________________________________________________________________________________

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
________________________________________________________________________________


                                   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     December 31, 2001
                                                          -----------------

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

                       For the transition period from   ________ to  ________

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

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

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

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

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

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

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

         APPLICABLE  ONLY TO  CORPORATE  ISSUERS:  Indicate the number of shares
outstanding  of each of the  issuer's  classes of common  stock as of the latest
practicable date. As of December 31, 2001 the company had:

                        Number of Shares of Common Stock
            -------------------------------------------------------
                                    6,720,849
            -------------------------------------------------------

                                       1
<PAGE>



Table of Contents



                                   FORM 10-QSB
                                  VERITEC, INC.

                                      INDEX
                                                                           Page
PART I.                 FINANCIAL INFORMATION                                 3

Item 1                  Financial Statements                                  3

Item 2                  Management's Discussion and Analysis of               7
                        Financial Condition and Plan of Operation

PART II.                OTHER INFORMATION                                     9

Item 6                  Exhibits and Reports on Form 8-K                      9

SIGNATURES                                                                   10
































                                       2
<PAGE>
                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements


                                   VERITEC INC
                                 BALANCE SHEETS
                                   (unaudited)

                                               31-Dec-01           30-June-01
             ASSETS
Current Assets
Cash                                                                   $10,267
                                                    $1,048
Receivables                                         84,692               3,938
Inventories                                              0                   0
Prepaids                                                 0               9,792
                                                  --------            --------
Total Current Assets                                85,740              23,997

Fixed Assets (net)                                  14,011              17,740
Intangible assets (net)                            113,338             133,336
                                                  --------            --------

Total Assets                                       213,089             175,073
                                                  ========            ========

        LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities

Notes payable                                            0             $25,000
Notes Payable (secured)                           $397,374             397,374
Bank overdraft                                      32,005               5,862
Accounts payable & accrued expenses                206,669             516,030
                                                  --------            --------
Total current liabilities                          636,048             944,266
                                                   -------             -------

Prepayment on stock & subscription                 287,567             219,678
                                                   -------             -------

Stockholders' equity (deficit)
    Preferred stock, par value $1.00,              366,007             366,007
    authorized 10,000,000 shares, 275,000
    shares of Series H authorized
Common stock, par value $.01, authorized            67,208              66,959
            20,000,000 shares
Subscription receivable                         (1,049,298)         (1,106,271)
Additional paid in capital                      11,694,159          11,613,478
Accumulated deficit                            (11,788,602)        (11,929,044)
                                               -----------         -----------
Stockholders' equity (deficit)                    (710,526)           (988,871)
                                                   -------             -------
Total liabilities & stockholders' equity           213,089             175,073
                (deficit)                          =======             =======

                                       3
<PAGE>

                                   VERITEC INC
                            STATEMENTS OF OPERATIONS
                                   (unaudited)

                                  For the 6 month period  For the 3 month period
                                          ending                  ending

                                   31-Dec-01   31-Dec-00   31-Dec-01   31-Dec-00

Total Revenues                      376,641     125,023     107,903      43,771

Cost of Sales                             0      51,921           0      32,612
                                   --------    --------    --------    --------
Gross Profit                        376,641      73,102     107,903      11,159

Sales Commission                          0       4,247           0       1,760
                                   --------    --------    --------    --------

Gross profit after commissions &
warranty                            376,641      68,855     107,903       9,399

Expenses:

Administration                      171,785     335,971      83,659     142,966
Sales & Marketing                     7,405       8,905       3,589       8,905
Engineering & R&D                   154,572      79,606     108,287      77,913
                                   --------    --------    --------    --------

Total Expenses                      333,762     424,482     195,535     229,784

Income (loss) from operations        42,879    (355,626)    (87,632)   (220,385)

Debt Forgiveness                    117,988     117,988
Interest Income (expense) net       (20,426)    (27,782)     (9,977)    (21,167)

Total other income (expense)         97,562     (27,782)    108,011     (21,167)

Net Income (loss)                   140,441    (383,409)     20,379    (241,552)

Earning (loss) per share               0.02       (0.06)       0.00       (0.04)




                       See Notes to Financial Statements.









                                       4
<PAGE>

                                   VERITEC INC
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                   For the 6 month period ending


                                                         31-Dec-01     31-Dec-00

Cash flow from operating activities
Net income (loss)                                         140,442      (383,409)

          Adjustments to reconcile net income (loss) to net cash from
                              operating activities

Debt Forgiveness                                         (117,988)
Depreciation and amortization                              23,725        22,162
(Increase) decrease in assets
Receivables                                               (80,754)       40,113
Inventories                                                28,580
Prepaids                                                    9,792
Increase (decrease) in liabilities
Accounts payable & accrued expenses                      (171,373)       92,720
Changes in secured liabilities                            (25,000)
Bank overdraft                                             26,143
Purchase of tangible assets                                     0        (3,238)
                                                         --------      --------
Net cash used by operating activities                    (195,013)     (203,073)

Cash flow from financing activities
Issuance of notes payable                                       0        36,686
Prepayment on subscription receivable                      67,889         3,889
Subscription receivable                                    56,973        51,573
Issuance of stock                                               0         1,252
Added paid in capital                                      60,931       116,334
                                                         --------      --------
Net cash provided by financing activities                 185,793       209,734

Net cash increase for period                               (9,220)        6,661
Cash at beginning of the period                            10,267         3,964
rounding
Cash at the end of the period                               1,047        10,625
                                                         ========      ========

                       See Notes to Financial Statements.










                                       5
<PAGE>


NOTES TO FINANCIAL STATEMENTS

A.  BASIS OF PRESENTATION

         The accompanying  unaudited financial  statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with  the  instructions  to  Form  10-QSB  and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the six-month  period ended December 31,
2001 are not necessarily  indicative of the results that may be expected for the
year  ended June 30,  2002.  For  further  information,  refer to the  financial
statements and footnotes  thereto  included in the Company's Form 10-KSB for the
year ended June 30, 2001.

Cash

         Cash balances are  maintained in a single  financial  institution.  The
balances from time to time exceed the federally insured limits of $100,000.  The
company has  experienced no losses in these accounts and believes that it is not
exposed to any significant risk of loss on its cash balances.  The cost and fair
market value of any financial instruments held are approximately equal.

Revenues

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

         Foreign-based  revenue  accounted  for 94% of the revenues  earned from
sales of product and royalties  during this  quarter.  All sales of products for
the  quarter  were  received  in United  States  dollars.  There was no currency
exchange risk.


Nature of Business

         Veritec Inc. (the "Company") was incorporated in Nevada on September 8,
1982. The Company is primarily engaged in development,  marketing and sales of a
line of microprocessor-based  encoding and decoding system products that utilize
its patented  Vericode Symbol  technology.  The Company's  VeriSystem  enables a
manufacturer  or  distributor  to attach  unique  identifiers  or coded  symbols
containing   binary  encoded  data  to  a  product,   which  enables   automatic
identification  and  collection  of data.  The  Company has also  developed  its
Veritaggant  Covert  Identification  System,  which enables the application of a
label or tag to a product for subsequent  verification of its authenticity.  The
Veritaggant Covert  Identification System is not currently being marketed by the
Company.


                                       6
<PAGE>

Use of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and reported  amounts of revenues and expenses  during the reporting
period. Actual results could differ from those estimates


Debt Forgiveness

         During the quarter the Company entered into a settlement agreement with
a former employee  relating to breach of contract.  As a part of this settlement
agreement  the Company  obtained  the Pulnix  software  library it sought.  This
settlement agreement also relieved the Company of any future obligations to this
former  employee.  The Company  recognized a gain on debt forgiveness of $75,988
relating to this settlement.

         During  the  quarter  the  Company   further   settled  some  remaining
pre-petition and bankruptcy  period  obligations  through the issuance of 25,000
shares of the Company's  common stock as provided for in the  Company's  plan of
reorganization.  These  settlements  resulted  in  recognition  of gains on debt
forgiveness totaling $42,000.

Other Information

         Accounts Payable of $20,000 were settled through the issuance of 25,000
shares of common stock.


Item 2.  Management's Discussion and Analysis

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



Liquidity and Capital Resources

Debt owed by us at December 31, 2001 was as follows:

                                             (unaudited) (unaudited)   increase
                                              31-Dec-01   31-Dec-00   (decrease)
                                               --------    --------    --------

Notes Payable (secured)                         397,374     397,374           0
Convertible note (secured)
Bank overdraft                                   32,005                  32,005
Accounts payable & accrued expenses             206,669     516,562    (309,893)
                                               --------    --------    --------
Total liabilities                               636,048     913,936    (277,888)
                                               ========    ========    ========


                                       7
<PAGE>

Our working  capital is shown below.  Working capital for December 31, 2001, has
been adjusted by $79,713 to reflect  payables  recognized as  liabilities on our
balance sheet, but the validity of which are disputed by the Company.

                                             (unaudited) (unaudited)
                                              31-Dec-01   31-Dec-00
                                               --------    --------
Working capital (deficit)                      (470,595)   (478,251)
                                               ========    ========



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

Financial and Operational Outlook

         Revenues for the quarter and six months ended  December 31, 2001,  were
$107,903 and $376,641 respectively.  Sales of VeriCode(R) readers, software, and
royalties received from Mitsubishi generated these revenues.



Results of Operations


         Revenues for the quarter and six months ended  December 31, 2001,  were
$107,903, and $376,641,  respectively.  The quarter's revenue is a 146% increase
from the $43,771  revenue in the same quarter in 2000. The six-month  revenue of
$376,641 is a 201% increase from the same half of the previous  year.  Purchases
in  this  industry  fluctuate,  as new  factories  are  opened,  so  significant
quarterly  fluctuations can be expected. The cost of sales decreased from 41% of
revenue  in the  quarter  ended  December  30,  2000 to 0% for the  most  recent
quarter.  This  significant  improvement  reflects  our goal to  concentrate  on
selling software rather than hardware.


         Operating  expenses  decreased for the quarter ended December 31, 2001,
to  $195,535.  This  represents  a 54%  decrease  from the same quarter in 2000.
Operating  expenses  decreased for the two quarters  ended December 31, 2001, to
$333,762.  This  represents a 21%  decrease  from the same two quarters in 2000.
This  decrease  includes a  significant  decrease in general and  administrative
expenses,  which were high in 2000 due to expenses  associated with transferring
our business from  California.  In the quarter ended  December 31, 2001 disputed
payables totaling $117,988 were resolved,  resulting in a positive impact to the
statement of operations as shown in the category "Other Income".



                                       8
<PAGE>


Capital Expenditures and Future Commitments


         No capital  expenditures  for  office  equipment  were made  during the
period. The Company has entered into a agreement,  subject to Board approval, to
acquire a fifty  percent  interest  in a company  to be  formed,  Veritec-Iconix
Ventures,  Inc. (VIVI).  The Matthews Group, the Company's largest  stockholder,
would acquire the other fifty  percent  interest in VIVI.  VIVI, in turn,  would
acquire Iconix, a Japanese  company  operating in a similar  industry.  If Board
approval  is obtained  it would  require  the  Company to pay a cash  payment of
$50,000 to VIVI and issue VIVI 150,000 shares of the Company's common stock. The
Matthew  Group  would also pay a cash  payment  of $50,000 to VIVI and  transfer
150,000  shares of the  Company's  common stock it owns to VIVI.  VIVI, in turn,
would pay  $100,000  and 300,000  shares of the  Company's  common stock for one
hundred percent ownership of Iconix.

         Should the VIVI acquisition  occur, it would require additional capital
to fund the operations of VIVI.  VIVI,  with assistance from the Company and the
Matthews Group,  would seek capital from various sources.  There is no assurance
that adequate capital can be raised.





Factors that may affect future results.

         The Matthews  Group  continues to make payments of $18,518.52 per month
as required by its subscription agreement.  The Matthews Group has, from time to
time,  advanced amounts in addition to the required monthly payment as needed to
finance our continued operations, and we rely on these advances. We will require
financing in excess of the Matthews Group's  commitment until revenue  increases
sufficiently to cover our expenses. We are seeking capital from various sources.
There is no assurance  that adequate  capital can be raised.  There is no formal
commitment  on the part of the  Matthews  Group or any other  person to  provide
additional cash.

         We  have  begun  an  arbitration  process  with  Mitsubishi,  regarding
underpayment  of royalties.  An adverse outcome to this  arbitration  proceeding
could lower our royalty receipts.


                            PART II OTHER INFORMATION


Item 1.  Legal Proceedings.

         As explained  more  completely  in our Form 10-KSB filed for the period
ending June 30, 2000, a shareholder is suing the company and various individuals
alleging that actions were taken without proper  authority of the  corporation's
board of directors and/or contrary to the plan of reorganization the corporation
filed and completed under Chapter 11 of the U.S.  Bankruptcy Act. This action is
currently pending.

                                       9
<PAGE>

         We have filed a lawsuit against Veri-Code  Systems,  Inc. for trademark
infringement. This action is currently pending.


Item 2.  Changes in Securities.

         None.

Item 3.  Defaults Upon Senior Securities.

         None.

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

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

Item 5.  Other Information.

         None.

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

         None.












                                   SIGNATURES

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

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

Date:             February 14th, 2002          /s/ Van Tran
         ----------------------------------    --------------------------------
                                                   Van Tran - CEO







                                       10