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

                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 1997

                                       OR

[ ]  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: 0-23952

                                   AVERT, INC.
        (Exact name of small business issuer as specified in its charter)

          Colorado                                     84-1028716
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization

                      301 Remington, Fort Collins, CO 80524
                    (Address of principal executive offices)

                                  970/484-7722
              (Registrant's telephone number, including area code)

                                    No Change
                     (Former name, former address and former
                   fiscal year, if changed from last report).

     Check whether the registrant (1) 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 issuer was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                   [X] Yes       [  ] No

     As of August 8, 1997 the issuer had 3,488,125  shares of Common  Stock,  no
par value, outstanding.

                 Transitional Small Business Disclosure Format.
                   [  ] Yes      [X] No
<PAGE>

Form 10-QSB
Quarter Ended June 30, 1997


                                      INDEX


                                                                           PAGE

PART I - FINANCIAL INFORMATION

      ITEM 1.  Financial statements

               Unaudited balance sheets................................      3

               Unaudited statements of income..........................      4

               Unaudited statements of cash flows......................      5

               Notes to unaudited financial statements.................      6

      ITEM 2.  Management's Discussion and Analysis or
              Plan of Operations.......................................      7


PART II - OTHER INFORMATION

      ITEMS 1, 2, 3,  and 5  Not applicable............................

      ITEM 4...........................................................      12

      ITEM 6...........................................................      12

      Signatures.......................................................      13



                                       2



<PAGE>

<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION
                                   AVERT, INC.
                                 BALANCE SHEETS

                                     ASSETS

                                                                                         JUNE 30,      DECEMBER 31,
                                                                                           1997           1996
                                                                                       -----------    -------------
                                                                                       (unaudited)
<S>                                                                                    <C>           <C> 
Current assets:
         Cash and cash equivalents .................................................   $   693,600   $   360,300
         Marketable securities .....................................................     5,720,700     5,576,700
         Accounts receivable, net of allowance .....................................     1,150,800       787,900
         Prepaid expenses and other ................................................       176,300       159,000
                                                                                       -----------   -----------
                  Total current assets .............................................   $ 7,741,400     6,883,900

Property and equipment, net ........................................................     3,242,500     2,510,900
                                                                                       -----------   -----------

Total assets .......................................................................   $10,983,900   $ 9,394,800
                                                                                       ===========   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
         Accounts payable ..........................................................   $   580,000   $   464,400
         Accrued expenses ..........................................................       540,400       224,600
         Deferred revenue ..........................................................       114,600        20,000
                                                                                       -----------   -----------
                  Total current liabilities ........................................     1,235,000       709,000

Shareholders' equity:
         Preferred shares, no par value; authorized
           1,000,000 shares; none outstanding ......................................          --            --
         Common stock, no par value; authorized
           9,000,000 shares; 3,488,125, and 3,446,988
           shares issued and outstanding respectively ..............................     5,276,300     4,745,500
         Retained earnings .........................................................     4,472,600     3,940,300
                                                                                       -----------   -----------
                  Total shareholders' equity .......................................     9,748,900     8,685,800
                                                                                       -----------   -----------

Total liabilities and shareholders' equity .........................................   $10,983,900   $ 9,394,800
                                                                                       ===========   ===========
</TABLE>

               See accompanying notes to the financial statements.

                                       3

<PAGE>

<TABLE>
<CAPTION>
                                   AVERT, INC.
                              STATEMENTS OF INCOME
                                   (unaudited)

                                                                    Three Months Ended                     Six Months Ended
                                                                         June 30,                               June 30,

                                                                   1997              1996                1997              1996
                                                                   ----              ----                ----              ----
<S>                                                            <C>                <C>                <C>                <C>        
Net revenues:
         Search and product fees .......................       $ 2,343,400        $ 1,861,700        $ 4,361,800        $ 3,412,000
         Interest and other income .....................           115,000            106,100            192,600            208,100
                                                               -----------        -----------        -----------        -----------

                                                                 2,458,400          1,967,800        $ 4,554,400        $ 3,620,100
Expenses:
         Search and product costs ......................         1,051,000            788,000          1,946,000          1,492,400
         Marketing .....................................           405,200            330,900            736,400            610,100
         General and administrative ....................           325,300            280,300            618,800            515,400
         Software development ..........................            96,600             83,900            199,800            176,900
         Depreciation and amortization .................           113,200             47,700            177,800             80,500
                                                               -----------        -----------        -----------        -----------

                                                                 1,991,300          1,530,800          3,678,800        $ 2,875,300
                                                               -----------        -----------        -----------        -----------

Income before income taxes .............................           467,100            437,000            875,600            744,800

         Income tax expense ............................          (183,500)          (166,500)          (343,300)          (283,300)
                                                               -----------        -----------        -----------        -----------

Net income .............................................       $   283,600        $   270,500        $   532,300            461,500
                                                               ===========        ===========        ===========        ===========
Net income per common share ............................       $       .08        $       .08        $       .15        $       .13
                                                               ===========        ===========        ===========        ===========
Weighted average common
         shares outstanding ............................         3,493,500          3,418,500          3,466,300          3,427,800
                                                               ===========        ===========        ===========        ===========
</TABLE>




               See accompanying notes to the financial statements.

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                   AVERT, INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                                 SIX MONTHS ENDED JUNE 30
                                                                   1997            1996
                                                                   ----            ----
<S>                                                              <C>          <C>      
Cash Flows From Operating Activities:
    Net income ...............................................   $ 532,300    $ 461,500
    Adjustments to reconcile net income to net cash
      provided by operating activities:
         Depreciation and amortization .......................     177,800       80,500
         Bad debt expense ....................................       8,100       15,000
         (Increase)/decrease in marketable securities and
                  other gains ................................    (144,000)        --
         Changes in operating assets and liabilities:
              Accounts receivable ............................    (371,000)    (333,800)
              Prepaid expenses and other current assets ......     (17,300)      87,300
              Accounts payable ...............................     115,600      (97,000)
              Accrued expenses ...............................     346,200      (16,800)
              Income taxes payable ...........................     (30,400)       8,200
              Deferred revenue and deposits ..................      94,600       (3,000)
                                                                 ---------    ---------

         Net cash provided by operating activities ...........     711,900      201,900

Cash Flows from Investing Activities:
     Additions to furniture and equipment ....................    (909,400)    (720,100)
     Proceeds from sale of furniture and equipment ...........        --        542,700
                                                                 ---------    ---------

           Net cash used in investing activities .............    (909,400)    (177,400)
                                                                 ---------    ---------

Cash Flows from Financing Activities:
         Purchase of Treasury Stock ..........................        --       (110,400)
         Warrants exercised ..................................     530,800         --
                                                                 ---------     --------

           Net cash provided by (used in) financing activities     530,800     (110,400)
                                                                 ---------     --------

Increase/(Decrease) in Cash and Cash Equivalents .............     333,300      (85,900)

Cash and Cash Equivalents, beginning of period ...............     360,300      159,700
                                                                 ---------    ---------

Cash and Cash Equivalents, end of period .....................   $ 693,600    $  73,800
                                                                 =========    =========
</TABLE>

               See accompanying notes to the financial statements.

                                       5

<PAGE>

                                   AVERT, INC.
                          NOTES TO FINANCIAL STATEMENTS


     The financial information  contained herein is unaudited,  but includes all
adjustments (consisting of only normal recurring accruals) which, in the opinion
of management,  are necessary to present fairly the information  set forth.  The
financial  statements  should be read in conjunction with the Notes to Financial
Statements which are included in the Annual Report on Form 10-KSB of the Company
for the year ended December 31, 1996.

     The results for interim periods are not  necessarily  indicative of results
to be expected for the fiscal year of the Company ending  December 31, 1997. The
Company   believes  that  the  three  month  report  filed  on  Form  10-QSB  is
representative of its financial position, its results of operations and its cash
flows as of and for the periods ended June 30, 1997 and 1996 covered thereby.

     On June 22, 1994, the Company  completed an initial public offering ("IPO")
of 1,000,000 units  ("Units"),  each consisting of one share of Common Stock and
one Redeemable Warrant.  The Units separated on December 7, 1994, and the Common
Stock and the Redeemable  Warrants began trading separately as of that date. Two
Redeemable  Warrants entitle the holder to purchase one share of Common Stock at
a price of $6.50 per share  (subject to  adjustment).  The  expiration  date was
extended to April 30,  1997.  Net proceeds  from the IPO totalled  approximately
$4,382,300.  As of June 30, 1997 $530,800 had been  received in connection  with
the exercised warrants (88,125 shares and the balance of the warrants expired).






                                       6
<PAGE>

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations

Comparison of quarters ended June 30, 1997 and June 30, 1996

     Total net revenues  increased  from  $1,967,800  for the three month period
ended June 30, 1996 to $2,458,400 for the comparable  three month period in 1997
or  approximately  24.9%.  The breakdown of net  revenues,  exclusive of product
discounts and other miscellaneous income items, is as follows:

<TABLE>
<CAPTION>
                                                  Three Months Ended             Three Months Ended
                                                     June 30, 1997                  June 30, 1996                Percent of
                                              ------------------------        ------------------------            Increase
                                               Revenues        % total        Revenues         % total           (Decrease)
                                               --------        -------        --------         -------           ----------
<S>                                          <C>                 <C>        <C>                  <C>              <C> 
Products:
  Workers compensation histories ........    $  299,600          12.2%      $  326,500           16.6%            (8.2)%
  Criminal history reports ..............    $1,253,200          51.0%      $1,027,300           52.2%            22.0%
  Previous employment reports/
     credit reports .....................    $  293,600          11.9%      $  222,800           11.3%            31.8%
  Motor vehicle driving records .........    $  260,900          10.6%      $  230,300           11.7%            13.3%
  Other products ........................    $  118,000           4.8%      $  122,000            6.2%            (3.3)%
Services ................................    $  118,800           4.8%      $        0            0.0%           100.0%

Interest income .........................    $   77,200           3.1%      $   78,100            4.0%            (1.2)%

         NET REVENUES ...................    $2,458,400                     $1,967,800                            24.9%
</TABLE>

     Moderate growth in sales of all of the Company's  products continued during
the second quarter of 1997. Growth of approximately 22% occurred in the criminal
history reports area. In total dollars,  criminal  history reports  continues to
contribute the most net revenues, representing $1,253,200 in net revenues in the
three month period ended June 30, 1997,  as compared to  $1,027,300 in the three
month period ended June 30, 1996.  The  criminal  history  reports  product line
accounted  for  approximately  51% of total net  revenues in the second  quarter
1997, and approximately  52.2% of total net revenues in the second quarter 1996.
The  Company  believes  there  continues  to  be a  nationwide  trend  to  check
prospective  employees'  criminal records and it continues to focus on obtaining
the quickest, most accurate data available.

     Workers' compensation histories, though continuing to be our second largest
product line in terms of revenues,  also continues to decline as a percentage of
net revenues.  In second quarter 1997, workers' compensation reports represented
12.2% of net  revenues,  or $299,600  as  compared  to 16.6% of net  revenues in
second  quarter  1996,  or $326,500.  The Company  believes it will  continue to
decrease as a percentage of total net revenues, though still a viable product.

     The largest product growth of 31.8% continues to be in the area of Previous
Employment/Credit.  This product represented $293,600 and approximately 11.9% of
total net  revenues  in the second  quarter  1997,  compared  to $222,800 in the
second quarter 1996 and approximately 11.3% of total net revenues. Both products
making  up this  category  are quick  turnaround  products,  which  the  Company
believes employers now consider more important than in the past.

     Net  revenues  generated  in the  area of  motor  vehicle  driving  records
increased  approximately 13.3%, from approximately  $230,300 in the second three
months of 1996,  representing  11.7% of total  net  revenues,  to  approximately
$260,900 in the second  three  months of 1997,  representing  10.6% of total net
revenues.

     Growth of  approximately  20.4%  occurred in the Name Link product  growing
from $47,000 in the second  quarter 1996 to $56,600 in the second  quarter 1997.
Overall,  the  "other  products"  category  experienced  a  slight  decrease  of
approximately   3.3%  in  revenues,   which  consists  of   education/credential
verifications, employment applications and first checks.

                                       7
<PAGE>

     Service sales, which have been added in the chart above,  increased from $0
in second  quarter 1996 to $118,800 in second  quarter  1997. A large portion is
attributable to the implementation of the Avert Advantage program in July, 1996,
which  accounted for $37,600 in revenues for the three month period in 1997, and
was not in effect at all in the three  month  period  in 1996.  In  addition,  a
variety  of  services   that  were  not  offered   until  July,   1996  produced
approximately  $54,000 in second  quarter 1997.  There was also strong growth in
second  quarter 1997 over second  quarter 1996 for two services  Avert  provides
which allow for customization of reports.

     Income before income taxes  increased  from $437,000 in second quarter 1996
to  $467,100 in second  quarter  1997,  or  approximately  6.9% and  represented
approximately  19.0% of total net  revenues in 1997  compared  to  approximately
22.2% in 1996. The change resulted from increases in two expense  categories and
decreases in three.

     Total expenses  increased from  $1,530,800 for the three month period ended
June 30, 1996 to $1,991,300 for the comparable  period in 1997 or  approximately
30.1% A breakdown in expenses is as follows:

<TABLE>
<CAPTION>
                                                      Three Months Ended           Three Months Ended          Increase (Decrease)
                                                        June 30, 1997                 June 30, 1996              % of Revenues
                                                   ------------------------       ---------------------------  ------------------
                                                   Expenses    % of Revenue       Expenses       % of Revenue    1997 over 1996
                                                   --------    ------------       --------       ------------    --------------

<S>                                                 <C>             <C>         <C>                  <C>               <C> 
Search and product ........................         $1,051,000      42.8%       $  788,000           40.0%             2.8%
Marketing .................................            405,200      16.5           330,900           16.8             (0.3)
General and administrative ................            325,300      13.2           280,300           14.3             (1.1)
Software development ......................             96,600       3.9            83,900            4.3             (0.4)
Depreciation and amortization .............            113,200       4.6            47,700            2.4              2.2
                                                    ----------      ----        ----------         ------             ----

         Expenses .........................         $1,991,300      81.0%       $1,530,800           77.8%             3.2%
                                                    ==========      =====       ==========         =======            =====
</TABLE>

     Search and product fees increased from 40% of total net revenues for second
quarter  1996 to 42.8% of total net  revenues  for  second  quarter  1997.  With
criminal history reports  representing a large portion of our product mix, there
is a continued belief that the development of existing  couriers and addition of
new  couriers and  improved  methods of  retrieval  of criminal  records has the
potential  to lower the  product  costs.  The  Company  believes  that there are
enhancements planned in these specific areas once the new software is completed,
that will positively impact turnaround and ultimately benefit customers, as well
as positively  impact  efficiencies  in this area.  See  "Liquidity  and Capital
Resources" below in this Item for further discussion.  Costs associated with the
criminal history product line represent the bulk of this expense category.

     There were  decreases  in the expense  categories  of  marketing,  software
development  and general and  administrative  when  expressed as a percentage of
total net revenues. As Avert has become more departmentalized  internally, there
have been some reclassifications  from general and administrative  categories to
the other various  departments in areas such as telephone,  office  supplies and
postage.  Detail  won't  be  provided  on these  reclassifications,  but a brief
explanation of expense category variances follow.

     There is a continued  on-going  marketing  campaign designed to target lead
generation,  marketing  communication  and market  development  for both current
customers and new customers,  via both  independent  sales  representatives  and
in-house  marketing  personnel.  This  expense  increased  from .9% of total net
revenues in the second quarter 1996 to approximately  1.3% in the second quarter
1997.  Due to a decrease in the number of trade shows Avert is attending,  there
was a decrease in trade show expenses in the second  quarter 1997 as compared to
the second  quarter  1996.  The Company  believes  that lead  generation  can be
performed more effectively using other methods.

     Though, as predicted, there have been a number of increased expenses within
software  development  resulting from the software  conversion  project in which
Avert is  currently  involved,  the overall  decrease  in  software  development
expenses as a  percentage  of total net revenues in the three month period ended
June 30, 1997 as compared to the three month  period  ended June 30,  1996.  The
Company also capitalizes certain software  development costs associated with the
further  development of its internal software system used in revenue generation.
The  majority  of  these  development  costs  are  paid to  third  parties.  See
"Liquidity and Capital Resources" below in this Item for further discussion. The
depreciation and  amortization  expenses have increased from second quarter 1996
to second  quarter  1997 as a  percentage  of total net revenues due to the fact

                                       8
<PAGE>

that  substantial  computer  hardware  purchases  were required for the computer
software  project  Avert has  undertaken.  In addition,  Phase I of the software
began depreciation in the second quarter 1997 resulting in a $41,600 increase in
software  depreciation in second quarter 1997 over second quarter 1996. Phase II
of software depreciation is expected to begin in fourth quarter 1997.

     Slight  decreases  occurred in the general and  administrative  expenses in
second quarter 1997 as compared to second quarter 1996 as a percentage of sales.
This is expected to continue as revenue increases.

     Income taxes varied  slightly for the combined  federal and state statutory
rate of approximately  38% in the second quarter 1996 and  approximately  39% in
the second  quarter 1997,  resulting in net income of $270,500 or $.08 per share
on 3,418,500 shares for the second three months ended June 30, 1996, as compared
to net income of $283,600 or $.08 per share on  3,493,500  shares for the second
three months ended June 30, 1997.


Comparison of six months ended June 30, 1997 and June 30, 1996

     Net revenues  increased from $3,620,100 for the six month period ended June
30,  1996,  to  $4,554,400  for  the  comparable  six  month  period  in 1997 or
approximately  25.8%.  The  breakdown  of net  revenues,  exclusive  of  product
discounts and other miscellaneous income items, is as follows:

<TABLE>
<CAPTION>
                                                 Six Months Ended               Six Months Ended
                                                   June 30, 1997                  June 30, 1996             Percent of
                                             ---------------------         ------------------------          Increase
                                             Revenues     % total          Revenues         % total         (Decrease)
                                             --------     -------          --------         -------         ----------
<S>                                          <C>            <C>         <C>                 <C>              <C> 
Products:
  Workers compensation histories ........    $  596,200     13.1%       $  610,200          16.9%            (2.3)%
  Criminal history reports ..............    $2,265,500     49.7%       $1,868,700          51.6%            21.2%
  Previous employment reports/ ..........    $  523,200     11.5%       $  398,900          11.0%            31.2%
     credit reports
  Motor vehicle driving records .........    $  522,400     11.5%       $  448,100          12.4%            16.6%
  Other products ........................    $  223,600      4.9%       $  256,100           7.1%           (12.7)%

Interest income .........................    $  154,400      3.4%       $  161,000           4.4%            (4.1)%

         NET REVENUES ...................    $4,554,400                 $3,620,100                            25.8%
</TABLE>

     Moderate to strong  growth in sales of most all of the  Company's  products
continued  during the first six months of 1997 with the biggest  exception being
workers' compensation reports. Although sales of workers' compensation histories
actually  decreased  approximately 2.3% from the six month period ended June 30,
1996 to the same six  month  period  in 1997,  it is still  the  second  largest
product line  representing  $596,200 for six months of 1997 and $610,200 for six
months of 1996.  The  Company  believes  that it will  continue to decrease as a
percentage of total revenues, though still a viable product.

     Moderate growth of  approximately  21.2% continued in the criminal  history
product line representing  approximately  49.7% of net revenues in the first six
month period of 1997 as compared to  approximately  51.6% of net revenues in the
first six month period of 1996.  Criminal history reports continues to represent
the most net revenues,  representing $2,265,500 in the first six month period of
1997 as compared to $1,868,700 in the first six month period of 1996.


                                       9
<PAGE>

     The strongest growth occurred in the area of previous employment and credit
reports representing an approximate 31.2% growth from the six month period ended
June 30 1996 to the  six  month  period  ended  June  30  1997.  These  products
accounted for  approximately  11.5% of net revenues in the six months ended June
30, 1997 as compared to  approximately  11.0% of net revenues in the same period
in 1996.

     Other  products  experienced  an  approximate  12.7%  decline in  revenues,
consisting  primarily of a reduction in sales from employee  application  forms,
though only representing  approximately  4.9% of total net revenues in the first
six month period of 1997 as compared to approximately 7.1% of total net revenues
in the same period of 1996.

     Income before income taxes  increased from $744,800 in the six month period
ended June 30, 1996 to $875,600 in the six month  period  ended June 30, 1997 or
approximately  17.6% and represented  approximately 19.2% of net revenues in the
first six months of 1997 compared to approximately 20.6% in the first six months
of 1996.

     Total  expenses  increased  from  $2,875,300 for the six month period ended
June 30, 1996 to $3,678,800  for the  comparable  period in 1997. A breakdown in
expenses is as follows:

<TABLE>
<CAPTION>
                                                      Six Months Ended                 Six Months Ended         Increase (Decrease)
                                                       June 30, 1997                     June 30, 1996            % of Revenues
                                                 -------------------------         -------------------------    ------------------
                                                 Expense       % of Revenue        Expense       % of Revenue     1996 over 1995
                                                 -------       ------------        -------       ------------   ------------------

<S>                                            <C>                  <C>         <C>                  <C>              <C> 
Search and product ...................         $1,946,000           42.7%       $1,492,400           41.2%             1.5%
Marketing ............................            736,400           16.2           610,100           16.9             (0.7)
General and administration ...........            618,800           13.6           515,400           14.2             (0.6)
Software development .................            199,800            4.4           176,900            4.9             (0.5)
Depreciation and amortization ........            177,800            3.9            80,500            2.2              1.7
                                               ----------         ------        ----------         ------            -----


         Expenses ....................         $3,678,800           80.8%       $2,875,300           79.4%             1.4%
                                               ==========         =======       ==========         =======           ======
</TABLE>


     Total  expenses  remained  relatively  stable as a percentage  of total net
revenues  in the  first six month  period of 1997 as  compared  to the first six
month  period  of 1996.  There  were some  reclassifications  from  general  and
administrative  categories  to the other  various  departments  in areas such as
telephone, office supplies, and postage. Explanations of other variances follow.

     Search  and  product  costs  increased  slightly  resulting  from the large
proportion of criminal  history  reports in Avert's product mix. The decrease in
Marketing  expenses  in the six month  period  ended June 30,  1997 over the six
month  period  ended June 30, 1996  resulted  primarily  from a decrease in lead
generation  costs and trade show  expenses.  The slight  decrease in general and
administrative  expenses  in the first six month  period  ended June 30, 1997 as
compared to the same period in 1996  resulted  from a reduction  in  underwriter
consulting  expenses.  Due to the  development  of new software  used in revenue
generation activities and increased computer hardware costs associated with this
software,  depreciation and amortization  expenses have increased  approximately
1.7% of total net revenues  from the six month period ended June 30, 1996 to the
six month period ended June 30, 1997. Phase I of the software began depreciating
in the second quarter 1997 and with Phase II software  depreciation  expected to
begin in fourth quarter 1997.

     Income taxes varied  slightly for the combined  federal and state statutory
rate of approximately  38% in the first six months of 1996 and approximately 39%
in the first six months of 1997.  This  resulted in an increase of net income of
$461,500 or $.13 per share on 3,427,800 shares for the six months ended June 30,
1996,  to net income of $532,300 or $.15 per share on  3,466,300  shares for the
six months ended June 30, 1997.



                                       10

<PAGE>


Liquidity and Capital Resources

     The Company's  financial  position at June 30 , 1997  remained  strong with
working  capital at that date of  $6,506,400  compared to $6,174,900 at December
31,1996.  Cash and cash  equivalents and marketable  securities at June 30, 1997
were  $5,720,700  and increased  from  $5,576,700 at December 31, 1996. Net cash
provided  from  operations  for the six month  period  ended  June 30,  1997 was
$711,900  and  consisted  primarily of net income of $532,300  plus  $177,800 in
depreciation,  a $115,600 increase in accounts  payable,  a $371,000 increase in
accounts  receivable,  and a $346,200 increase in accrued expenses.  The Company
had capital  expenditures  of $909,400  for the six month  period ended June 30,
1997 as  compared  to  $720,100  for the six  months  ended June 30,  1996.  The
majority of the capital  expenditures  during the six months ended June 30, 1997
was  attributable  to the  development  of new  software and upgrade of existing
software  and  hardware.  The  Company  expects  to spend up to $1.5  million in
connection  with  this  project.  The  majority  of  these  are  costs  paid  to
independent consultants. The Company expects the new software and upgrade of its
existing  software to allow the Company to: (1) manage its higher  volume with a
lower cost per  transaction;  (2)  introduce new products and services at a much
quicker  pace;  (3) directly  integrate  the  Company's  information  technology
systems  with  strategic  partners,  suppliers,  and  large  customers;  and (4)
maintain the Company's  competitive  position and provide leading edge, but safe
and  proven,  technology  for its  customers.  Development  and  upgrade  of the
software  will be financed by  available  cash  derived  from past or  continued
operations.  Development and upgrading of the software  presently is expected to
be complete in late 1997 with scheduled  software  releases  occurring  prior to
that time. In addition,  April 30, 1997, there was $530,800  attributable to the
exercise of warrants, which represented 88,125 shares of common stock.





                                       11

<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.   Legal Proceedings

               NONE

ITEM 4.   Submission of Matters to a Vote of Security Holders

     On June 11, 1997, the Company held an annual meeting of  stockholders.  The
following  table sets forth  certain  information  relating to each matter voted
upon at the meeting.
<TABLE>
<CAPTION>
                                                                              Votes
                                                  ------------------------------------------------------------------
                                                                                     Withheld/              Broker
Matters Voted Upon                                   For              Against        Abstain               Non-Votes
------------------                                   ---              -------        ---------             ---------
Election of Directors:

<S>                                                <C>               <C>             <C>                   <C>
         Dean A. Suposs                            2,877,119                          29,603
         D. Michael Vaughan                        2,877,319                          29,403
         Stephen C. Fienhold                       2,877,319                          29,403
         Stephen D. Joyce                          2,876,319                          30,403

Ratification of the selection of
Hein + Associates LLP as independent               2,829,027            48,640        13,055
Auditors for 1997

Amendment to the Avert, Inc. 1994 Stock
Incentive Plan to increase the number of
Shares of the Company's Common Stock               2,525,360           271,166        74,996
To 525,000 shares

</TABLE>

ITEM 6.   Exhibits and Reports on Form 8-K

               (a)  NONE

               (b)  Reports on Form 8-K

                    The  registrant  filed  the  following  reports  on Form 8-K
               during the first quarter ended June 30, 1997:

               (i)  Form 8-K dated April 14, 1997, announcing fourth quarter and
                    year end 1996 results
               (ii) Form 8-K dated April 14,  1997,  announcing  termination  of
                    agreement with Ameritech
               (iii)Form 8-K  dated  April 14,  1997,  announcing  adherence  to
                    warrant expiration date
               (iv) Form 8-K dated May 14 1997, announcing  first  quarter  1997
                    results
               (v)  Form 8-K dated June 19,  1997, announcing  results of annual
                    meeting


                                       12

<PAGE>

                                   SIGNATURES



In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      AVERT, INC.


DATE:  August 8, 1997                 BY:/s/ Dean A. Suposs
                                         ---------------------------------------
                                         Dean A. Suposs, President



DATE:  August 8, 1997                 BY:/s/ Jamie M. Burgat
                                         ---------------------------------------
                                          Jamie M. Burgat, Vice President of
                                          Operations and Chief Financial Officer


                                       13