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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        March 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)

                    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 March 31,  2000 the Company  had  6,501,572  shares of
common stock.

                       This document consists of 8 pages,
                         The Exhibit index is on page 8


                                  1
<PAGE>
                                   Veritec Inc
                                  Balance Sheet
<TABLE>
<S>                                     <C>              <C>             <C>
                                      March 31, 1999   March 31, 2000   June 30, 1999
                                        (unaudited)      (unaudited)       (audited)
Assets
Current Assets
   Cash                                 $       153    $      13,416    $      3,664
   Accounts Receivable                                       293,857          23,000
   Inventory                                 23,936           86,326          14,463
                                        -----------    -------------    ------------
     Total Current Assets               $    24,089    $     393,599    $     41,127

Intellectual Property                  $         -    $     183,333    $          -
Furniture & Equipment (net)                   9,979           12,267           7,246
                                        -----------    -------------    ------------
   Note receivable Matthews Group                      $   1,236,889
Total Assets                            $    34,068    $   1,826,088    $     48,373
                                        ===========    =============    ============

Liabilities & Shareholder's Equity
Currents Liabilities
   Note payable-factoring               $         -    $     100,000    $          -
   Note payable                              50,819           50,000          45,000
   Note payable-secured                     156,128          241,495         198,704
   Administrative cost-per chapter           42,737            3,802          42,737
   Accounts payable & Accrued liabilities    79,099           61,943         134,764
   Deferred Compensation                    233,275           33,636         301,406
   Accrued interest                          38,119           94,826          60,262
   Commissions payable                        2,500           86,143           2,500
   Deferred revenue                               -           22,767               -
                                        -----------    -------------    ------------
      Total current liabilities         $   602,677    $     694,612    $    785,373

Secured notes payable-long term         $   130,325    $      44,958    $     87,749
                                        -----------    -------------    ------------
         Subtotal                       $   733,002    $     739,570    $    873,122

Prepayments on subscription receivable  $   207,735    $      12,243
Prepayment on stock                               -                -         240,198
                                        -----------    -------------    ------------
Total Liabilities                       $   940,737          751,813       1,113,320

Shareholder's Equity
   Subscriptions receivable             $         -    $           -    $          -
   Preferred Series H                                       360,718           7,273
   Common stock                             183,164           65,015          35,988
   Additional paid in capital             9,504,498       11,297,710       9,644,401
   Accumulated deficit                 (10,594,331)     (10,649,168)    (10,752,609)
                                        -----------    -------------    ------------
   Net shareholder's equity             $  (906,669)     $ 1,074,275     $(1,064,947)
                                        -----------    -------------    ------------
Liabilities and Shareholder' s Equity   $    34,068      $ 1,826,088      $   48,373
                                        ===========    =============    ============
</TABLE>


                                  2
<PAGE>
                                   Veritec Inc
                             Statement of Operations

                                          Year Ending             (Unaudited)
                                            6/30/99               At 03/31/00

Revenue:
     Product Sales                       $     51,745            $   1,000,393
     Engineering Services                      42,198            $      23,785
     Licenses & Royalties                      22,405            $      48,780
                                         ------------            -------------
          Total Revenue                  $    116,348            $   1,072,958

Cost of Sales                                  39,298            $     334,943
                                         ------------            -------------
          Gross Profits                  $     77,050            $     738,015
                                         ------------            -------------
Sales Commissions                               6,190            $     301,809

          Cross Profits after Commissions                        $     436,206
                                                                 -------------
Operating Expenses

     Administration                      $    299,298            $     155,943
     Sales & Marketing                         36,521            $      73,953
     Engineering Services & R&D                                  $     160,325
                                                                 -------------
          Total Expenses                 $    464,761            $     390,221
                                         ------------            -------------
Profit (Loss) from Operations            $   (393,901)           $      45,985
                                         ------------            -------------
Interest
     Income                                                      $     106,714
     Expense                                  (57,321)           $     (49,742)
                                         ------------            -------------
          Net Interest Income (Loss)                             $      56,972
                                                                 -------------
          Net Profit (Loss)              $   (451,222)           $     102,957
                                         ============            =============



















                                  3
<PAGE>
                                   Veritec Inc
                             Statement of Cash Flow

                                                            March 31, 2000
Operating Activities                                          (unaudited)

              Gain from Operations                             $102,957

Adjustments to reconcile net loss to
net cash used by operating activities
              Depreciation & amortization                        20,187
              (Increase) decrease in assets

                 Accounts receivable                           (270,857)
                 Inventory                                      (71,863)
                 Other Assets                                    (8,127)

               Increase(decrease) in Liabilities
                 Accounts Payable & Accrued Expenses           (111,756)
                 Accrued Interest                                34,564
                 Deferred Compensation                         (267,770)
                 Commissions Payable                             83,643
                 Deferred Revenue                                22,767
                                                             ----------
                 Total Adjustments                             $(569,212)
                                                             ----------
                 Cash used by operating activities             (466,255)
                                                             ----------
               Cash flow from investment activities

                 Purchase of intangible assets                 (200,000)

               Net cash used by investment activities          $(200,000)

               Cash flow from financing activities

                 Issuance of notes payable                     $105,000
                 Conversion of debt to common stock             720,442
                 Payment on subscription receivable              78,470
                 Prepayment on subscription receivable           12,243
                 Issuance of preferred stock from advances     (240,148)
                                                              ---------
                  Net cash provided from financing activities  $676,007

                      Change in cash position                     9,752

                      Cash at beginning of period                 3,664
                      Cash at end of period                     $13,416










                                  4
<PAGE>
                                  VERITEC INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                           March 31, 2000 (unaudited)


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 which may be expected for the entire year.

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

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  The  Matthews  Group  paid
$182,345.87  on September 1, 1999 to bring the note with the Gant Group  current
and has paid 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.  At March 31,
2000, the amount owed to the Gant Group was  $131,691.21  and the amount owed to
the Matthews Group was $241,668.77.

     At a meeting of the Board of Directors of the  Registrant on June 14, 1999,
a date on which  the  Registrant  was in  Chapter  7  bankruptcy,  the  Board of
Directors approved a motion by the Matthews Group as follows:

     "Due to the Matthews Group efforts and risk in salvaging Veritec,
     it desires a resolution from the Board that:  Should the Matthews
     Group acquire Gant's interest, the Matthews Group will be able to
     elect,  in its sole  discretion,  to have the Gant note repaid in
     cash or to have the  obligation  converted to Veritec stock at 10
     cents per share."

Subsequent Events
-----------------
     The  Matthews  Group made the Apri1 1, 2000 payment of  $23,325.38  due the
Gant Group and the promissory note with the Gant Group is current.
                                  5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Liquidity and Capital Resources - December 31, 1999, compared to June 30, 1999.
-------------------------------
      Cash on hand at March 31, 2000  $13,416.


      Debt owed by the Company at March 31, 2000 was as follows:

            Debt category           Mar 31, 2000  June 30, 1999   Incr./(Decr.)
                                  --------------  --------------  -------------
Notes payable                     $     150,000    $     45,000       $105,000

Notes payable, secured                  286,453         286,453              0
Administrative costs per Plan             3,802          42,737        -38,935
Accounts payable and accrued expenses    61,943         134,764        -72,821
Accrued interest                         94,826          60,262         34,564
Commissions payable                      86,143           2,500         83,643
Deferred compensation                    33,636         301,406       -267,770
Deferred Revenue                         22,767                         22,767
                                  --------------  --------------  -------------
                                  $     739,570   $     873,122      $-133,552
                                  ==============  ==============  =============



     During the period  ending March 31, 2000 the Company's  liquidity  improved
due the transfer of $717,422 debt to equity and the results of  operations.  The
Company's  liquidity  (working  capital) is reflected in the table below,  which
shows comparative working capital as of June 30, 1999 and March 31, 2000.

                                        June 30, 1999              Mar 31, 2000

Working capital (deficit)                $(744,246)                 $(301,013)

     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.  As shown in the Financial and Operational Outlook below, the
Company has had continuing business with an International  company.  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
---------------------------------
     The Company  received a purchase  order of $880,000  from an  International
company in December 1999 for product  delivery in December 1999 through March of
2000.  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  $30,000 per quarter  during the next few
quarters.  Sales to companies in Korea have provided the majority of revenues in
the quarter and six months ended December 31, 1999 and there is a possibility of
additional sales to these companies.

                                  6
<PAGE>
     Results of Operations - The quarter and six months ended  December 31, 1999
     ---------------------
compared to the quarter and six months ended December 31, 1998.

     The Company had revenues of $102,957 during the nine months ended March 31,
2000,  as compared to $65,383 for the same period in 1999.  The revenues for all
periods were 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  adequate  revenues to make
the Company profitable.

     Operating  expenses for nine months ended March 31, 2000 increased over the
same period in the previous fiscal year.

                                    For the nine months ended
       Expense category             Mar 31, 1999   Mar 31, 2000   Incr./(Decr.)
                                    -------------  -------------  -------------
General and administrative             $ 168,668        155,943       $(12,725)
Sales and marketing                       29,364         73,953         44,589
Engineering, research and development     94,405        160,325         65,920
                                    =============   ============   ============
                                       $ 292,437       $390,221       $ 97,784
                                    =============   ============   ============
     The increase in Sales and Marketing  expense was due to the and increase in
the allocation of personnel costs to this account.  The Company has added to its
sales personnel.

     The increase in  Engineering  and research was the due to costs incurred in
fulfilling the order mentioned above.

Capital Expenditures and Commitments
------------------------------------
     There were no Capital  expenditures  during the nine months ended March 31,
2000 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  equipment  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
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. Ms. Van Tran, President,
is a principle  in the  Matthews  Group and is an integral  part of managing the
operations of the Company.

                                  7
<PAGE>
PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         None




ITEM 2.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits:  None

         (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:  May 15, 2000
       ------------
                                   By:     ____________________________________
                                            Van Tran
                                            President




























                                  8