Veritec (VRTC) 10-Q 10 May 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information
Entity Registrant Name	VERITEC INC
Entity Central Index Key	0000773318
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity's Reporting Status Current?	No
Entity Filer Category	Non-accelerated Filer
Is Entity Small Business?	true
Is Entity Emerging Growth Company?	false
Entity Common Stock, Shares Outstanding		39,538,007
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Current Assets:
Cash	$ 112,264	$ 139,086
Accounts receivable	14,410	7,071
Prepaid expenses	5,987	5,328
Total Assets	132,661	151,485
Current Liabilities:
Accounts payable	767,986	671,197
Accounts payable, related party	96,110	96,110
Accrued expenses	118,809	63,507
Convertible notes and notes payable (includes $583,299 and $563,826 of convertible notes and notes payable in default)	632,479	602,261
Convertible notes and notes payable, related party (includes $203,874 and $265,729 of notes payable, related party in default)	3,450,173	2,994,599
Deferred revenues	7,500	30,000
Total Current Liabilities	5,073,057	4,457,674
Contingent earnout liability	155,000	155,000
Total Liabilities	5,228,057	4,612,674
Stockholders' Deficiency:
Convertible preferred stock, par value $1.00; authorized 10,000,000 shares, 276,000 shares of Series H authorized, 1,000 shares issued and outstanding	1,000	1,000
Common stock, par value $.01; authorized 150,000,000 shares and 50,000,000 shares, respectively; 39,538,007 shares issued and outstanding	395,380	395,380
Common stock to be issued, 145,000 shares to be issued as of September 30, 2017 and June 30, 2017, respectively	12,500	12,500
Additional paid-in capital	18,105,470	18,099,576
Accumulated deficit	(23,609,746)	(22,969,645)
Total Stockholders' Deficiency	(5,095,396)	(4,461,189)
Total Liabilities and Stockholders' Deficiency	$ 132,661	$ 151,485

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Convertible preferred stock, par value	$ 1	$ 1
Convertible preferred stock, shares authorized	10,000,000	10,000,000
Convertible preferred stock, shares issued	1,000	1,000
Convertible preferred stock, shares outstanding	1,000	1,000
Common stock, par value	$ .01	$ 0.01
Common stock, shares authorized	150,000,000	50,000,000
Common stock, shares issued	39,538,007	39,538,007
Common stock, shares outstanding	39,538,007	39,538,007
Common stock, shares to be issued	145,000	145,000
Convertible notes and notes payable, in default	$ 583,299	$ 563,826
Convertible notes and notes payable, related party, in default	$ 203,874	$ 265,729
Series H Convertible
Convertible preferred stock, shares authorized	276,000	276,000
Convertible preferred stock, shares issued	1,000	1,000
Convertible preferred stock, shares outstanding	1,000	1,000
Common stock, par value	$ 1,000	$ 1,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)		3 Months Ended		9 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Revenue:
Mobile banking technology revenue		$ 29,604	$ 31,324	$ 90,194	$ 92,441
Other revenue, management fee related party		44,536	35,034	137,052	208,527
Total revenue		74,140	66,358	227,246	300,968
Cost of Sales		57,697	61,189	175,869	168,305
Gross Profit		16,443	5,169	51,377	132,663
Operating Expenses:
General and administrative expenses		143,451	132,381	457,001	446,308
Research and development		12,403		12,453	19,938
Total Operating Expenses		155,854	132,381	469,454	466,246
Loss from Operations		(139,411)	(127,212)	(640,101)	(333,583)
Other Income (Expense):
Change in fair value of derivative liabilities			(186,829)		519,582
Interest expense	[1]	(75,547)	(63,274)	(222,024)	(181,009)
Total other income (expense)		(75,547)	(250,103)	(222,024)	338,573
Net Income (Loss)		$ (214,958)	$ (377,315)	$ (640,101)	$ 4,990
Net Loss Per Common Share - Basic and Diluted		$ (0.01)	$ (0.01)	$ (0.02)	$ 0
Weighted Average Number of Shares Outstanding - Basic and Diluted		39,538,007	39,538,007	39,538,007	39,538,007
Interest expense to related parties		$ 68,798	$ 56,538	$ 201,805	$ 160,805
[1]	Includes interest expense to related parties

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Deficiency) (Unaudited) - USD ($)	Preferred Stock	Common Stock	Common Stock to be Issued	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, Shares at Dec. 31, 2016	1,000	39,538,007
Beginning balance, Amount at Dec. 31, 2016	$ 1,000	$ 395,380	$ 12,500	$ 17,974,576	$ (22,569,130)	$ (4,185,674)
Net Income (Loss)					(377,315)	(377,315)
Ending balance, Shares at Mar. 31, 2018	1,000	39,538,007
Ending balance, Amount at Mar. 31, 2018	$ 1,000	$ 395,380	12,500	17,974,576	(22,946,445)	(4,562,989)
Beginning balance, Shares at Jun. 30, 2017	1,000	39,538,007
Beginning balance, Amount at Jun. 30, 2017	$ 1,000	$ 395,380	12,500	17,974,576	(22,951,435)	(4,567,979)
Stock-Based Compensation
Net Income (Loss)					4,990	4,990
Ending balance, Shares at Mar. 31, 2018	1,000	39,538,007
Ending balance, Amount at Mar. 31, 2018	$ 1,000	$ 395,380	12,500	17,974,576	(22,946,445)	(4,562,989)
Beginning balance, Shares at Dec. 31, 2017	1,000	39,538,007
Beginning balance, Amount at Dec. 31, 2017	$ 1,000	$ 395,380	12,500	18,100,148	(23,394,788)	(4,885,760)
Stock-Based Compensation				5,322		5,322
Net Income (Loss)					(214,958)	(214,958)
Ending balance, Shares at Mar. 31, 2019	1,000	39,538,007
Ending balance, Amount at Mar. 31, 2019	$ 1,000	$ 395,380	12,500	18,105,470	(23,609,746)	(5,095,396)
Beginning balance, Shares at Jun. 30, 2018	1,000	39,538,007
Beginning balance, Amount at Jun. 30, 2018	$ 1,000	$ 395,380	12,500	18,099,576	(22,969,645)	(4,461,189)
Stock-Based Compensation				5,894		5,894
Net Income (Loss)					(640,101)	(640,101)
Ending balance, Shares at Mar. 31, 2019	1,000	39,538,007
Ending balance, Amount at Mar. 31, 2019	$ 1,000	$ 395,380	$ 12,500	$ 18,105,470	$ (23,609,746)	$ (5,095,396)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		15 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$ (214,958)	$ (377,315)	$ (640,101)	$ 4,990
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Amortization				16,042
Change in fair value of derivative liabilities		186,829		(519,582)
Stock-based compensation expense			5,894		$ 5,322
Interest accrued on notes payable			222,024	181,009
(Increase) Decrease in:
Accounts receivable			(7,339)	(493)
Prepaid expenses			(659)	(2,110)
(Decrease) Increase in:
Accounts payable			96,788	(2,780)
Accrued expenses			55,302	(14,057)
Deferred revenues			(22,500)	(34,993)
Net cash used in operating activities			(290,591)	(371,974)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable			10,000
Proceeds from notes payable - related party			253,769	359,044
Net cash provided by financing activities			263,769	359,044
NET DECREASE IN CASH			(26,822)	(12,930)
CASH AT BEGINNING OF PERIOD			139,086	46,693
CASH AT END OF PERIOD	$ 112,264	$ 33,763	112,264	33,763	$ 112,264
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid
Taxes Paid

Nature of Business and Summary

Nature of Business and Summary of Significant Accounting Policies	9 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Significant Accounting Policies	NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Veritec, Inc. (Veritec) was formed in the State of Nevada on September 8, 1982. Veritec’s wholly owned subsidiaries include Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). Nature of Business The Company is currently engaged in the development, marketing, sales and licensing of products and professional services related to mobile banking prepaid debit cards. As a Cardholder Independent Sales Organization, Veritec is able to promote and sell Visa branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa branded card programs on behalf of a sponsoring bank. The Company is currently seeking a bank to sponsor its Prepaid Card programs. The Company has a portfolio of five United States and eight foreign patents. In addition, the Company has seven U.S. and twenty-eight foreign pending patent applications. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required 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 period ended March 31, 2019, are not necessarily indicative of the results that may be expected for the year ending June 30, 2019. The Condensed Consolidated Balance Sheet information as of June 30, 2018 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended June 30, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 5, 2018. These financial statements should be read in conjunction with that report. The accompanying Condensed Consolidated Financial Statements include the accounts of Veritec and its wholly owned subsidiaries, Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. Inter-company transactions and balances were eliminated in consolidation. GOING CONCERN The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the nine months ended March 31, 2019, the Company incurred a loss from operations of $640,101 and used cash in operating activities of $290,591, and at March 31, 2019, the Company had a working capital deficit of $4,940,396 and a stockholders’ deficiency of $5,095,396. In addition, as of March 31, 2019, the Company is delinquent in payment of $787,173 of its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on our June 30, 2018 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2019 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock. The Condensed Consolidated Financial Statements do not include any adjustments that may result from this uncertainty. Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long lived assets, accruals for potential liabilities, and assumptions used in valuing derivatives and stock-based compensation, and the valuation of deferred taxes. Revenue Recognition Prior to January 1, 2018, the Company recognized its revenue in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (ASC) 605 Revenue Recognition Effective July 1, 2018 the Company adopted we adopted ASC 606, Revenue from Contracts with Customers Fair Value of Financial Instruments Fair value measurements adopted by the Company are based on the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB authoritative guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 - Unobservable inputs based on the Company's assumptions. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents, accounts receivable, and current liabilities, including notes payable and convertible notes, approximate their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Net Income (Loss) per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the period ended March 31, 2019 and 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. At March 31, 2019, the Company’s Series H Preferred Stock, Convertible Notes Payable and Options were antidilutive because their exercise prices and conversion prices were out of the money. As of March 31, 2019 and 2018, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. As of March 31, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,496,700 19,017,287 Options 3,650,000 2,500,000 Total 24,156,700 21,527,287 Concentrations During the nine months ended March 31, 2019, the Company had one customer, a related party, which represented 60% of our revenues, one customer that represented 20% of our revenues, and one customer that represented 10% of our revenues. During the nine months ended March 31, 2018, the Company had one customer, a related party that represented 69% of its revenue, and one customer that represented 13% of its revenue. No other customer represented more than 10% of our revenues during the nine months ended March 31, 2019 and 2018. Segments The Company operates in one segment, the mobile financial banking industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Convertible Notes and Notes Pay

Convertible Notes and Notes Payable	9 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Notes Payable	NOTE 2 – CONVERTIBLE NOTES AND NOTES PAYABLE Convertible notes and notes payable-in default Convertible notes and notes payable includes principal and accrued interest and consists of the following at March 31, 2019 and June 30, 2018: March 31, 2019 June 30, 2018 (a) Convertible notes (includes $182,506 of convertible notes in default) $ 221,672 $ 214,576 (b) Notes payable-in default 400,793 387,684 (c) Notes payable 10,014 — Total notes-third parties $ 632,479 $ 602,260 (a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand. At June 30, 2018, convertible notes totaled $214,576. During the nine months ended March 31, 2019, interest of $7,096 was added to principal leaving a balance owed of $221,672 at March 31, 2019. At March 31, 2019, $182,506 of the convertible notes were in default, and convertible at a conversion price of $0.30 per share into 608,354 shares of the Company’s common stock. Certain of the amounts due are subject to a legal proceeding (see Note 6). The balance of $39,166 is due on demand and convertible at a conversion price of $0.08 per share into 489,572 shares of the Company’s common stock. (b) The notes are either secured by the Company’s intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default. At June 30, 2018, the notes totaled $387,684. During the nine months ended March 31, 2019, interest of $13,109 was added to principal leaving a balance owed of $400,793 at March 31, 2019, which are in default. At March 31, 2019, $361,509 of notes are secured by the Company’s intellectual property and $39,284 of notes are unsecured. (c) The note is dated March 18, 2019 and is unsecured, bears interest at 4.0% per annum, and is due on March 17, 2020. On March 18, 2019, the Company issued an unsecured note payable for $10,000. From the date of issuance to March 31, 2019, interest of $14 was added to principal leaving a balance owed of $10,014 at March 31, 2019. Convertible notes and notes payable-related party Notes payable-related party includes principal and accrued interest and consists of the following at March 31, 2019 and June 30, 2018: March 31, 2019 June 30, 2018 (a) Convertible notes-The Matthews Group $ 1,425,661 $ 1,344,782 (b) Notes payable-The Matthews Group 1,748,283 1,384,088 (c) Convertible notes-other related-in default 276,229 265,729 Total notes-related party $ 3,450,173 $ 2,994,599 (a) The notes are unsecured, convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum, and are due on demand. The Matthews Group is a related party (see Note 5) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a significant shareholder of the Company. At June 30, 2018, convertible notes due to The Matthews Group totaled $1,344,782. During the nine months ended March 31, 2019, interest of $80,879 was added to principal leaving a balance owed of $1,425,661 at March 31, 2019. At March 31, 2019, the notes are convertible at a conversion price of $0.08 per share into 17,820,768 shares of the Company’s common stock. (b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 5) dated December 31, 2015. At June 30, 2018, notes due to The Matthews Group totaled $1,384,088. During the nine months ended March 31, 2019, $253,769 of notes payable were issued, interest of $110,426 was added to principal, leaving a balance owed of $1,748,283 at March 31, 2019. (c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.10 to $0.30, and bear interest at rates ranging from 8% to 10% per annum. At June 30, 2018, convertible notes due other related parties totaled $265,729. During the nine months ended March 31, 2019, interest of $10,500 was added to principal leaving a balance owed of $276,229 at March 31, 2019. At March 31, 2019, $203,874 of the notes were due in 2010 and are in default, and the balance of $72,355 is due on demand. At March 31, 2019, $203,874 of the notes are convertible at a conversion price of $0.30 per share into 679,581 shares of the Company’s common stock, $21,706 of the notes are convertible at a conversion price of $0.10 per share into 217,062 shares of the Company’s common stock, and $50,649 of the notes are convertible at a conversion price of $0.08 per share into 633,098 shares of the Company’s common stock.

Stockholders' Deficiency

Stockholders' Deficiency	9 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Stockholders' Deficiency	NOTE 3 - STOCKHOLDERS’ DEFICIENCY At March 31, 2019 and June 30, 2018, 145,000 shares of common stock to be issued with an aggregate value of $12,500 have not been issued and are reflected as common stock to be issued in the accompanying Condensed Consolidated Financial Statements.

Stock Options

Stock Options	9 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Options	NOTE 4 – STOCK OPTIONS A summary of stock options as of March 31, 2019 is as follows: Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2018 2,500,000 $ 0.08 Granted 1,150,000 0.03 Forfeited — $ — Outstanding at March 31, 2019 3,650,000 $ 0.06 Exercisable at March 31, 2019 2,787,500 $ 0.07 In December 2018, the Company granted to its directors and employees, stock options to purchase an aggregate of 1,150,000 shares of Common Stock. The fair value of the stock options granted was determined to be $21,285, and is being amortized over the vesting period of 12 months. The fair value of the stock options was calculated using the Black-Scholes option pricing model using the following assumptions – stock price of $0.03; exercise price of $0.03; expected life of 2 years; volatility of 121%; dividend rate of 0.0% and discount rate of 2.63%. The Company recorded compensation expense pursuant to authoritative guidance provided by the ASC Topic 718 – Stock Compensation The outstanding and exercisable stock options had an intrinsic value of $34,500 and $8,625, respectively, at March 31, 2019. Additional information regarding options outstanding as of March 31, 2019 is as follows: Options Outstanding at March 31, 2019 Options Exercisable at March 31, 2019 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $ 0.03 1,150,000 5.73 $ 0.03 287,500 $ 0.03 $ 0.08 2,500,000 0.86 $ 0.08 2,500,000 $ 0.08 3,650,000 2,787,500 The weighted-average remaining contractual life of stock options outstanding and exercisable at March 31, 2019 is 1.58 years.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Mar. 31, 2019
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 5 – RELATED PARTY TRANSACTIONS The Matthews Group is owned 50% by Ms. Van Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant stockholder of the Company. The Company has relied on The Matthews Group for funding (see Note 4). Management Services Agreement and Related Notes Payable with Related Party The Company’s Barcode Technology was invented by the founders of Veritec as a product identification system for identification and tracking of parts, components and products mostly in the liquid crystal display (LCD) markets and for secure identification documents, financial cards, medical records and other high security applications. On September 30, 2015, the Company sold all of its assets of its Barcode Technology comprised solely of its intellectual property to The Matthews Group. The Company then entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations, on behalf of The Matthews Group, through June 30, 2019. The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations. In consideration of the services provided by the Company to The Matthews Group, the Company earns a fee of 20% of all revenues up to May 31, 2017, and 35% of all revenues from June 1, 2017 to June 30, 2019, from the barcode technology operations. During the three and nine months ended March 31, 2019 and 2018, the Company recorded management fee revenue related to this agreement of $44,536 and $35,034, respectively and $137,052 and $208,527, respectively. Additionally, pursuant to the management services agreement, all cash flow (all revenues collected less direct costs paid) of the barcode technology operations is retained by the Company as proceeds from unsecured notes payable due The Matthews Group. During the nine months ended March 31, 2019 and 2018, cash flow loans of $253,769 and $359,044, respectively, were made to the Company at 10% interest per annum and due on demand. At March 31, 2019, cash flow loans of $1,748,283 are due to The Matthews Group (see Note 2). Advances from Related Parties From time to time, Ms. Van Tran provides advances to finance the Company’s working capital requirements. As of March 31, 2019 and June 30, 2018, total advances to Ms. Van Tran amounted to $96,110, and have been presented as accounts payable, related party on the accompanying Condensed Consolidated Balance Sheets. The advances are unsecured, non-interest bearing, and due on demand. Other Transactions with Related Parties The Company leases its office facilities from Ms. Tran. For the nine months ended March 31, 2019 and 2018, rental payments to Ms. Van Tran totaled $38,250 and $38,250, respectively.

Legal Proceedings

Legal Proceedings	9 Months Ended
	Mar. 31, 2019
Commitments and Contingencies
Legal Proceedings	NOTE 6 – LEGAL PROCEEDINGS On or about November 13, 2017, David A. Badhwa and Denise a Badhwa (collectively “Plaintiffs”) filed a lawsuit in district court in Hennepin County, Minnesota asserting that the Company breached the terms of a promissory note. Plaintiffs seek repayment on the principal of the promissory note, in the amount of $100,000, $10,000 of which Plaintiffs contend Veritec previously paid, plus interest, collection costs and attorney’s fees. As of May 15, 2018, the date of the last communication on the amount of recovery that Plaintiffs seek, Plaintiffs sought an award or settlement in the amount of $162,990. If Plaintiffs prevail on their claims, the Court could award Plaintiffs the unpaid principal in the amount of $90,000, plus interest at the rate of eight percent (8%) per annum on the unpaid balance, as well as attorney’s fees incurred by Plaintiffs in seeking payment on the promissory note in an amount determined by the Court. An award of attorney’s fees could be significant. Veritec has vigorously defended Plaintiffs claims and has asserted a variety of counterclaims against Plaintiffs. Veritec has also attempted to engage Plaintiffs in settlement discussions, but Plaintiffs have not engaged in meaningful negotiations to resolve the claims in dispute. Management has recorded a liability related to this proceeding that it feels is adequate. On September 21, 2016, the Company entered into a settlement agreement with an individual who was a former officer of the Company. The individual in prior years was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's intellectual property without approval. Under the terms of the settlement agreement, the individual agreed to relinquish a convertible note payable and unpaid interest aggregating $364,686, and return 500,000 shares of common stock previously issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. As of March 31, 2019, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

Nature of Business and Summar_2

Nature of Business and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
The Company	The Company Veritec, Inc. (Veritec) was formed in the State of Nevada on September 8, 1982. Veritec’s wholly owned subsidiaries include Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”).
Nature of Business	Nature of Business The Company is currently engaged in the development, marketing, sales and licensing of products and professional services related to mobile banking prepaid debit cards. As a Cardholder Independent Sales Organization, Veritec is able to promote and sell Visa branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa branded card programs on behalf of a sponsoring bank. The Company is currently seeking a bank to sponsor its Prepaid Card programs. The Company has a portfolio of five United States and eight foreign patents. In addition, the Company has seven U.S. and twenty-eight foreign pending patent applications.
Basis of Presentation	BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, the Condensed Consolidated Financial Statements do not include all of the information and footnotes required 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 period ended March 31, 2019, are not necessarily indicative of the results that may be expected for the year ending June 30, 2019. The Condensed Consolidated Balance Sheet information as of June 30, 2018 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended June 30, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 5, 2018. These financial statements should be read in conjunction with that report. The accompanying Condensed Consolidated Financial Statements include the accounts of Veritec and its wholly owned subsidiaries, Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. Inter-company transactions and balances were eliminated in consolidation.
Going Concern	GOING CONCERN The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the nine months ended March 31, 2019, the Company incurred a loss from operations of $640,101 and used cash in operating activities of $290,591, and at March 31, 2019, the Company had a working capital deficit of $4,940,396 and a stockholders’ deficiency of $5,095,396. In addition, as of March 31, 2019, the Company is delinquent in payment of $787,173 of its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on our June 30, 2018 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company believes it will require additional funds to continue its operations through fiscal 2019 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock. The Condensed Consolidated Financial Statements do not include any adjustments that may result from this uncertainty.
Use of Estimates	Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long lived assets, accruals for potential liabilities, and assumptions used in valuing derivatives and stock-based compensation, and the valuation of deferred taxes.
Revenue Recognition	Revenue Recognition Prior to January 1, 2018, the Company recognized its revenue in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (ASC) 605 Revenue Recognition Effective July 1, 2018 the Company adopted we adopted ASC 606, Revenue from Contracts with Customers
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value measurements adopted by the Company are based on the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB authoritative guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 - Unobservable inputs based on the Company's assumptions. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents, accounts receivable, and current liabilities, including notes payable and convertible notes, approximate their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.
Net Income (Loss) per Common Share	Net Income (Loss) per Common Share Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. For the period ended March 31, 2019 and 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. At March 31, 2019, the Company’s Series H Preferred Stock, Convertible Notes Payable and Options were antidilutive because their exercise prices and conversion prices were out of the money. As of March 31, 2019 and 2018, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive. As of March 31, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,496,700 19,017,287 Options 3,650,000 2,500,000 Total 24,156,700 21,527,287
Concentrations	Concentrations During the nine months ended March 31, 2019, the Company had one customer, a related party, which represented 60% of our revenues, one customer that represented 20% of our revenues, and one customer that represented 10% of our revenues. During the nine months ended March 31, 2018, the Company had one customer, a related party that represented 69% of its revenue, and one customer that represented 13% of its revenue. No other customer represented more than 10% of our revenues during the nine months ended March 31, 2019 and 2018.
Segments	Segments The Company operates in one segment, the mobile financial banking industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Nature of Business and Summar_3

Nature of Business and Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Summary of securities excluded from EPS calculation	As of March 31, 2019 2018 Series H Preferred Stock 10,000 10,000 Convertible Notes Payable 20,496,700 19,017,287 Options 3,650,000 2,500,000 Total 24,156,700 21,527,287

Convertible Notes and Notes P_2

Convertible Notes and Notes Payable (Tables)	9 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Convertible notes and notes payable - in default	March 31, 2019 June 30, 2018 (a) Convertible notes (includes $182,506 of convertible notes in default) $ 221,672 $ 214,576 (b) Notes payable-in default 400,793 387,684 (c) Notes payable 10,014 — Total notes-third parties $ 632,479 $ 602,260
Convertible notes and notes payable- related party	March 31, 2019 June 30, 2018 (a) Convertible notes-The Matthews Group $ 1,425,661 $ 1,344,782 (b) Notes payable-The Matthews Group 1,748,283 1,384,088 (c) Convertible notes-other related-in default 276,229 265,729 Total notes-related party $ 3,450,173 $ 2,994,599

Stock Options (Tables)

Stock Options (Tables)	9 Months Ended
	Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock Options	Number of Shares Weighted - Average Exercise Price Outstanding at June 30, 2018 2,500,000 $ 0.08 Granted 1,150,000 0.03 Forfeited — $ — Outstanding at March 31, 2019 3,650,000 $ 0.06 Exercisable at March 31, 2019 2,787,500 $ 0.07
Additional information regarding outstanding options	Options Outstanding at March 31, 2019 Options Exercisable at March 31, 2019 Range of Exercise Number of Shares Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Exercise Price $ 0.03 1,150,000 5.73 $ 0.03 287,500 $ 0.03 $ 0.08 2,500,000 0.86 $ 0.08 2,500,000 $ 0.08 3,650,000 2,787,500

Summary of securities excluded

Summary of securities excluded from EPS calculation (Details) - shares	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accounting Policies [Abstract]
Series H Preferred Stock	10,000	10,000
Convertible Notes Payable	20,496,700	19,017,287
Options	3,650,000	2,500,000
Total	24,156,700	21,527,287

Nature of Business and Summar_4

Nature of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Loss from Operations	$ (139,411)	$ (127,212)	$ (640,101)	$ (333,583)
Cash used in operating activities			290,591	371,974
Working capital deficit	4,940,396		4,940,396
Stockholders' deficiency	(5,095,396)	$ (4,562,989)	(5,095,396)	$ (4,562,989)	$ (4,461,189)	$ (4,885,760)	$ (4,567,979)	$ (4,185,674)
Notes payable, delinquent	$ 787,173		$ 787,173
Customer 1
Sales percentage from major customers			60.00%	69.00%
Customer 2
Sales percentage from major customers			20.00%	13.00%
Customer 3
Sales percentage from major customers			10.00%

Convertible Notes and Notes P_3

Convertible Notes and Notes Payable - Convertible notes and notes payable in default (Details) - USD ($)		Mar. 31, 2019	Jun. 30, 2018
Debt Disclosure [Abstract]
Convertible notes payable - in default	[1]	$ 219,307	$ 214,576
Notes payable - in default	[2]	396,423	387,684
Notes payable	[3]	10,014
Total notes - third parties		$ 632,479	$ 602,260
[1]	(a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand.
[2]	(b) The notes are either secured by the Companys intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default.
[3]	(c) The note is dated March 18, 2019 and is unsecured, bears interest at 4.0% per annum, and is due on March 17, 2020.

Convertible Notes and Notes P_4

Convertible Notes and Notes Payable - Convertible notes and notes payable related party (Details) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Notes Payable Related Party	$ 3,450,173	$ 2,994,599
The Matthews Group
Convertible Notes, Related Party	1,425,661	1,344,782
Notes Payable Related Party	1,748,283	1,384,088
Other
Convertible Notes, Related Party	$ 276,229	$ 265,729

Convertible Notes and Notes P_5

Convertible Notes and Notes Payable (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2019	Mar. 18, 2019	Jun. 30, 2018	Mar. 31, 2018
Notes Payable Related Party	$ 3,450,173		$ 2,994,599
The Matthews Group
Accrued interest	80,879
Interest rate				10.00%
Convertible Notes Payable (In Default)
Conversion price			$ 0.30
Notes payable	221,672		$ 214,576
Accrued interest	7,096
Notes in Default	182,506
Balance due on demand	$ 39,166
Shares issued upon conversion	608,354
Notes Payable (In Default)
Notes payable	$ 400,793		387,684
Accrued interest	$ 13,109
Notes Payable (In Default) | Minimum
Interest rate	8.00%
Notes Payable (In Default) | Maximum
Interest rate	30.00%
Secured Interest Bearing Notes
Notes in Default	$ 361,509
Unsecured Interest Bearing Notes
Notes in Default	39,284
Unsecured Interest Bearing Notes (2)
Notes payable	10,014	$ 10,000
Accrued interest	$ 14
The Matthews Group
Conversion price	$ 0.08
Shares issued upon conversion	17,820,768
Interest rate	10.00%
Convertible Notes, Related Party	$ 1,425,661		1,344,782
Notes Payable Related Party	1,748,283		$ 1,384,088
Notes Payable | The Matthews Group
Accrued interest	110,426
Notes issued	253,769
Other
Conversion price			$ 0.08
Accrued interest	10,500
Notes in Default	201,624
Balance due on demand	72,355
Convertible Notes, Related Party	$ 276,229		$ 265,729
$0.30 per share
Conversion price	$ 0.30
Shares issued upon conversion	679,581
Convertible Notes, Related Party	$ 203,874
$0.10 per share
Conversion price	$ 0.10
Shares issued upon conversion	217,062
Convertible Notes, Related Party	$ 21,706
$0.08 per share
Conversion price	$ 0.08
Shares issued upon conversion	633,098
Convertible Notes, Related Party	$ 50,649

Stockholders Deficiency (Detail

Stockholders Deficiency (Details Narrative) - USD ($)	Mar. 31, 2019	Jun. 30, 2018
Equity [Abstract]
Common stock to be issued	145,000	145,000
Common stock to be issued, value	$ 12,500	$ 12,500

Stock Options - Summary of Stoc

Stock Options - Summary of Stock Options (Details)	9 Months Ended
	Mar. 31, 2019$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Beginning number of shares; outstanding | shares	2,500,000
Beginning weighted-average exercise price; outstanding | $ / shares	$ .08
Options Granted | shares	1,150,000
Options granted, weighted average exercise price | $ / shares	$ 0.03
Options Forfeited | shares
Options Forfeited, weighted average exercise price | $ / shares
Ending number of shares; outstanding | shares	3,650,000
Ending weighted-average exercise price; outstanding | $ / shares	$ 0.06
Number of Shares; exercisable | shares	2,787,500
Weighted-average exercise price; exercisable | $ / shares	$ 0.07

Stock Options - Additional info

Stock Options - Additional information regarding outstanding options (Details)	9 Months Ended
	Mar. 31, 2019$ / sharesshares
Options outstanding, shares	3,650,000
Options excercisable	2,787,500
$0.03 per share
Options outstanding, shares	1,150,000
Weighted average remaining contractual life	5 years 8 months
Weighted average exercise price | $ / shares	$ 0.03
Options excercisable
Options exercisable, weighted average exercise price | $ / shares	$ 0.03
$0.08 per share
Options outstanding, shares	2,500,000
Weighted average remaining contractual life	10 months
Weighted average exercise price | $ / shares	$ 0.08
Options excercisable	2,500,000
Options exercisable, weighted average exercise price | $ / shares	$ 0.08

Stock Options (Details Narrativ

Stock Options (Details Narrative)	9 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options granted | shares	1,150,000
Fair value of stock options granted	$ 21,285
Options granted, price per share | $ / shares	$ 0.03
Options granted, expected life	2 years
Options granted, volatility	121.00%
Options granted, dividend rate	0.00%
Options granted, discount rate	2.63%
Compensation expense	$ 5,894
Outstanding unvested options	15,391
Options outstanding intrinsic value	34,500
Options exercisable intrinsic value	$ 8,625

Related Party Transactions (Det

Related Party Transactions (Details Narrative)	3 Months Ended		9 Months Ended		20 Months Ended	25 Months Ended
	Mar. 31, 2019USD ($)	Mar. 31, 2018USD ($)	Mar. 31, 2019USD ($)	Mar. 31, 2018USD ($)	May 31, 2017	Jun. 30, 2019	Jun. 30, 2018USD ($)
Accounts payable, related party	$ 96,110		$ 96,110				$ 96,110
Managament fee, percent of revenue					0.20	0.35
Other revenue, related party	44,536	$ 137,052	35,034	$ 208,527
Notes Payable Related Party	3,450,173		3,450,173				2,994,599
The Matthews Group
Notes Payable Related Party	$ 1,748,283		$ 1,748,283				1,384,088
Unsecured related party note, interest	10.00%		10.00%
Unsecured related party note	$ 192,590		$ 192,590
The Matthews Group
Other revenue, related party			253,769	$ 359,044
Unsecured related party note, interest		10.00%		10.00%
Unsecured related party note		$ 241,590		$ 241,590
Van Tran
Advances due to related party	$ 96,110		96,110				$ 96,110
Rental Payments			$ 38,250	$ 38,250
Larry Johanns
Ownership of TMG	50.00%		50.00%
Van Tran
Ownership of TMG	50.00%		50.00%

Legal Proceedings (Details Narr

Legal Proceedings (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2017	Nov. 13, 2017	Sep. 21, 2016
Commitments and Contingencies
Promissory Note		$ 100,000
Settlement amount		$ 162,990
Interest		8.00%
Convertible note payable relinquished			$ 364,686
Shares to be returned			500,000
Gain on settlement of note payable to former officer	$ 364,686