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 March 31, 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 May 12, 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 March 31, 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, 4, 5 and 6    Not applicable................


         Signatures..............................................  11










                                       2
<PAGE>

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

                                     ASSETS

                                                                                          MARCH 31,     DECEMBER 31,
                                                                                            1997           1996
                                                                                         ---------      -----------
                                                                                        (unaudited)
<S>                                                                                   <C>             <C>        
Current assets:
         Cash and cash equivalents .................................................  $    (75,200)   $   360,300
         Marketable securities .....................................................     5,651,800      5,576,700
         Accounts receivable, net of allowance .....................................       986,200        787,900
         Prepaid expenses and other ................................................       326,800        159,000
                                                                                       -----------    -----------
                  Total current assets .............................................   $ 6,889,600      6,883,900


Property and equipment, net ........................................................     2,884,100      2,510,900

Other assets .......................................................................             0              0
                                                                                       -----------    -----------
Total assets .......................................................................   $ 9,773,700    $ 9,394,800
                                                                                       ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
         Accounts payable ..........................................................   $   509,100    $   464,400

         Accrued expenses ..........................................................       274,800        224,600

         Deferred revenue ..........................................................        24,600         20,000
                                                                                       -----------    -----------
                  Total current liabilities ........................................       808,500        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; 3,446,988 shares issued
           and outstanding .........................................................     4,991,400      4,960,600
         Treasury Stock ............................................................      (215,100)      (215,100)
         Retained earnings .........................................................     4,188,900      3,940,300
                                                                                       -----------    -----------
                  Total shareholders' equity .......................................     8,965,200      8,685,800
                                                                                       -----------    -----------

Total liabilities and shareholders' equity .........................................   $ 9,773,700    $ 9,394,800
                                                                                       ===========    ===========
</TABLE>

               See accompanying notes to the financial statements.


                                       3
<PAGE>

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

                                                                Three Months Ended
                                                                    March 31,
                                                            -------------------------
                                                               1997           1996
                                                               ----           ----
<S>                                                        <C>            <C>        
Net revenues:
         Search and product fees .......................   $ 1,992,900    $ 1,550,400
         Interest and other income .....................       103,000        101,900
                                                           -----------    -----------
                                                             2,095,900      1,652,300
Expenses:
         Search and product costs ......................       895,100        705,000
         Marketing .....................................       331,200        272,000
         General and administrative ....................       329,400        243,600
         Software development ..........................       103,100         91,100
         Depreciation and amortization..................        28,600         32,800
                                                           -----------    -----------
                                                             1,687,400      1,344,500
                                                           -----------    -----------
Income before income taxes .............................       408,500        307,800

         Income tax expense ............................      (159,800)      (116,800)
                                                           -----------    -----------
Net income .............................................   $   248,700    $   191,000
                                                           ===========    ===========
Net income per common share ............................   $       .07    $       .06
                                                           ===========    ===========
Weighted average common
         shares outstanding ............................     3,417,855      3,437,107
                                                           ===========    ===========
</TABLE>



               See accompanying notes to the financial statements.


                                       4
<PAGE>

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

                                                                   THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                  -------------------
                                                                  1997           1996
                                                                  ----           ----

<S>                                                             <C>          <C>      
Cash Flows From Operating Activities:
    Net income ..............................................   $ 248,700    $ 191,000
    Adjustments to reconcile net income to net cash
      provided by operating activities:
         Depreciation and amortization ......................      64,600       32,800
         Bad debt expense ...................................       3,100        7,500
         Increase/(decrease) in marketable securities and
                  other gains ...............................     (75,100)     419,600
         Changes in operating assets and liabilities:
              Accounts receivable ...........................    (201,500)    (157,700)
              Prepaid expenses and other current assets .....     (70,100)         300
              Other assets ..................................        --           --
              Accounts payable ..............................      44,600      (12,600)
              Accrued expenses ..............................     (47,500)     (48,200)
              Income taxes payable ..........................        --         41,700
              Deferred revenue and deposits .................       4,600       (5,700)
                                                                ---------    ---------
         Net cash provided by operating activities ..........     (28,600)     468,700
                                                                ---------    ---------
Cash Flows from Investing Activities:
     Additions to furniture and equipment ...................    (437,700)    (390,800)
     Proceeds from sale of furniture and equipment ..........        --            500
                                                                ---------    ---------
           Net cash provided by investing activities ........    (437,700)    (390,300)
                                                                ---------    ---------
Cash Flows from Financing Activities:
           Purchase of Treasury Stock .......................        --        (76,400)
           Warrants exercised ...............................      30,800         --
                                                                ---------    ---------
           Net cash provided by financing activities ........      30,800      (76,400)

Increase/(Decrease) in Cash and Cash Equivalents ............    (435,500)       2,000

Cash and Cash Equivalents, beginning of period ..............     360,300      159,700
                                                                ---------    ---------
Cash and Cash Equivalents, end of period ....................   $ (75,200)   $ 161,700
                                                                =========    =========
</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 March 31, 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)  for a nine  month  period
originally stated as March 22, 1995 and ending December 22, 1995. On October 11,
1995,  the  Company  announced  that  it  extended  the  expiration  date of its
Redeemable  Warrants  from December 22, 1995 to April 30, 1996.  The  expiration
date was further  extended to April 30,  1997,  as  announced  on Form 8-K dated
March 6, 1996.  All of the other  terms of the  Redeemable  Warrants  remain the
same.  The  Redeemable  Warrants are  redeemable  by the Company at a redemption
price of $0.05 per Redeemable  Warrant at any time commencing March 22, 1995, on
at least 30 days prior  written  notice,  provided that the closing price of the
Common  Stock equals or exceeds  $7.50 per share for a period of 15  consecutive
trading  days  ending  within 15 days  prior to the  notice of  redemption.  Net
proceeds from the IPO totalled  approximately  $4,382,300.  As of March 31, 1997
$30,800 had been received in connection  with the exercising of warrants.  As of
April  30,  1997,  88,125  shares  had been  purchased  totalling  approximately
$572,800, not including offering costs.




                                       6
<PAGE>

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


Results of Operations

Comparison of quarters ended March 31, 1997 and March 31, 1996

         Total net revenues increased from $1,652,300 for the three month period
ended March 31, 1997 to $2,095,900 for the comparable three month period in 1996
or  approximately  26.8%.  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          Percent
                                                    March 31, 1997           March 31, 1996              of
                                                 --------------------     ----------------------      Increase
                                                 Revenues     % total     Revenues       % total     (Decrease)
                                                 --------     -------     --------       -------     ----------
Products:
<S>                                            <C>            <C>       <C>               <C>          <C>  
  Workers compensation histories ............  $  296,600       14.2%   $  283,700        17.2%        1.05%
  Criminal history reports .................   $1,012,200       48.3%   $  841,400        50.9%        20.3%
  Previous employment reports/ .............   $  229,600       11.0%   $  176,000        10.7%        30.5%
     credit reports
  Motor vehicle driving records ............   $  261,500       12.5%   $  217,800        13.2%        20.1%
  Other products ...........................   $  130,900        6.2%   $  106,100         6.4%        23.4%
Services: ..................................   $   89,100        4.3%   $        0         0.0%       100.0%

Interest income ............................   $   77,200        3.7%   $   82,900         5.0%        (6.9)%
                                                ---------                ---------                       
         NET REVENUES ......................   $2,095,900               $1,652,300                     26.8%

</TABLE>

     Moderate  to  strong  growth  in  sales  of all of the  Company's  products
continued  during  the first  quarter  of 1997.  Growth of  approximately  20.3%
occurred in the  criminal  history  reports  area.  In total  dollars,  criminal
history reports  contributed the most net revenues,  representing  $1,012,200 in
net revenues in the period ended March 31, 1997,  as compared to $841,400 in the
period ended March 31, 1996. The criminal history reports product line accounted
for  approximately  48.3% of total net revenues in the first quarter  1997,  and
approximately 50.9% of total net revenues in the first quarter 1996. The Company
believes  there  continues  to  be  a  trend  nationwide  to  check  prospective
employees' criminal records and it continues to focus on obtaining the quickest,
most accurate data available.

     Workers'  compensation  histories,  represented  $296,600  in the period in
1997, or approximately 14.2% of total net revenues,  as compared to $283,700 for
the first three months of 1996,  or  approximately  17.2% of total net revenues.
While this product actually decreased as a percentage of total net revenues,  it
still  represents  the second  largest  product line in terms of  revenues.  The
Company believes that as it enters new markets,  workers' compensation histories
will  continue  to be a viable  product,  but will  continue  to  decrease  as a
percentage of total net revenues.

     The  largest   product  growth  of  30.5%  was  in  the  area  of  Previous
Employment/Credit.  This product represented $229,600 and approximately 11.0% of
total net revenues in the first quarter 1997,  compared to $176,000 in the first
quarter  1996 and  approximately  10.7%  of  total  net  revenues.  The  Company
continues to customize  the Previous  Employment  product line,  increasing  its
attractiveness to its customer base.

                                       7
<PAGE>

     Net  revenues  generated  in the  area of  motor  vehicle  driving  records
increased  from  approximately  $261,500  in  first  three  months  of  1997  to
approximately  $217,800  in the  first  three  months of 1996,  representing  an
increase of approximately 20.1%.

     There  was  23.4%   growth  for   revenues   generated   in  the  areas  of
education/credential  verification,  employment  applications  and first  check,
which increased from $106,100 in first quarter 1996 to $130,900 in first quarter
1997.

     Service sales, which have been added in the chart above,  increased from $0
in first  quarter  1996 to  $89,100 in first  quarter  1997.  This is  primarily
attributable to the implementation of the Avert Advantage program in July, 1996,
which  accounted for $33,100 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 $56,000 in first quarter 1997.

     Income before income taxes increased from $307,800 in first quarter 1996 to
$408,500  in  first  quarter  1997,  or  approximately   32.7%  and  represented
approximately  19.5% of total net  revenues in 1997  compared  to  approximately
18.6% in 1996, resulting from decreases in several expense categories.

     Total expenses  increased from  $1,344,500 for the three month period ended
March 31, 1996 to $1,687,400 for the comparable  period in 1997 or approximately
25.5% A breakdown in expenses is as follows:

<TABLE>
<CAPTION>

                                           Three Months Ended        Three Months Ended     
                                              March 31, 1997            March 31, 1996      Increase (Decrease)
                                        -----------------------    -----------------------     % of Revenues
                                        Expenses   % of Revenue    Expenses   % of Revenue    1997 over 1996
                                        --------   ------------    --------   ------------    --------------

<S>                                    <C>            <C>       <C>             <C>              <C> 
Search and product .................   $  895,100     42.7%     $  705,000      42.7%            0.0%
Marketing ..........................      331,200     15.8         272,000      16.5            (0.7)
General and administration .........      329,400     15.7         243,600      14.7             1.0
Software development ...............      103,100      4.9          91,100       5.5            (0.6)
Depreciation and amortization ......       28,600      1.4          32,800       2.0            (0.6)
                                        ---------    -----    ------------      ----            ----
        Expenses ...................   $1,687,400     80.5%     $1,344,500      81.4%           (0.9)%
                                        =========    =====    ============      ====            ====
</TABLE>

     Search and product fees remained  stable at 42.7% of total net revenues for
both three month  periods in 1997 and 1996.  There is a continued  focus for the
development  of existing  couriers  and  addition of new  couriers  and improved
methods of retrieval of criminal  records,  with that product line  representing
the bulk of this expense category.

     There were  decreases  in the expense  categories  of  marketing,  software
development and depreciation and amortization  when expressed as a percentage of
total net revenues.  There is an 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.  Specifically,  the lead  generation  costs as a
percentage  of total net revenues in the first  quarter  1997 as compared to the
first quarter 1996 represent the decrease in the marketing expense category. The
decrease in software  development expenses as a percentage of total net revenues
in the three  month  period  ended March 31, 1997 as compared to the three month


                                       8
<PAGE>

period  ended  March 31,  1996,  resulted  from the  capitalization  of expenses
related to the development of new software and upgrade of existing software. See
"Liquidity and Capital Resources" below in this Item for further discussion. The
depreciation and  amortization  expenses have decreased as a percentage of total
net revenues due to the fact that  substantial  purchases  were required both in
the areas of computer  hardware and  furniture  and equipment for the new office
facility placed in service in first quarter 1996.

     Income taxes varied  slightly for the combined  federal and state statutory
rate of approximately 38% in the first quarter 1996 and approximately 39% in the
first  quarter  1997,  resulting  in net income of $191,000 or $.06 per share on
3,437,107 shares for the first three months ended March 31, 1996, as compared to
net income of $248,700 or $.07 per share on 3,417,855 shares for the first three
months ended March 31, 1997.

Liquidity and Capital Resources

     The Company's  financial  position at March 31, 1997  remained  strong with
working  capital at that date of  $6,081,100  compared to $6,174,900 at December
31, 1996. Cash and cash equivalents and marketable  securities at March 31, 1997
were  $5,651,800  and increased  from  $5,576,700 at December 31, 1996. Net cash
provided  from  operations  for the three month  period ended March 31, 1997 was
$28,600  and  consisted  primarily  of net  income  of  $248,700  plus a $44,600
increase in accounts payable, a $201,500 increase in accounts receivable,  and a
$70,100 increase in prepaid  expenses and other current assets.  The Company had
capital expenditures of $437,700 for the three month period ended March 31, 1997
as compared to $390,800 for the three months ended March 31, 1996.  The majority
of the capital  expenditures  during the three  months  ended March 31, 1997 was
attributable  to the  development  of  new  software  and  upgrade  of  existing
software.  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 or
early 1998, with scheduled software releases occurring prior to that time.





                                       9

<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1.        Legal Proceedings

               NONE


ITEM 6.        Exhibits and Reports on Form 8-K

               (a)     NONE

               (b)     NONE






                                       10
<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:   May 14, 1997               BY: /s/ Dean A. Suposs
                                       ----------------------------------
                                       Dean A. Suposs, President



DATE:   May 14, 1997               BY: /s/ Jamie M. Burgat
                                       ---------------------------------
                                       Jamie M. Burgat, Vice President of
                                       Operations and Chief Financial Officer





                                       11