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

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

         For the quarterly period ended   December 31, 2000
                                       ----------------------
--------          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)

            1000 BOONE AVENUE NORTH SUITE 110, GOLDEN VALLEY MN 55427
        --------------------------------------------------------------
               (Address of principal executive offices, zip code)

                                  763-525-8470
                         ------------------------------------
              (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, 2000 the company had:

                        Number of Shares of Common Stock
             ------------------------------------------------------
                                    6,655,939
             ------------------------------------------------------

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<PAGE>
                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements
-----------------------------
                                   Veritec Inc
                                 Balance Sheets

                                            (unaudited)        (unaudited)
                                         December 31, 2000     June 30, 2000
Assets
      Current Assets
            Cash                          $       10,625      $         3,964
            Accounts Receivable                    9,537               49,650
            Inventory                             15,249               44,559
            Other                                  2,900                2,500
                                          --------------      ---------------
      Total Current Assets                        38,311              100,673

      Fixed Assets                               161,610              180,533
                                          --------------      ---------------

Total Assets                              $      199,921      $       281,206
                                          ==============      ===============

Liabilities and Equity
      Liabilities

      Current Liabilities
            Accounts Payable & Accrued Expenses  516,562              447,446


      Total Current Liabilities                  516,562              447,446

      Long Term Liabilities
            Secured Note Payable          $            -      $       108,366
            MG Secured Note                      397,374              252,322
            Prepayment on Subscription Rec        21,936               18,047
                                          --------------      ---------------
      Total Long Term Liabilities         $      419,310      $       378,735

Total Liabilities                               $935,872      $       826,181
                                          ==============      ===============
      Equity
            Subscription Receivable       $   (1,160,477)     $    (1,212,049)
            Common Stock                          66,558               65,306
            Additional Paid in Capital        11,547,773           11,431,439
            Preferred Stock                      366,007              366,007
            Retained Earnings                (11,172,404)         (11,195,678)
            Net Income                          (383,409)                   -
                                          --------------      ---------------
      Total Equity                        $     (735,951)     $      (544,975)

Total Liabilities and Equity              $      199,921      $       281,206
                                          ==============      ===============


                                       2
<PAGE>
                                   Veritec Inc
                             Statement of Operations
                                 (unaudited)                   (unaudited)
<TABLE>
<S>                                <C>              <C>               <C>              <C>
                                     For the six months ended          For the three months ended
                                   31-Dec-00         31-Dec-99         31-Dec-00       31-Dec-99

Revenue                            $ 125,023        $  232,652        $  43,771        $  186,800
Cost of Sales                        (51,921)          (66,930)         (32,612)          (63,347)
                                   ---------        ----------        ---------        ----------
Gross Profit                       $  73,102        $  165,722        $  11,159        $  123,453

Commissions                           (4,247)          (56,142)          (1,760)          (42,357)
                                   ---------        ----------        ---------        ----------

Gross Profit after Commissions     $  68,855        $  109,580        $   9,399        $   81,096

Operating Expense
Engineering                           79,606            91,788           77,913            48,991
Marketing                              8,905            33,408            8,905            29,616
Administrative                       335,971           108,508          142,966            57,533
                                   ---------        ----------        ---------        ----------
Total Operating Expense            $ 424,482        $  233,704        $ 229,784        $  136,140

Net Operating Profit (loss)         (355,626)         (124,124)        (220,385)          (55,044)

Financing Expense                    (27,782)           49,724          (21,167)           20,344
                                   ---------        ----------        ---------        ----------
Net Profit (loss)                  $(383,409)       $  (74,400)       $(241,552)       $  (34,700)
                                   =========        ==========        =========        ==========
</TABLE>























                                       3
<PAGE>
                Statement of Cash Flow For the six months ending:
                                          (unaudited)            (unaudited)
                                           31-Dec-00              31-Dec-99
Cash flow from operating activities

Net Loss                                    $  (383,409)          $  (74,400)

Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation & amortization                 $    22,162           $    9,216
(Increase) decrease in assets:
Accounts receivable                         $    40,113           $  (62,133)
Inventory                                        28,580               (7,429)
Increase (decrease) in liabilities
Accounts payable & accrued expenses              51,575              (87,259)
Accrued interest                                 (8,855)              19,969
Deferred compensation                            50,000             (279,286)
Commissions payable                                   -               21,868
                                            -----------           ----------

Total adjustments                           $   183,575           $ (385,054)

Cash flow from investing activities
Purchase of tangible assets                      (3,238)
Purchase of intangible assets                         -             (200,000)
                                            -----------           ----------
Net cash used for investing activities      $    (3,238)          $ (200,000)

Cash flow from financing activities
Issuance of common stock for debt           $         -           $  717,422
Issuance of notes payable                        36,686              105,000
Issuance of preferred stock from advances                           (240,198)
Prepayment on subscriptions receivable            3,889               67,798
Payments on subscriptions receivable             51,573               54,242
Issuance of common stock                        117,586                    -
                                            -----------           ----------
Net cash provided by financing activities   $   209,734           $  704,264

Increase (decrease) in cash position        $     6,661           $   44,810
Cash at beginning of period                       3,964                3,664
                                            -----------           ----------
Cash at end of period                       $    10,625           $   48,474
                                            ===========           ==========















                                       4
<PAGE>
                              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, 2000.  In the opinion of  management,  the  unaudited  financial  statements
reflect all adjustments  (consisting of normal recurring  accruals only),  which
are necessary to present fairly the consolidated financial position,  results of
operations,  and  changes in cash flow of the  company.  Operating  results  for
interim  periods are not  necessarily  indicative  of the  results  which may be
expected for the entire year.

                                      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 100% of the revenues  earned from
sales of product  and  royalties  during this  quarter.  All sales were made and
received in United States dollars. There was no currency exchange risk.


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

Notes payable to a group of secured creditors - "The Gant Group"
----------------------------------------------------------------
         On  December 1, 2000 the  Matthews  Group LLC paid the note held by the
Gant Group in full. As a result of this payment the liens held by the Gant Group
have been assigned to the Matthews Group.










                                       5
<PAGE>
                         Liquidity and Capital Resources
                         -------------------------------
Debt owed to the company at December 31, was as follows:

                                   (unaudited)    (unaudited)        Increase
                                    31-Dec-00      30-June-00        (decrease)

Secured Note Payable                                $108,366        $  (108,366)
Convertible secured note             $397,374        252,322            145,052
Bank overdraft                                        35,362            (35,362)
Accounts payable & accrued expenses   538,498        430,131        $   108,367
                                    ---------       --------        -----------

Total Liabilities                    $935,872       $826,181        $   109,691
                                    =========       ========        ===========

         During the period  ending  December  31, 2000 the company  added to its
current  liabilities  during the period  accounting  for 99% of the  increase in
debt. The remaining  increase in liabilities  resulted from the restructuring of
the amounts owed to the Gant Group.  The  additional  payables  were incurred as
professional  services  in order to provide  litigation  and  patent  protection
services.

         The  working  capital of the  company  is shown  below.  The  company's
liquidity has declined during the quarter.

                                     31-December-2000              30-June-2000
                                        (unaudited)                 (unaudited)
     Working capital (deficit)          $(478,251)                   $(346,772)
                                        =========                    =========

         The company does not expect  revenues from operations to be adequate to
meet all costs and expenses of the company for the remainder of the fiscal year.
The company must secure  adequate  and stable  financing to allow it to meet the
selling  opportunities  that exist. The company is continuing to solicit present
customers,  develop future customers, add sufficient staff, and raise additional
investment in order to increase its 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 company operations.

Financial and Operational Outlook
---------------------------------
         The  royalty  from  Mitsubishi  for sales in Korea and other  countries
continued to be received  and is expected to bring a constant  stream of revenue
into the company on a quarterly basis in the future.

         Working  models of our  scanners  have been  received and paid for by a
company  in North  America  and  Korea.  Future  sales to  these  companies  are
possible.

Results of Operations
---------------------
         Comparison  of the quarter  ending  December  31, 2000 with the quarter
ending December 31,1999.

                                       6
<PAGE>
         The Company had revenues of $43,771 in the quarter  ended  December 31,
2000 as compared with $186,800  during the quarter ending December 31, 1999. The
revenues for the quarter in 2000 were from sales of scanners and royalties.  The
revenues from the 1999 quarter were also from scanner sales,  engineering sales,
and royalties. The Company is in discussion with several potential customers for
fixed and portable scanner sales but cannot  reasonably  project future revenues
at this time.  Foreign  business  companies  have inquired  about  licensing the
Company's  software for use outside of North  America.  There is no assurance at
this time that the company can generate  sufficient revenue to break even in the
foreseeable future.

         Operating  expenses  increased  in the  December  31,  2000  quarter as
compared to the 1999  quarter due to an  increase in  operating  activity on the
part of management to complete the sales made in the present  fiscal year and to
raise money for on going operations of the business.


             Operating expenses for the quarter ending December 31,

Expense category                2000            1999             Inc./(dec)

General & Administrative     $142,966        $ 57,533              $85,433
Sales & marketing               8,905          29,616              (20,711)
Engineering, R&D               77,913          48,991               28,922
                             --------        --------              -------

Total                        $229,784        $136,140             $ 93,644
                             ========        ========             ========

         Engineering, R&D expenses continue to decrease as the Company moves out
of the engineering  development phase of its products and into the marketing and
selling phase of its operations.

         Sales and  marketing  expenses  decreased  due to time spent  trying to
attract capital investment in the company.

         General  and  administrative  cost  increased  due to cost  of  finding
capital, as well as the addition of new employees and professional fees incurred
in for the continued litigation and protection of patents.

Capital Expenditures and Future Commitments
-------------------------------------------

         Capital  expenditures  in the  amount of $3,238  were made  during  the
period for office and technical equipment.  There are no current commitments for
material capital expenditures during the next 6 months. The company believes its
need for additional  capital  equipment will continue if expected new orders are
placed for its  products.  The amount of such  additional  capital  required  is
uncertain and may be beyond that which is generated from operations.


Factors that may effect future results.
---------------------------------------
         The Matthews  Group LLC continues to make  payments of  $18,518.52  per
month as required by the  subscription  agreement.  The Matthews  Group LLC has,

                                       7
<PAGE>
from time to time,  advanced amounts in addition to the required monthly payment
as needed to finance the  continued  operations  of the company.  The  company's
marketing, sales, and production program will require additional financing until
the revenue from sales exceeds the cash provided from sales  collections and the
payments of $18,518.52 per month.  There is no formal  commitment on the part of
the Matthews Group LLC or any other person to provide this additional cash.

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

Item 1.  Legal Proceedings.
---------------------------
         As explained more completely in Form 10-KSB filed for the period ending
June 30, 2000 by the  company,  a  shareholder  is suing the company and various
individuals  alleging  actions  were  taken  without  proper  authority  of  the
corporation's  board of directors and/or contrary to the plan of  reorganization
the corporation filed and completed under Chapter 11 of the U.S. Bankruptcy Act.
During this quarter the California court granted the motion to transfer the suit
to the Federal District Court in Minnesota.  No further action has been taken on
this suit at the time of this report.

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.
------------------------------------------

                                Form 8-K Filings

 Date of Filing           Items Reported           Financial Statements Filed
 --------------           --------------           --------------------------
                           Other Events:
 January 31, 2001       Change in Officers                     None

                        Refinancing of Secured Note

 December 5, 2000          Other Events:                       None
                        Change In Officers



                                       8
<PAGE>


                                   SIGNATURES

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

                                                       Veritec  Inc.

Date:             February 6, 2000                     /s/ Van Tran
     ----------------------------------                -----------------------
                                                       Van Tran - CEO











































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