations and/or criminal prosecution.

ITEM 2.  CHANGES IN SECURITIES.

     None during the quarter  ended  September  30, 1999.  In October 1999 there
were 779,134 shares of restricted  common stock issued in  satisfaction  of Post
Confirmation debt.

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<PAGE>

ITEM 3.  DEFAULT UPON SENIOR SECURITIES.

         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.


     There were no matters  submitted to a vote of  Security-Holders  during the
three months ended September 30, 1999.

ITEM 5.  OTHER INFORMATION

         Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

   2.       Exhibits:

   Item No.        Description of Document                Page No. (footnote)
   --------        -----------------------                -------------------
     1.            Order on Final Decree                  Page 8,  Note 5

     2.            Assignment and Assignment Agreement    Page 8,  Note 5
                   (Mark Pinson Agreement)


   (b)      Reports on Form 8-K:   None


                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                               VERITEC INC.
                                               ------------
                                               (Registrant)
Date:  October 8, 1999
      ----------------
                                  By: /s/ Jack E. Dahl
                                     ____________________________________
                                     Jack E. Dahl
                                     Chief Financial Officer and Chief
                                     Accounting Officer








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