<PAGE>
                                       

                                UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 
    OF 1934

For the quarterly period ended    March 31, 1997
                              ------------------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the Transition period from                     to 
                              ---------------------   ------------------------

Commission file number   0-28484
                       -------------------------------------------------------

                               QualMark Corporation
------------------------------------------------------------------------------
                    (Exact name of small business issuer as                  
                        specified in its charter)

           Colorado                                    84-1232688
-------------------------------         --------------------------------------
(State or other jurisdiction of            (I.R.S Employer Identification No.)
incorporation or organization)


    1329 West 121st Avenue, Denver, CO                        80234
-------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)

(Issuer's telephone number)     (303) 254-8800
                           ---------------------------------------------------

------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
 report)


     Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 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.
                                                           [X] Yes  [ ] No

              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to 
be filed by Section 12, 13 or 15(d) of the Exchange Act after the 
distribution of securities under a plan confirmed by a court.
                                                           [ ] Yes  [ ] No

                   APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes 
of common equity, as of latest practicable date:

 The number of shares of par value common stock at April 21, 1997 is 3,330,484.
-------------------------------------------------------------------------------
     Transitional Small Business Disclosure Format (check one): [ ] Yes   [X] No



<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              QUALMARK CORPORATION
                                  BALANCE SHEET
                      (AMOUNTS IN THOUSANDS, EXCEPT SHARES)
<TABLE>
                                                       MARCH 31, 1997
                                                        (UNAUDITED)       DEC. 31, 1996
                                                       --------------     -------------
                    ASSETS
<S>                                                    <C>                <C>
Cash and equivalents                                          $47              $411
Short term investments                                      1,032             1,911
Trade accounts receivable, net of allowance for                          
    doubtful accounts of $21 at March 31, 1997                           
    and December 31, 1996                                   1,728             1,246
Inventories                                                   659               536
Other current assets                                          108               120
                                                       ----------        ----------
    Total current assets                                    3,574             4,224
                                                                         
Property and equipment, net                                 1,368             1,073
Patents, net of accumulated amortization of $258                         
    and $254, respectively                                     24                28
Other assets                                                   69               116
                                                       ----------        ----------
                                                                         
Total assets                                               $5,035            $5,441
                                                       ----------        ----------
                                                       ----------        ----------
                                                                         
         LIABILITIES & SHAREHOLDERS' EQUITY                              
Accounts payable                                             $810              $699
Customer deposits and deferred revenue                         53                47
Accrued expenses                                              505               984
Current portion of capital lease obligations                   31                31
                                                       ----------        ----------
    Total current liabilities                               1,399             1,761
                                                                         
Noncurrent portion of capital lease obligations                 8                18
                                                                         
Shareholders' Equity:                                                    
Common stock; no par value; 15,000,000                                   
    shares authorized;  3,330,484 shares issued                          
    and outstanding at March 31, 1997 and                                
    December 31, 1996                                       6,136             6,131

Accumulated deficit                                       (2,508)           (2,469)
                                                       ----------        ----------
    Total shareholders' equity                              3,628             3,662
                                                       ----------        ----------
                                                                       
Total liabilities and shareholders' equity                 $5,035            $5,441
                                                       ----------        ----------
                                                       ----------        ----------
</TABLE>

    The accompanying notes are an integral part of the financial statements.

<PAGE>

                                   QUALMARK CORPORATION
                                  STATEMENT OF OPERATIONS
                 (UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                             For the three       For the three
                                              months ended        months ended
                                             March 31, 1997      March 31, 1996
                                             --------------      --------------

Net revenue                                          $1,861                $973
Cost of revenue                                       1,160                 579
                                                     ------               -----
    Gross profit                                        701                 394

Selling, general and administrative expenses            711                 488
Research and development expenses                        54                  54
                                                     ------               -----
    Loss from operations                                (64)               (148)

Other income (expense):
    Interest expense                                      0                 (74)
    Interest income                                      25                   0
    Other income                                          0                   3
                                                     ------               -----
Net loss                                               ($39)              ($219)
                                                     ------               -----
                                                     ------               -----


Net loss per share                                   ($0.01)             ($0.12)

Weighted average number of common shares              3,330               1,866


    The accompanying notes are an integral part of the financial statements.


24-Apr-97


<PAGE>

                              QUALMARK CORPORATION
                             STATEMENT OF CASH FLOWS
                        (UNAUDITED, AMOUNTS IN THOUSANDS)

<TABLE>
                                                               For the three      For the three
                                                                months ended       months ended
                                                               March 31, 1997     March 31, 1996  
                                                               --------------     -------------- 
<S>                                                             <C>                <C>
Cash Flows From Operating Activities:
Net loss                                                              $   (39)           $ (219)
Adjustments to reconcile net loss to net cash from operating
  activities:
    Depreciation                                                           93                35
    Patent amortization                                                     4                 5
    Discount accretion                                                      0                42
    Warrant and stock option expense for warrants and options
      issued below fair market value                                        6                 6
Change in assets and liabilities:
    Accounts receivable                                                  (482)             (335)
    Inventories                                                          (123)              (14)
    Other assets                                                           59              (176)
    Accounts payable and accrued expenses                                (368)              303
    Customer deposits and deferred revenue                                  6               318
                                                                      -------            ------ 
        Net cash used in operating activities                            (844)              (35)
                                                                      -------            ------ 
                                                                      -------            ------ 
Cash Flows From Investing Activities:
Acquisition of property and equipment                                    (388)             (139)
Acquisition of patents                                                      0               (17)
Purchase of short term investments                                       (222)                0
Proceeds on sale/redemption of short term investments                   1,101                 0
                                                                      -------            ------ 
        Net cash provided (used) by investing activities                  491              (156)

Cash Flow From Financing Activities:
Principal payments on capital lease obligations                           (11)              (15)
                                                                      -------            ------ 
        Net cash used by financing activities                             (11)              (15)
                                                                      -------            ------ 
Net decrease in cash                                                     (364)             (206)
Cash at beginning of period                                               411               252
                                                                      -------            ------ 
Cash at end of period                                                 $    47            $   46
                                                                      -------            ------ 
                                                                      -------            ------ 
NONCASH FINANCING ACTIVITIES
  Conversion of debt to common stock                                  $     0            $  250
  Acquisition of equipment under capital lease                              0                36
SUPPLEMENTAL DISCLOSURE
  Interest paid                                                       $     2            $   12
</TABLE>


      The accompanying notes are an integral part of the financial statements.

<PAGE>
                              QUALMARK CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


QualMark Corporation (the Company), was founded in 1991 and is a manufacturer of
physical stress systems. These systems rapidly and efficiently expose product
design and manufacturing related failures on its customers products, thereby
providing manufacturers the necessary information to improve product quality. 
The Company also operates a nation wide network of test centers that its
customers may use as an alternative, or in addition, to purchasing its systems.


NOTE 1 - Financial Presentation

These financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1996 and notes thereto.

The interim financial data as of March 31, 1997 and for the three months ended
March 31, 1997 and 1996 is unaudited; however, in the opinion of management of
the Company, the interim data includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the results
for the interim periods presented.  Results for the three months are not
necessarily indicative of results for the remainder of 1997.

Certain amounts in the prior year's Statement of Operations have been
reclassified to conform to the 1997 presentation.  


NOTE 2 - Inventories

Inventories consist of the following (in thousands):

                                     3/31/97      
                                   (unaudited)     12/31/96 
                                   -----------     --------
     Raw materials                      $429           $334
     Work in process                     113              9
     Finished goods                      117            193
                                        ----           ----
                                        $659           $536
                                        ----           ----
                                        ----           ----

NOTE 3 - Net Loss Per Share

Net loss per share is computed using the weighted average number of common
shares outstanding during each period, including common equivalent shares
outstanding.  Common equivalent shares consist of stock options and warrants
calculated using the treasury stock method, when dilutive.

In February 1997, the Financial Accounting Standards Board issued  Statement of
Accounting Standards No. 128, "Earnings per Share" 

<PAGE>

(FAS) 128.  FAS 128 changes the computation, presentation and disclosure 
requirements of earnings (loss) per share that has previously been followed by
the Company.  FAS 128 is effective for years ending after December 15, 1997 
and early adoption is not permissible. If the provisions of FAS 128 were 
adopted for the quarters ending March 31, 1997 and 1996, the Company's basic 
loss per share would have been $0.01 and $.12, respectively. 

NOTE 4 - Litigation
     
On March 22, 1996 Screening Systems, Inc. ("SSI") filed a patent infringement
action in the United States District Court for the Central District of
California, Southern Division, against the Company, alleging that the Company
has infringed U.S. Patent No. 4,181,026.  SSI amended its complaint in September
1996 to add claims of infringement  of U.S. Patents Nos. 4,181,025 and
4,181,028, and for contributory and inducing infringement.  Each of the patents-
in-suit is owned by Hughes Electronics Company ("Hughes") and licensed to SSI. 
Trial of this matter was originally set for March 25, 1997.

In October 1996, The Company filed a motion to dismiss the action on the basis
that SSI did not alone have a standing to pursue the action pursuant to the
terms of its License Agreement with Hughes.  In November 1996, the Court ruled
on the Company's motion by ordering that Hughes be joined as an interested
party.  Because Hughes declined to join the action as plaintiff, SSI joined
Hughes as a defendant in its November 22, 1996 second amended complaint.

With limited exception, the parties completed discovery on January 10, 1997.  On
February 3, 1997, the Company filed motions for summary judgement of non-
infringement on each of the three patents in suit.  SSI filed a motion for
summary judgment  with respect to U.S. patent No. 4,181,028 and other motions
addressing the Company's defenses.  On February 6, 1997, Judge Mclaughlin
vacated all pending dates, including the March 25, 1997 trial date, and referred
the motions for summary judgment to Magistrate Judge Elgin Edwards for
determination.

Magistrate Judge Edwards set a hearing known as a "Markman hearing" to determine
the scope and meaning of the relevant claims and terms of the patents-in-suit
before ruling on any motions for summary judgment of non-infringement.  The
Markman hearing began on April 14, 1997 and is expected to be concluded in the
second quarter of 1997.  After the Markman hearing, the Company will evaluate
the outcome of the hearing and may renew its motions for summary judgment of
non-infringement on each of the patents-in-suit.  The Court has not set a new
trial and no trial date is expected to be set until after the Court has
conducted the Markman hearing and ruled on any subsequent summary judgment
motions.   

<PAGE>

Item 2.

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


Forward-Looking Statements

The statements contained in this report which are not historical in nature are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth or implied
by forward-looking statements, including but not limited to the risk of an
unfavorable outcome in the SSI litigation, variability in order flow and
operating results, the ability of the Company to find and retain qualified
personnel to staff its manufacturing and marketing operations and existing and
anticipated test centers, and the risk that the demand for the Company's systems
will not continue to grow.


Results of Operations

Revenue

Net revenue increased $888,000 or 91% for the three months ended March 31, 1997,
as compared with the three months ended March 31, 1996, from $973,000 to
$1,861,000. 

System sales increased from $690,000 to $1,357,000 or 97% as unit shipments
increased from six to eleven systems.  Test center revenue increased from
$282,000 to $505,000, or 79%.  The Company operated seven test centers during
the period versus four during the same period in 1996.  The Company's seventh
test center was opened in Huntington Beach, California on March 1, 1997.

The Company's quarterly operating results could be subject to fluctuations for a
variety of reasons.  The Company operates with a small backlog relative to its
revenue; thus most of its sales in each quarter result from orders received in
the current or prior quarter.  In addition, because prices for the Company's
products are relatively substantial, a significant portion of net sales for each
quarter is attributable to a relatively small number of units.

Gross Margin

The gross margin for the three months ended March 31, 1997 was 37.7%.  This
compares to a gross margin of 40.5% for the three months ended March 31, 1996. 
The decrease in the gross margin for the three months ended March 31, 1997 is
partly due to the addition of the Huntington Beach, California test center.  The
opening of new test centers has tended to put pressure on the Company's gross
margin during the first six to nine months after each opening until a local
customer base is established and the test center achieves expected
profitability.  In the three months ended March 31, 1997, 

<PAGE>

there were three test centers less than nine months old: Farmington Hills, 
Michigan, Morrisville, North Carolina and Huntington Beach, California.  

Operating Expense

General and administrative expenses increased from $331,000 to $382,000 for the
three months ended March 31, 1997 compared to the same three month period in
1996.  The increase reflects additional costs for the test center
administration,  royalty payments and the costs of being a public entity. 

Sales and marketing expenses increased $172,000 from $157,000 for the three
months ended March 31, 1996 to $329,000 for the three months ended March 31,
1997.  This increase is primarily due to increases in department headcount and
associated expenses over the same three month period in 1996. 

R & D costs remained steady at $54,000 for each of the comparable periods.  

Interest expense in the prior year's three month period ending March 31, 1996
was $74,000.  That amount consisted of $42,000 of discount accretion expense
(non-cash) for warrants issued with notes to shareholders and others.  Following
the closing of the Company's initial public offering on April 11, 1996, all
notes and short term debt were retired.   Interest income for the three months
ended March 31, 1997 was $25,000, earned primarily from short term investments.

Liquidity and Capital Resources

During the first three months of 1997 the Company's operations used $844,000 of
cash in operating activities, invested $388,000 for equipment, received 879,000
in net proceeds from short term investments and paid $11,000 in lease payments. 
Together, these activities resulted in a cash decrease of approximately $364,000
to a quarter ending balance of $47,000.  The Company also has short term
investments of $1,032,000.  Together, cash and short term investments total
$1,079,000.

The Company expects to meet long term liquidity requirements through cash flows
generated by operations and existing cash balances.  The Company is dependent,
however, on its ability to maintain and grow its systems and test center
businesses in order to generate adequate operating cash flows.  


<PAGE>

                            PART II OTHER INFORMATION

Item 1    Legal Proceedings

     See Note 4 to Financial Statements.   



Item 6    Exhibits and Reports on Form 8-K.


     (a)  Exhibits - See Index to Exhibits

     (b) Reports on Form 8-K during the quarter ended March 31, 
          1997 - none.




                                   SIGNATURES

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

                                       QualMark Corporation



Date: April 25, 1997                   By: /s/ W. PRESTON WILSON
      --------------                       -----------------------------------
                                           W. Preston Wilson
                                           President, Chief Executive Officer


Date: April 25, 1997                       /s/ VERNON W. SETTLE
      --------------                       -----------------------------------
                                           Vernon W. Settle
                                           VP, Finance & Administration
                                           Principal Accounting Officer


<PAGE>


                                INDEX TO EXHIBITS

     Exhibit
     Number    Description
     -------   -----------

      4.1      Form of the Certificate for Shares of Common
               Stock.(1)

      4.6      Form of Warrant issued to holders of 10% secured
               promissory notes.(1)

     10.1      QualMark Corporation 1993 Incentive Stock Plan.(1) 

     10.2      QualMark Corporation 1996 Incentive Stock Plan.(1)

     10.3      Agreement dated March 31, 1993 by and between 
               QualMark Corporation and W. Preston Wilson.(1)

     10.4      Agreement dated August 15, 1994 by and between
               QualMark Corporation and J. Wayne Farlow.(1)

     10.5      Agreement dated September 30, 1995 by and between
               QualMark Corporation and Gregg K. Hobbs.(1)

     10.8      Addendum to Agreement dated December 21, 1995 by and
               between the Company and Gregg K. Hobbs.(1)

(1)Similarly denoted as an exhibit to registration statement 333-1454-D and
incorporated herein by reference.