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, 1998

                                       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 12, 1998 the issuer had 3,449,525  shares of Common  Stock,  no par
value, outstanding.

                 Transitional Small Business Disclosure Format.
                                [ ] Yes [ X ] No




<PAGE>


Form 10-QSB
Quarter Ended June 30, 1998


                                      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...........................................................   12










                                       2

<PAGE>

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

                                     ASSETS

                                                                                          JUNE 30,    DECEMBER 31,
                                                                                            1998         1997
                                                                                         ---------    -----------
                                                                                        (unaudited)
<S>                                                                                    <C>           <C>        
Current assets:
         Cash and cash equivalents .................................................   $    17,700   $   580,000
         Marketable securities .....................................................     6,275,300     6,113,000
         Accounts receivable, net of allowance .....................................     1,405,100     1,135,000
         Prepaid expenses and other ................................................       291,500       304,000
                                                                                       -----------   -----------
                  Total current assets .............................................   $ 7,989,600     8,132,000


Property and equipment, net ........................................................     3,457,000     3,399,000

Other assets .......................................................................             0             0
                                                                                       -----------   -----------

Total assets .......................................................................   $11,446,600   $11,531,000
                                                                                       ===========   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
         Accounts payable ..........................................................   $   520,000   $   388,000
         Accrued expenses ..........................................................       108,200       201,000
         Deferred revenue ..........................................................        52,000             0
                                                                                       -----------   -----------
                  Total current liabilities ........................................       680,200       589,000

         Deferred Taxes ............................................................       507,000       507,000
                                                                                       -----------   -----------
                  Total liabilities ................................................   $ 1,187,200   $ 1,096,000

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 .........................................................     5,104,800     5,276,000
         Retained earnings .........................................................     5,154,600     5,159,000
                                                                                       -----------   -----------
                  Total shareholders' equity .......................................   $10,259,400   $10,435,000
                                                                                       -----------   -----------

Total liabilities and shareholders' equity .........................................   $11,446,600   $11,531,000
                                                                                       ===========   ===========
</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,
                                                                    ------------------------              -----------------------
                                                                    1998                1997              1998               1997
                                                                    ----                ----              ----               ----

<S>                                                            <C>                <C>                <C>                <C>        
Net revenues:
         Search and product fees .......................       $ 2,475,700        $ 2,343,400        $ 4,622,200        $ 4,361,800
         Interest and other income .....................            81,500            115,000            167,700            192,600
                                                               -----------        -----------        -----------        -----------
                                                                 2,557,200          2,458,400        $ 4,789,900        $ 4,554,400
Expenses:
         Search and product costs ......................         1,174,900          1,051,000          2,216,900          1,946,000
         Marketing .....................................           360,100            405,200            739,200            736,400
         General and administrative ....................           399,900            325,300            751,700            618,800
         Software development ..........................           177,400             96,600            250,900            199,800
         Depreciation and amortization .................           149,900            113,200            261,200            177,800
                                                               -----------        -----------        -----------        -----------
                                                                 2,262,200          1,991,300        $ 4,219,900        $ 3,678,800
                                                               -----------        -----------        -----------        -----------

Income before income taxes .............................           295,000            467,100            570,000            875,600
         Income tax expense ............................          (116,100)          (183,500)          (224,200)          (343,300)
                                                               -----------        -----------        -----------        -----------

Net income .............................................       $   178,900        $   283,600        $   345,800        $   532,300
                                                               ===========        ===========        ===========        ===========
Net income per common share ............................       $       .05        $       .08        $       .10        $       .15
                                                               ===========        ===========        ===========        ===========
Weighted average common
         shares outstanding ............................         3,522,800          3,493,500          3,529,400        $ 3,455,300
                                                               ===========        ===========        ===========        ===========
</TABLE>




              See accompanying notes to the financial statements.






                                        4


<PAGE>

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

                                                                      SIX MONTHS ENDED JUNE 30
                                                                      ------------------------
                                                                         1998         1997
                                                                         ----         ----

<S>                                                                   <C>          <C>      
Cash Flows From Operating Activities:
    Net income ....................................................   $ 345,800    $ 532,300
    Adjustments to reconcile net income to net cash
      provided by operating activities:
         Depreciation and amortization ............................     261,200      177,800
         Bad debt expense .........................................      13,100        8,100
         Increase/(decrease) in marketable securities and
                  other gains .....................................    (162,300)    (144,000)
         Changes in operating assets and liabilities:
              Accounts receivable .................................    (283,200)    (371,000)
              Prepaid expenses and other current assets ...........      12,500      (17,300)
              Accounts payable ....................................     180,100      115,600
              Accrued expenses ....................................     (52,800)     346,200
              Income taxes payable ................................     (40,000)     (30,400)
              Deferred revenue and deposits .......................       3,100       94,600
                                                                      ---------    ---------
         Net cash provided by operating activities ................   $ 277,500      711,900

Cash Flows from Investing Activities:
     Additions to furniture and equipment .........................    (319,200)    (909,400)
     Proceeds from sale of furniture and equipment ................        --           --
                                                                      ---------    ---------
           Net cash provided by investing activities ..............    (319,200)    (909,400)

Cash Flows from Financing Activities:
         Purchase of Treasury Stock ...............................    (171,200)        --
         Warrants exercised .......................................        --        530,800
         Dividends declared .......................................    (349,400)        --
                                                                      ---------    ---------
           Net cash provided by financing activities ..............    (520,600)     530,800

Increase/(Decrease) in Cash and Cash Equivalents ..................     562,300     (333,300)

Cash and Cash Equivalents, beginning of period ....................     580,000      360,300
                                                                      ---------    ---------

Cash and Cash Equivalents, end of period ..........................   $  17,700    $ 693,600
                                                                      =========    =========
</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, 1997.

     The results for interim periods are not  necessarily  indicative of results
to be expected for the fiscal year of the Company ending  December 31, 1998. 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, 1998 and 1997 covered thereby.

    "The Company" or "Avert" is used in this report to refer to Avert,  Inc. The
Company may from time to time make written or oral  forward-looking  statements,
including  statements contained in the Company's filings with the Securities and
Exchange  Commission and its reports to shareholders.  This document may contain
forward-looking   statements  that  are  made  pursuant  to  the  "safe  harbor"
provisions  of the  Private  Securities  Litigation  Reform  Act of 1995.  These
statements include,  without  limitation,  statements relating to Avert's growth
and business  strategies,  regulatory  matters affecting Avert,  other plans and
objectives of Avert, management for future operations and activities,  expansion
and growth of Avert's  operations and other such matters.  The words "believes,"
"expects,"  "intends,"  "strategy,"  "considers"  or  "anticipates"  and similar
expressions identify forward-looking  statements. The Company does not undertake
to update, revise or correct any of the forward-looking information.

     Impact of recently  issued  accounting  standards.  Statement  of Financial
Accounting  Standards  128,  "Earnings  per Share" and  Statement  of  Financial
Accounting  Standards 129 "Disclosure of Information  About an Entity's  Capital
Structure".  Statement 128 provides a different  method of calculating  earnings
per share than is currently used in accordance with Accounting  Principles Board
Opinion 15 "Earnings per Share".  Statement 128 provides for the  calculation of
"basic" and "diluted"  earnings per share.  Basic earnings per share includes no
dilution and is computed by dividing income available to common  shareholders by
the weighted average number of common shares outstanding for the period. Diluted
earnings per share reflect the potential dilution of securities that could share
in the  earnings  of an entity,  similar to fully  diluted  earnings  per share.
Statement 129 establishes standards for disclosing information about an entity's
capital structure. Statements 128 and 129 are effective for financial statements
issued for periods ending after December 15, 1997. Their  implementation  is not
expected to have a material effect on the financial statements.

     Statement of Financial Accounting  Standards 130. "Reporting  Comprehensive
Income" and Statement of Financial  Accounting  Standards 131 "Disclosures About
Segments of an Enterprise and Related  Information".  Statement 130  establishes
standards for reporting and display of comprehensive  income, its components and
accumulated balances.  Comprehensive income is defined to include all changes in
equity except those resulting from  investments by owners and  distributions  to
owners. Among other disclosures,  Statement 130 requires that all items that are
required to be recognized  under current  accounting  standards as components of
comprehensive income be reported in a financial statement that displays with the
same  prominence  as  other  financial  statements.   Statement  131  supersedes
Statement of Financial Accounting Standards 14 "Financial Reporting for Segments
of a Business  Enterprise".  Statement 131 establishes standards on the way that
public companies report financial information about operating segments in annual
financial  statements  and  requires  reporting  of selected  information  about
operating segments in interim financial statements issued to the public. It also
establishes   standards  for  disclosures   regarding   products  and  services,
geographic areas and major customers.  Statement 131 defines operating  segments
as  components  of a company  about  which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate resources and in assessing performance.

     Statements  130 and 131 are effective for financial  statements for periods
beginning  after  December  15, 1997 and  require  comparative  information  for
earlier years to be restated. Because of the recent issuance of these standards,
management has been unable to fully  evaluate the impact,  if any, the standards
may have on the future financial  statement  disclosures.  Results of operations
and financial position,  however,  will be unaffected by implementation of these
standards.


                                       6

<PAGE>


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


Results of Operations

Comparison of quarters ended June 30, 1998 and June 30, 1997

     Total net revenues  increased  from  $2,458,400  for the three month period
ended June 30, 1997 to $2,557,200 for the comparable  three month period in 1998
or approximately  4.0%. A key element in second quarter depressed revenue growth
was that Avert's focus continued the shift toward managing conversion activities
and  communicating   features  and  enhancements  of  the  new  computer  system
implemented in April, 1998, as opposed to new product growth and development and
general marketing  efforts.  See "Liquidity and Capital  Resources" in this item
below. 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, 1998             June 30, 1997            Percent of
                                                   ---------------------     ---------------------         Increase
                                                     Revenues    % total      Revenues     % total        (Decrease)
                                                     --------    -------      --------     -------        ----------
<S>                                                <C>             <C>      <C>            <C>               <C>  
Products:
  Workers compensation histories ...........       $  251,000      9.8%     $  299,600     12.2%             (16.2)%
  Criminal history reports .................       $1,462,000     57.2%     $1,253,200     51.0%              16.7%
  Previous employment reports/ .............       $  286,000     11.2%     $  293,600     11.9%              (2.6)%
     credit reports
  Motor vehicle driving records ............       $  255,700     10.0%     $  260,900     10.6%              (2.0)%
  Other products ...........................       $   99,300      3.9%     $  118,000      4.8%             (15.8)%
Services: ..................................       $  123,800      4.8%     $  118,800      4.8%               4.2%

Interest income ............................       $   80,800      3.2%     $   77,200      3.1%               4.7%

         NET REVENUES ......................       $2,557,200               $2,458,400                         4.0%

</TABLE>

     The largest  product  growth of  approximately  16.7%  occurred in Criminal
history  reports.  This product  accounts for  approximately  57.2% of total net
revenues  for 2nd quarter 1998 as compared to  approximately  51.0% of total net
revenues for 2nd quarter 1997.

     As predicted,  sales in the Workers'  compensation  histories  product line
continues to decrease and  represents  approximately  $251,000 in revenue in the
three month period ended June 30, 1998 as compared to $299,600 in revenue in the
same three month period of 1997. The Company  believes this decrease is a result
of increased regulation requirements, causing a background check of this type to
be slower than desired for employers' need for quick hiring.

     Service sales experienced  approximately  4.2% revenue growth from $118,800
in second  quarter 1997 to $123,800 in second  quarter  1998.  This is primarily
attributable  to growth of the customer base  membership in the Avert  Advantage
program,  which  increased  from  $37,600 in revenues for the second three month
period in 1997,  to $48,700 in revenues  for the second  three  month  period in
1998. In addition,  membership fees were added for both the partner and reseller
customers  in  second  quarter  1998,  representing  approximately  $18,300,  as
compared to $0 in the second  quarter 1997. Two partner  relationships,  ADP and
Restrak were formed in second  quarter  1998 and are  considered a focus for the
remainder of 1998.

     Growth in the remaining sales  categories  remained flat as a percentage of
total net  revenues in the three month period ended June 30, 1998 as compared to
the same three month period in 1997.

     Income before income taxes  decreased  from $467,100 in second quarter 1997
to $295,000 in second  quarter  1998,  or  approximately  36.8% and  represented
approximately  19.0% of total net  revenues in 1997  compared  to  approximately
11.5% in 1998, resulting from increases in several expense categories as well as
depressed revenue growth.

     Total expenses  increased from  $1,991,300 for the three month period ended
June 30, 1997 to $2,262,200 for the comparable  period in 1998 or  approximately
12.0%. A breakdown in expenses is as follows:

                                       7


<PAGE>

<TABLE>
<CAPTION>

                                                       Three Months Ended               Three Months Ended      Increase (Decrease)
                                                         June 30, 1998                     June 30, 1997          % of Revenues
                                                    --------------------------        ------------------------  ------------------
                                                    Expenses      % of Revenue        Expenses    % of Revenue    1998 over 1997
                                                    --------      ------------        --------    ------------    --------------

<S>                                               <C>                  <C>         <C>                  <C>           <C> 
Search and product ...........................    $1,174,900           45.9%       $1,051,000           42.8%         3.1%
Marketing ....................................       360,100           14.1           405,200           16.5         (2.4)
General and administration ...................       399,900           15.6           325,300           13.2          2.4
Software development .........................       177,400            6.9            96,600            3.9          3.0
Depreciation and amortization ................       149,900            5.9           113,200            4.6          1.3
                                                  ----------           ----        ----------           ----          ---

         Expenses ............................    $2,262,200           88.4%       $1,991,300           81.0%         7.4%
                                                  ==========           ====        ==========           ====          ===
</TABLE>

     Search and product fees increased approximately 3.1% as a percentage of net
revenues in the second  quarter 1998 over the second  quarter 1997. The majority
of the  increase  was  attributable  to the  increasing  costs  from  sources of
obtaining criminal history information,  as well as the criminal history product
as the one most  susceptible to market pricing  pressures.  Another main area of
increased  expenses in this category  resulted from  increased  personnel  costs
associated  with  staffing an expanded  customer  service  department to improve
customer  coverage,  and increased  temporary  staffing for the labor  intensive
products such as reference checks and education verifications.  Additional labor
costs,  associated with the computer conversion,  were approximately $16,600 for
the second  quarter  1998. In addition,  there was a small  increase in computer
telephone  costs  associated  with a greater  percentage of customers  moving to
remote order  placement  and  retrieval.  There was a decrease in expenses  when
expressed  as a percentage  of total net revenues in the areas of motor  vehicle
records, workers' compensation reports, and name link reports.

     There  was  an  approximate  2.4%  decrease  in  marketing  expenses  as  a
percentage of total net revenues, in the second three months of 1998 as compared
to the  second  three  months of 1997.  Though  there is an  on-going  marketing
campaign designed to target lead generation,  marketing communication and market
development for both current customers and new customers,  as stated previously,
the focus for all Avert  personnel  in  second  quarter  1998 was to manage  the
computer  conversion and its impact on Avert  customers.  There were no outgoing
marketing  activities due to the  implementation of the new computer system, its
features and benefits.  See "Liquidity and Capital Resources" below in this item
for further  discussion.  Marketing personnel costs decreased as a percentage of
total net revenues from  approximately 7.3% in second quarter 1998 from 10.8% in
second quarter 1997.

     General and Administrative  expenses increased approximately $74,600 in the
second three month period ended June 30, 1998, representing  approximately 15.6%
of total net  revenues,  as compared to the second three month period ended June
30, 1997 quarter 1997,  representing  13.2% of total net revenues.  The increase
was primarily  due to several main areas.  Firstly,  an  additional  $12,000 per
quarter  is  being  accrued  for  potential  uncollectible  accounts  due  to  a
substantial  reseller  write-off  in accounts  receivable.  Secondly,  Avert has
increased  personnel  and their  associated  costs in the area of  compliance to
better staff the Help Desk resulting from the increased  membership in the Avert
Advantage programs.  Lastly,  there are additional costs of approximately $5,200
associated with errors and omission insurance, obtained during the first quarter
of 1998 that was not in effect in second quarter 1997.

     The increase of approximately  3.0% in software  development  expenses as a
percentage  of total net  revenues in the three month period ended June 30, 1998
as compared to the three  month  period  ended  June,  1997,  resulted  from the
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.   Increased   staff  and  consultants  to  complete  the  conversion
represented an approximate  $61,000 increase in associated  expenses from second
quarter  1998 over  second  quarter  1997.  In  addition,  additional  education
expenses were  incurred in the three months ended June 30 1998 over 1997.  These
additional  costs  associated with  enhancements  will continue  through 1998 as
well.


                                       8

<PAGE>

     The depreciation and amortization  expenses have increased by approximately
1.3% of total net  revenues in the three month period in 1998 as compared to the
same period in 1997 due to the fact that the software  previously  developed had
been put into actual use fully on April 1, 1998.  Capitalization occurred in the
software  development   activities  as  well  as  additional  computer  hardware
purchases required for the computer conversion.

     Income taxes remained  stable for the combined  federal and state statutory
rate at approximately  39% for both second quarter 1998 and second quarter 1997,
resulting  in net income of $283,600 or $.08 per share on  3,493,484  shares for
the second  three  months  ended June 30,  1997,  as  compared  to net income of
$178,900 or $.05 per share on 3,522,799 shares for the second three months ended
June 30, 1998.


Comparison of six months ended June 30, 1998 and June 30, 1997

     Net revenues  increased from $4,554,400 for the six month period ended June
30,  1997,  to  $4,789,900  for  the  comparable  six  month  period  in 1998 or
approximately  5.2%.  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, 1998          June 30, 1997          Percent of
                                                     -------------------     -------------------        Increase
                                                     Revenues    % total     Revenues    % total       (Decrease)
                                                     --------    -------     --------    -------       ----------
<S>                                                <C>            <C>       <C>            <C>           <C>    
Products:
  Workers compensation histories ...........       $  492,800     10.3%     $  596,200     13.1%         (17.3)%
  Criminal history reports .................       $2,577,500     53.8%     $2,265,500     49.7%          13.8%
  Previous employment reports/ .............       $  554,300     11.6%     $  523,200     11.5%           6.0%
     credit reports
  Motor vehicle driving records ............       $  507,100     10.6%     $  522,400     11.5%          (2.9)%
  Other products ...........................       $  245,100      5.1%     $  223,600      4.9%          10.0%
Services: ..................................       $  248,900      5.2%     $  233,200      5.1%           6.7%

Interest income ............................       $  164,700      3.4%     $  154,400      3.4%           6.7%


         NET REVENUES ......................       $4,789,900               $4,554,400                     5.2%
</TABLE>

     Moderate  growth in sales of most all of the  Company's  products  occurred
during the first six months of 1998 with the  largest  increase  being  Criminal
history reports. They represented  approximately 53.8% of total net revenues, or
$2,577,500 in the first six months of 1998, as compared to  approximately  49.7%
of total net revenues, or $2,265,500 in the first six months of 1997.

     Workers' compensation reports continued its downward trend, decreasing from
$596,200 in revenues for the six month period ended June 30, 1997 to $492,800 in
revenues  for the six  month  period  ended  June  30,  1998.  . The  regulation
requirements of this product have made it less viable in the marketplace.

     The Services  category  increased as a percentage  of total net revenues by
approximately  6.7% when comparing  first six months of 1998 to first six months
of 1997. The increase  resulted  primarily  from  increased  membership in Avert
Advantage  programs,  along with the  implementation of the partner and reseller
equivalent programs.  Partner relationships will continue to be a focus of Avert
through the end of 1998.



                                       9

<PAGE>

     The category of "Other  Products"  experienced an increase of approximately
10% of total net  revenues  in the  first  six  months  ended  June 30,  1998 as
compared to the first six months ended June 30, 1997. This increase was a result
of increased  employment  applications  sales and package sales.  Packages are a
direct result of increased  capabilities  made  possible by the recent  computer
conversion,  allowing customers to set up custom packages, comprised of products
and services to allow ease of order entry.  Avert believes this area will have a
positive impact on future revenues.

         Income  before  income taxes  decreased  from $875,600 in the six month
period  ended June 30, 1997 to $570,000 in the six month  period  ended June 30,
1998 or approximately 34.9% and represented  approximately 11.9% of net revenues
in the first six months of 1998 compared to approximately 19.2% in the first six
months of 1997.

         Total expenses increased from $3,678,800 for the six month period ended
June 30, 1997 to $4,219,900  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, 1998                  June 30, 1997              % of Revenues
                                                 -------------------------       --------------------------    ------------------
                                                 Expense      % of Revenue       Expense       % of Revenue       1998 over 1997
                                                 -------      ------------       --------      ------------       --------------

<S>                                           <C>                  <C>         <C>                  <C>                <C> 
Search and product ..................         $2,216,900           46.3%       $1,946,000           42.7%              3.6%
Marketing ...........................            739,200           15.4           736,400           16.2              (0.8)
General and administration ..........            751,700           15.7           618,800           13.6               2.1
Software development ................            250,900            5.2           199,800            4.4               0.8
Depreciation and amortization .......            261,200            5.5           177,800            3.9               1.6
                                              ----------           ----        ----------           ----               ---

         Expenses ...................         $4,219,900           88.1%       $3,678,800           80.8%              7.3%
                                              ==========           ====        ==========           ====               ===
</TABLE>

     Total expenses  increased  approximately  7.3% as a percentage of total net
revenues  in the  first six month  period of 1998 as  compared  to the first six
month  period  of 1997.  The  primary  increase  was in the area of  Search  and
Products  costs,  which  increased due to an  increasingly  large  proportion of
criminal  history  reports in Avert's  product  mix  resulting  in an  increased
proportion of product costs. In addition,  this product is susceptible to a high
degree of market pricing  pressure,  and there have been increases in data costs
directly from public sources.

     The slight  decrease in  Marketing  expenses in the six month  period ended
June 30, 1998 over the six month period ended June 30, 1997  resulted  primarily
from a decrease in outgoing  marketing  activities due to the in-house  computer
conversion activities.

     There  was an  increase  of  approximately  2.1% of total net  revenues  in
general and administrative expenses in the first six month period ended June 30,
1998 as compared to the same period in 1997,  resulting primarily from increased
accruals  for  uncollectible   accounts,   and  increased  personnel  costs  for
compliance.

     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  1.6% of
total net  revenues  from the six month  period  ended June 30,  1997 to the six
month period ended June 30, 1998. Phase I of the software began  depreciating in
the second  quarter  1997,  and Phase II software  depreciation  began in April,
1998.


                                       10

<PAGE>

     Income taxes varied  slightly for the combined  federal and state statutory
rate of approximately 39% in both of the first six months of 1997 and 1998. This
resulted in a decrease of net income of $532,300 or $.15 per share on  3,455,300
shares for the six months ended June 30, 1997, to net income of $345,800 or $.10
per share on 3,529,400 shares for the six months ended June 30, 1998.


Liquidity and Capital Resources

     The  Company's  financial  position at June 30, 1998  remained  strong with
working  capital at that date of  $7,309,400  compared to $7,543,000 at December
31,1997.  Cash and cash  equivalents and marketable  securities at June 30, 1998
were  $6,293,000  and decreased  from  $6,693,000 at December 31, 1997. Net cash
provided  from  operations  for the six month  period  ended  June 30,  1998 was
$277,500 and consisted primarily of net income of $345,800,  a $283,200 increase
in accounts receivable,  a $180,100 increase in accounts payable, and a $261,200
increase in  depreciation  expenses.  The Company  had capital  expenditures  of
$319,200  for the six month  period  ended June 30, 1998 as compared to $909,400
for the six months ended June 30, 1997. The majority of the capital expenditures
during the six months ended June 30, 1998 were  attributable  to the development
of new  software  and upgrade of existing  hardware  and  software.  The Company
expects  ongoing   enhancements  to  its  computer  system  through  1998.  Such
enhancements  are  believed to be  necessary  in order to foster  cost-effective
partnerships.  Other  enhancements  are  expected  to directly  enhance  Avert's
ability  to  produce a higher  volume of reports  without  incurring  additional
staffing  expenses.  Development and upgrade of the software will be financed by
available cash derived from past or continued operations.  Implementation of the
new software was April, 1998 with ongoing enhancements throughout 1998. Net cash
used in  financing  activities  for the six month period ended June 30, 1998 was
$520,600 and  consisted of $171,200 for stock  repurchased  and $349,400 for the
special dividend declared in first quarter, 1998.


                           PART II - OTHER INFORMATION


ITEM 1.   Legal Proceedings

          NONE


ITEM 6.   Exhibits and Reports on Form 8-K

          (a)     4th Quarter and Year-End Results

          (b)     Errors and Omissions Insurance Coverage

















                                       11


<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 13, 1998                BY: /s/ Dean A. Suposs
                                          --------------------------------------
                                          Dean A. Suposs, President



DATE:   August 13, 1998                BY: /s/ Jamie M. Burgat
                                          --------------------------------------
                                          Jamie M. Burgat, Vice President of
                                          Operations and Chief Financial Officer













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